LAS VEGAS — Save-A-Lot hopes to gain a larger share of the lower-income grocery market by rolling out a series of marketing initiatives that are already helping to boost sales, Mike Jackson, president and chief operating officer of Supervalu's retail East division and Save-A-Lot, said at Supervalu's investors conference here last month.
The lower-income grocery market encompasses 42 million households and accounts for annual sales of $97 billion, he said, “yet extreme-value retailers like Save-A-Lot are capturing only 22% of that total, so there are significant growth opportunities there.”
Save-A-Lot is becoming more customer-centric, Jackson said, by dividing its 1,180 stores (encompassing corporate and licensed locations) into four regions — Northeast, South, Southwest and the Northern tier of the U.S. — to customize assortments and merchandising, respond more quickly to local changes, and improve product selection and speed-to-market.
Programs already in place include the following, he said:
Moving the produce departments to the front at 316 stores, in an effort to emphasize the company's commitment to fresh “and to give consumers a solid introduction to the store in terms of value and quality,” according to Jackson. To make the departments more appealing, he explained, Save-A-Lot plans to work with local suppliers, as it did last August in Michigan, where it promoted locally grown produce in a joint effort with the state Department of Agriculture. “We had produce from 100 local growers at good price points, and we had very positive results, with good sales lifts,” Jackson said.
Save-A-Lot hopes to expand the local produce program to 60 additional locations within a year, he indicated.
Integrating national-brand sodas and snacks at 1,157 locations. “Customers tend to be brand-loyal in those categories, and nearly all the sales we've had in those areas have been incremental, with no cannibalization of store brands,” Jackson noted.
Adding a 42-item set featuring low-sugar, low-fat and low-sodium products at 1,122 stores as part of an effort to be more relevant from the standpoint of health. “The consumer response has been very positive, exceeding our expectations,” Jackson said. Save-A-Lot hopes to have the soda and snack program and the healthier offerings at all stores within a year, Jackson said.
Adding 19 SKUs of beer and 17 SKUs of wine at 176 stores in Florida, Texas and Ohio. “We're making promising progress, with sales building steadily,” he said. Licenses are pending in four other states, he added, and the company hopes to add beer and wine at another 55 stores within a year.
Installing financial services at 73 stores to serve a customer base “that's usually underserved by the traditional banking system,” offering check cashing, wire transfers, bill payment and money orders, with postage and lottery tickets being added. “It's been a strong traffic-building program,” Jackson said. Save-A-Lot hopes to add financial services at 70 more stores within a year, he pointed out.