Dollar Meal Deals Come to the Supermarket Meat Case

Discussion
Jul 29, 2011

Restaurant franchise owners have long claimed that so-called dollar meals are great for driving traffic up and margins down. So, what will the supermarket version of the concept mean for grocery?

Supervalu, according to a report on the Drovers CattleNetwork site, has launched $1 individual-size beef, chicken and pork items under its Shoppers Value private label. The company did not give details on what types of meat cuts could be purchased at the price point.

Neil Stern, a senior partner and analyst with McMillanDoolittle, told Drovers, “It’s a powerful way to translate value to a consumer, which grocery stores have done a historically poor job of. As they compete against restaurants, they can do a better job of communicating a ‘meal’ price.”

Company CEO Craig Herkert said on a recent conference call with analysts, “They’ve done very well for us. Our shoppers are responding to the value-oriented programs and new dollar price points that we have implemented.”

Dollar meats by Supervalu are consistent with the value push the company has followed under Mr. Herkert.

In a call earlier in the year to discuss third quarter results with analysts, he said, “I believe the thrift consciousness we are seeing in food retail is a secular shift, and we are positioning Supervalu to be a long-term partner of choice for communities we serve.”

What do you think of food retailers adopting their own version of dollar meals? Will there be others rushing to emulate what Supervalu is doing?

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14 Comments on "Dollar Meal Deals Come to the Supermarket Meat Case"


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Gene Hoffman
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Gene Hoffman
9 years 9 months ago

Dollar meals are good when a retailers has an ongoing merchandising program that is already producing increased same-store sales. Then the dollar meal further solidifies the value push of such retailers.

When same-store sales are lagging, it might be an attempt to strengthen the hold on existing customers. Retailers are great duplicators and so other retailers will develop dollar meals … but following Supervalu may not be the stimulus.

John Boccuzzi, Jr.
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John Boccuzzi, Jr.
9 years 9 months ago

A concept rarely meets the needs of every retailer so the dollar meal concept is a good one as long as the market the retailer is servicing has a consumer with that need. The dollar menu works for McDonald’s and Burger King, but I am not sure it would work as well at a Starbucks or Morton’s steak house. An example in grocery would be Whole Foods. I am not sure the dollar concept would work well there. The person that shops at Whole Foods is seeking another need beyond value. Adding this to a Whole Foods would most likely confuse the current customer.

All great ideas need to be customized to meet the needs of the shopper you are looking to attract to your store. One size does not fit all.

Liz Crawford
Guest
9 years 9 months ago

I like the creativity and honesty in competing toe-to-toe with restaurant meals. Shoppers do think in comparison terms, and there is only so much share of stomach. Using the same language and proposition will help them gain share. This is good news for shoppers and will be for Supervalu too. I bet we’ll see other grocers follow suit, especially as the price of beef rises over time.

Tony Orlando
Guest
9 years 9 months ago

As a supermarket owner and meat man, it will be very hard to develop a QUALITY $1.00 pkg. of any beef pork or chicken item. Unless it is an enhanced or minced breaded item, it can not be done. How about giving an everyday hot price on key items all season long, and make the consumer feel good, knowing they will get a great deal consistently without shopping around? Maybe a $2 or $3 pkg. might be more realistic, but $1??

I’ll be waiting on this to see what they will do.

Doug Stephens
Guest
Doug Stephens
9 years 9 months ago

I guess my question is: Is this “value” or is it just cheap? Value implies that, regardless of price, the customer feels that what they were charged was appropriate for the satisfaction they received. The fact that a meal is priced at a dollar has little bearing or influence on the over-all value perception of the store.

Bill Bittner
Guest
Bill Bittner
9 years 9 months ago

On one hand, I would like to give Supervalu points for innovation. In this economy, it no doubt takes some out of the box thinking. But I really don’t see the point of this offer. Meat takes time to prepare. Even if you are only shopping for yourself, you are likely to prepare more than one portion at a time. A roast could last a week, same with a turkey. I guess the one area might be steaks, but even there it is easy to freeze a couple for later — which is actually another point: a cooked roast or chicken lasts a lot longer in the refrigerator than would a fresh single portion waiting to be prepared.

I just don’t see the long term prospect for this, although it did generate some buzz.

Cathy Hotka
Guest
9 years 9 months ago

Grocery chains have done a great job of adapting to their customers’ changing needs over the past several years. They know that they may not be selling ingredients but, instead, dinner or lunch. Time-starved commuters and students will love this option.

Ed Rosenbaum
Guest
9 years 9 months ago

I can’t see it happening, folks. I have to agree with Tony. What are you going to get for a dollar? Maybe the “scent” of a meat product?

Bill Emerson
Guest
Bill Emerson
9 years 9 months ago

There’s an old saying about “getting what you pay for.” Given the low margins that grocers operate on, it will be interesting to see what you get for your dollar. Sure, they may give it away below cost, but for how long?

Tina Lahti
Guest
Tina Lahti
9 years 9 months ago

I think that individual portions are a good idea as is a value price, but to me they don’t necessarily go together. In my experience, the value shopper in a grocery store is shopping for a family. Individual portions are likely not, in fact, a value to them. Shoppers looking for small quantity seem to be willing and able to pay for higher quality, especially in key categories like fresh produce and meat. Based on what fills the cart, I would guess that my local Cub (a Supervalu-owned value chain) shopper is feeding a family of 4 or 5, and my local Lund’s shopper (high-end grocery) is feeding a family of 1 or 2.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
9 years 9 months ago
A large part of our community is 55+ and shopping for just one or two-person households which prefer small portions. Dollar meals from supermarkets will be great for them, and hopefully healthier than dollar menu items from drive-throughs. I hope that conventional supermarket chains with stores in our and similar neighborhoods can figure out a way to massage their planagrams to offer dollar meals in at least selected stores serving the appropriate demographics. The risk in this approach is that if the items are not carried in all stores in a chain, satisfactory volume discounts cannot be achieved. A dollar is a fragile retail price, and pennies either way will make it work – or not. But then, dollar meals may work in all stores. Only a test will tell. To Tony O’s point, though, I can’t see how this can be done. The packaging alone will chew up a lot of the cost. And quoting the Drovers article, “Supervalu – says it’s stepped up promotions on cheaper chicken while passing along higher prices for… Read more »
Odonna Mathews
Guest
Odonna Mathews
9 years 9 months ago

A dollar meat item must be awfully small and perhaps not too appealing for families, and the consumer still has to cook it. Wegmans $6 meals with an entree and two sides seems like a better deal to me. It’s really a lot of food and it’s already cooked and ready to heat.

John Crossman
Guest
John Crossman
9 years 9 months ago

The economy is taking a long time to come back. Retailers should seek every opportunity to be price sensitive for a very long time.

Justin Time
Guest
9 years 9 months ago

Dollar Tree has been selling 3-4 oz rib eye steaks for $1 for a while and seems to be very popular with its customers. A&P sold $1 salmon and flounder for a while, but like everything else they do, abandoned it after a short while.

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