Attempts to Trim the Fat Merely Cut at the Meat

There is, however, circularity to this argument. Because Giant didn't sell much, it didn't offer much variety, and what fish it did offer sat there too long. The lack of variety and freshness, in turn, caused sales to fall further.

The same dynamic can work in the opposite direction. Other supermarkets have discovered that if you invest in the fish department by offering fresh product that is well displayed and sold by knowledgeable clerks, you can sell more fish, at higher prices. And once the volume increases, it becomes possible to offer a wider variety, which attracts even more customers.

The late Izzy Cohen, who ran the family-owned chain for decades, understood there were higher margins to be made if you invested in product and service. But ever since Giant was sold to the Dutch retailer Royal Ahold, that wisdom seems to have been lost. A single-minded focus on cost cutting and consolidation led to a noticeable deterioration of service, which eroded not only the loyalty of customers but that of Giant's famously loyal employees. Before long, these trends began to feed on themselves, with falling same-store sales leading to more cost cutting, leading to further declines in service, sales, profits and market share. By the end of last year, things had gotten so bad that several hedge funds with large stakes in Royal Ahold began demanding that Giant be sold.

When I read news of the fish-counter closures, I was about to write off Giant for good. Competitors like Costco, Wal-Mart, Whole Foods and Wegmans are nibbling away at its market share from the bottom, with low prices, and the top, with dazzling stores. Even arch-rival Safeway has found a winning formula that includes soup and olive bars, improved delis and produce sections, organic foods, an improved and expanded line of prepared foods and -- you guessed it -- staffed counters for both meat and fish.

But a visit to a prototype store in Urbana yesterday morning convinced me it may be too early to count Giant out. The produce, deli and prepared food departments are spacious, well stocked and pleasantly displayed. Service is good. While there's not quite the sense of theater that you find at a Whole Foods or a Wegmans -- and no fish counter -- you don't find their prices either.

Belatedly, Giant may have rediscovered how to make money by investing in customer service rather than cutting it. Maybe Izzy can finally rest in peace.

Steven Pearlstein can be reached atpearlsteins@washpost.com.