Pencils Sharpened, Large Grocers Ready to Compete
Price competition is heating up in the grocery channel. The
rationale, RetailWire has
been told, is that while most supermarkets expect to lose some share to Wal-Mart
Stores and other discounters, they want to try and grab as much of the market
away from other grocery chains and independents as possible.
Delhaize, which operates Food Lion, Hannford and Sweetbay, recently
said it was looking for competition to intensify as rivals including Ahold,
Safeway and Supervalu trimmed prices across the store, according to a Dow
Jones Newswire report.
A vice president of a regional grocery chain who asked not to
be identified told RetailWire, “The
real battle is being waged in everyday prices. Consumers know that there
are going to be deals on some hot items every week and they go from one store
to another cherry-picking those deals. Where the battle is going to be won
or lost is how much non-promoted product they will buy. To achieve that,
you need to lower your everyday retails on the national brands and promote
the heck out of your store brands.”
Safeway’s Eastern Division announced yesterday that it was dropping
prices as much as 25 percent on thousands of items in its stores. The chain
will identify the products with lower prices with yellow tags on the shelf.
“In this tough economy, as we gathered
consumer insight, people are telling us they’re looking for more value
in their shopping experience,” Steve Neibergall, Safeway Eastern Division
president, told The Baltimore Sun. “They’re
trying to stretch their dollars further.”
Back in June, price
cuts at Ahold’s Giant Food division were given credit along with store
remodels as being behind the chain achieving its first share gain
in the Baltimore market in six years.
Will price competition increase in the grocery channel in the months/year
ahead? Can supermarkets engage in a lower everyday price initiative while
simultaneously protecting margins?
- Delhaize Sees Price War in U.S. – Dow
Jones Newswires/The Wall Street Journal
- Safeway is latest grocer to reduce prices in stores – The
- Giant Food Builds Market Share – The