Viewpoints

Food Retailers Affirm Price Is Still Paramount

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Economic forecasts may be completely irrelevant at this point.

For some time now they’ve been pointing to improving conditions in the U.S. None of that means much to food retailers, who run their businesses based on more relevant data about how consumers are actually behaving. The latest retailer feedback underscores that consumers still feel challenged and price is still king.

Here’s a sampling from recent SN news stories:

Giant Eagle just cut prices on some 3,000 items, its biggest such effort to date, and is accelerating its hunger relief efforts.

Dollar General said in its year-end report that the trading down trend is still strong as consumers are still hurting from the economy. Not surprisingly, the dollar store operator is a beneficiary of this shopper behavior.

• A new discount business, STL Global Sales, was just created with wholesale, retail and e-commerce elements. Founded by a “dream team” of value retail veterans including Bill Shaner, former Save-A-Lot CEO, the business will aim to “deliver exceptional values at a time when consumers place tremendous importance on saving both time and money,” said one of the founders. 

The question now for retailers isn’t whether to make price and value a strategic centerpiece, but precisely which approaches to take. This is where things get more complex.


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Two recent reports provide insights. One of these, by NPD Group, focuses on the restaurant side but has relevance to retail as well. In a counter-intuitive finding, NPD said customer visits to restaurants for “meal deals” were down. However, NPD analysts said the reason was that some restaurants were failing to rotate deals, instead sticking with the same ones so long that customers stopped viewing these as deals at all. So the message is consumers want variety in their deals. Does that finding indicate to retailers that promotional strategies are more important than everyday low prices at this point? 

Maybe retailers can have it both ways. In a recent “Times & Trends” report called “Supporting the Value Proposition,” SymphonyIRI Group urged retailers to “establish a solid, everyday pricing strategy for each of your categories/brands, and supplement with highly targeted, tactical temporary price reductions to capitalize on existing/emerging short-term opportunities.”

That would seem to be a good mix in this more complicated environment, as consumers seek both consistent value and price pizzazz.

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David Orgel

David Orgel is executive director, content & user engagement, of Supermarket News (SN) and its website, SupermarketNews.com. Orgel delivers his opinions on industry trends through a bi-weekly...

Carol Angrisani

Carol Angrisani is an associate editor at Supermarket News. Along with covering the packaged goods beat, she also manages SN’s annual private-label and ethnic marketing supplements. Carol...
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