LANDOVER, Md. -- Giant Food here is doing an about-face in its pricing and merchandising philosophies at its Northern division stores, which operate under the name Super G.
The pricing change -- a switch to everyday low pricing -- will enable the chain to differentiate itself from its competition, while the merchandising change -- carrying products that meet local demand -- will make it easier to blend in.
The company, which began moving north from its Baltimore-Washington base two and a half years ago, operates nine Super Gs, including six in New Jersey, two in Delaware and one in Pennsylvania.
The company said it plans to have 40 Super Gs in operation within the next 10 years, with four more due to open in Pennsylvania in the second half of this year.
Until late May, the Giants and Super Gs had been virtually identical, except for the name. However, a Giant spokesman told SN last week that Giant has replaced its traditional high-low pricing format at the nine Super Gs with an everyday-low-pricing approach "due to competition."
He said Super G made the switch to EDLP "on thousands of products people use every day." The company also converted to EDLP at a couple of Giant stores on Maryland's Eastern Shore that operate as part of the Northern division, the spokesman said.
In addition, Giant has decided to merchandise the stores to accommodate local consumer demand in the Northern division, according to a newsletter sent to SN by the chain.
The newsletter said Giant will merchandise the Super Gs based on the needs of customers in the Northern division, rather than trying to convince them to accept the programs Giant runs in stores closer to its home base.
To accommodate the merchandising change, Giant said it has created a new position -- director of merchandising and operations, Northern territory -- to blend the chain's traditional Mid-Atlantic merchandising programs with customer demand in the Super G stores. Rob Harman, a former district manager in the Northern division, was named to the new post.
Quoted in the Giant newsletter about his appointment, Harman said Giant plans to micromarket each Super G store by stocking it with products "and merchandising those products to reflect the tastes and purchasing patterns of each neighborhood."
According to the newsletter, "This is a marked change from the purchasing and merchandising scheme with which we opened our first Super G stores . . . [when] we were relying on the purchasing program in place for our Giant stores to carry over to the Northern territory. That simply didn't work."
The newsletter went on the quote Harman: "All of our competitors have pickle barrels. Our first reaction was that it wasn't something we wanted to add to our product line.
"[But] the thing was, our customers expect -- and want -- a pickle barrel in their grocery store . . . Now, with the new micromarketing concept in place, we'll have pickle barrels." According to Gary Giblen, managing director of Smith Barney, New York, "Giant virtually sets the pricing in the Baltimore-Washington market, where it is the dominant operator. But in the Northern region, competition from Pathmark and ShopRite made it so tough on Giant that it decided it needed more oomph in its pricing."
Giblen said the fact the EDLP program was introduced fairly quietly "suggests it's an experiment, a trial balloon, that Giant can get out of if it needs to." Giblen said the appointment of a separate merchandiser for the Super Gs is an indication that "Giant is learning it can't come into a new area and do the same things it does closer to home and force consumers to change but rather it has to adjust to what consumers in New Jersey and Delaware prefer."
