PHILADELPHIA — Save-A-Lot is launching a major private-label initiative based on a better understanding of its shoppers, who are largely lower-income families.
The two-year program calls for consolidating Save-A-Lot's line of “exclusive brands,” developing more health-oriented products, and aggressively marketing the image and price advantage of its products.
“We're going to be more consumer-centric by understanding our consumers' wants and needs. That's going to help our stores and our brands. So, I'm fairly bullish about our prospects for the next couple of years,” said Bill Shaner, president and chief executive officer of the St. Louis-based extreme-value retailer, which is owned by Supervalu. He spoke here this month at the second annual Food Industry Summit hosted by the Food Marketing Department of St. Joseph's University.
Three-quarters of the products in the dry grocery, frozen food and dairy departments are private label, which are sold for 40% less than comparable products in local supermarkets, he said. The assortment includes 171 different private-label brand names.
According to Shaner, research revealed that the large number of different brands wasn't “resonating positively” with the store's core customers, most of whom are from households earning less than $50,000 annually. Forty percent of Save-A-Lot households earn $35,000 or less.
“Our quality is very strong, but we want to upgrade our image,” he said. “We want to brand our ‘exclusive brands’ more effectively, much like a CPG company does. We want to improve where we are today in terms of brand recognition.”
Initial plans call for reducing the number of different brand names — including Bay Mist and Shaner's — from 171 to about 50.
“We're going to be consolidating these names into something like ‘super brands.’ We'll market them to raise consumer awareness of what they really are. We believe that should translate into more positive sales,” said Shaner.
Research showed that Save-A-Lot shoppers suffer disproportionately from diabetes and obesity compared with the general population. So the retailer plans to develop more “health-oriented” food products suitable for diabetics and generally lower in fat, calories and sodium.
“The idea is to give our consumers more lifestyle choices within the Save-A-Lot assortment,” said Shaner. “We can supply different things with our meat, produce and Center Store products to fill that niche. We'll be marketing that they can eat healthy in a Save-A-Lot store. Consumers say they are looking for that, so there's a real opportunity.”
Save-A-Lot operates and licenses about 1,200 stores in 42 states, with most units being east of the Mississippi.