Just in case your customers haven't heard how much cheaper they can buy merchandise through alternative formats, some low-price specialists are cranking up the volume.
Dollar Tree, Chesapeake, Va., one of the country's fast-growing dollar chains, has begun ramping up its television advertising. Others in the low-price arena are also trying to make a bigger splash on the airwaves.
One facet of low-price specialists' success is their lack of spending on advertising. In Dollar Tree's case, however, the chain wants to invest to get its brand recognized in people's minds, especially in new markets where it has acquired other chains and converted them to the Dollar Tree banner.
Although Dollar Tree is not the most food-oriented chain in the dollar niche, it does offer many of the same health and beauty care products found in supermarkets. Some of the products are featured in the chain's new commercials, one of which was viewed last week by SN. The increase in advertising by Dollar Tree also could be a threat to traditional food retailers if, by advertising on TV, the company raises the bar for others that place a strong emphasis on groceries, such as Dollar General, Goodlettsville, Tenn.
Dollar Tree's ads are rolling out to 20 markets this year after a smaller, successful test last year.
Dollar Tree is not the only discounter increasing its TV presence. Big Lots, a Columbus, Ohio, purveyor of discontinued merchandise, including consumables, last week launched a $45 million national campaign to heighten its name recognition. The campaign is its second national TV effort.
Meanwhile, 99 Cents Only Stores, Commerce, Calif., which has seen an increasing portion of its business coming from consumables, has increased its advertising in the Houston market to build name recognition and distinguish itself from other players, the company said.
Even some limited-assortment food chains are in on the game. For example, the rapidly expanding Save-A-Lot chain, a division of Supervalu, Minneapolis, has been investing in 15-second "bookend" spots at the beginning and end of commercial breaks. The spots use the tagline, "Just look at your receipt," and compare prices for its products to those at conventional supermarkets.
Clearly, the increasing noise about price serves as a warning that traditional supermarkets' voices will drown in the din if they stick to their age-old routine of price-themed promotions. The bifurcation of consumers into those who want the cheapest possible price and those who want quality, service and value appears to be gaining momentum.
Supermarkets had better not get caught in the middle without anything to say.
Speaking of having something to say, SN recently posed a few questions to Jack Brown, chairman, president and chief executive officer, Stater Bros., Colton, Calif. SN asked how his company performed during the labor dispute in Southern California. The discussion is framed within a new feature slated to appear every other week in SN, called "SN Asks." The inaugural installment appears on Page 16.