Safeway Pushes Flu Shots and Food Savings
Walgreens and other drugstore chains may be looking to become bigger players in grocery. In what appears to be a counter-offensive, Safeway is now offering a discount on groceries for consumers who stop by its pharmacies to get a flu shot.
Earlier this week, the grocery chain announced that consumers who took advantage of walk-up flu shots offered at more than 1,100 of its stores across the country would receive a 10 percent off coupon (excluding NJ) to use for grocery shopping.
"Safeway is removing the barriers to health and wellness by offering flu shots in our Safeway community pharmacies in stores where people are already shopping most often, and where they have easy access to an abundance of nutritious foods and other items to keep their families healthy," said Darren Singer, senior vice president of pharmacy, health and wellness at Safeway, in a press release.
This is not the first time a grocer has linked the sale of one category of products to another. Chains have used gas rewards as an enticement to get consumers to purchase more groceries. In April, for example, Kroger revamped its fuel rewards to give shoppers between 10 cents and $1 a gallon off on gas based on purchases made in the chain’s stores.
Discussion Questions
Discussion Questions: Will Safeway’s offer of discounted groceries help it gain share of the flu shot market? Will it translate into more business for its pharmacies overall? What would be your response if you were a competitor to Safeway?
It can’t hurt Safeway but my guess is that — in the majority of the cases — they are going to “reward” existing customers.
Discounted groceries aren’t enough to get somebody who prefers to go to their doctor for their shots to suddenly run to Safeway and discounting may not be enough to get people to switch pharmacies.
Getting 10% off of prices that are 15% to 20% higher than Walmart? Most consumers figure out they are not getting much of a bargain. Gas gimmicks require you to pay above market prices (assuming Walmart and Target set the bar for average pricing). Perhaps if you are an extreme couponer and take advantage of all the credit card rebates, you might get a deal.
I’m finding flu shots are available free at many places now so why go to a store and pay for one? To me these are all lateral gimmicks to avoid having to lower prices to compete.
Make it easy, offer something the customer wants, and make it something that will save money and you have a winning combination.
The opportunity save 10% might be appealing to some consumers, but it probably won’t change their long-term shopping habits. If the offer gains traction with consumers, expect competitors to follow suit. This is an easy program to replicate.
It definitely gives the customer a reason to come in and get the shot (Ontario provides the shot free of charge and you can only get the shot from a doctor’s office or government run facility). Everyone is looking for a discount these days and 10% off (while not incredibly generous) is better than nothing. I’m wondering how competitive Safeway is on the price of the shot itself. Does the 10% make it worthwhile? Maybe a combination of rewards points and a discount would make it juicer for the customer or at least increase the basket.
What’s going on at Safeway? Several years ago they announced an EDLP policy, then abandoned it almost immediately. Prices are high. They want customers to tear apart pieces of paper to get coupon discounts. I just can’t figure out what their strategy is….
Safeway may administer more flu shots this year. Not everyone gets their flu shots at a pharmacy and I am not sure that getting a flu shot at a pharmacy creates loyalty as much it provides convenience to those people whose insurance card is accepted or who do not want to wait for their doctor’s designated “flu shot day.” Safeway may give more flu shots this year but that in itself will not build loyalty or be enough to make people switch pharmacies or grocers.
The price savings is worthless, whatever it is. However, the move is a good one. I have long recommended that retailers NOT define their businesses by the merchandise they happen to stock, but rather by the needs of the customers coming through their doors, that they might reasonably satisfy. This of course has to be considered in the larger context of big head/long tail merchandising. The first (big head) creates significant sales and the second (long tail) is a powerful attractive force that brings shoppers into the store — even if they don’t buy any.
I’m pretty sure that in past years I have received discounts when getting my flu shot at Safeway. I think the truly new news here is that they seem to be marketing the program more aggressively this year. In the past, I had seen on-site signage, but this year they seem to have much more media against it. If they can truly get incremental trips from the media (vs. other traditionals, Trader Joe’s, Whole Foods, etc. … not just versus drugstores), then I would think it’s a good idea.
In the past, Safeway offered coupon books with pretty big value private label coupons to flu shot customers that I would argue provided greater savings to the customer than this.
Consumers will get their shot where it is most convenient. I have noted Safeway’s pharmacies frequently have shorter hours of operation than pharmacies operated by Walgreens, CVS, Target, and even Kroger. I don’t know if those other stores immunize during all of their pharmacy hours but if so all those Safeway pharmacies with 7 PM weeknight closure, and 3, 4 or 5 PM weekend closure put them at a competitive disadvantage right there.
Last year I noticed many stores offering flu shots all summer. They over bought vaccine, it appeared. Some were even offering free flu shots.