SAVE-A-LOT UPGRADES THE CENTER STORE OFFER

BARBARA MURRAY

EARTH CITY, Mo. -- Save-A-Lot is upgrading Center Store products and adding new labels as part of an overall effort to target a higher income demographic, executives of the fast-growing chain told SN in a recent interview.

The limited assortment chain, which carries about 700 exclusive labels among a product mix of 1,250 items, is moving its target demographic to the $50,000 and above household income range. Formerly, it focused on consumers in the $35,000 income range.

Some of the product upgrades include distilled white vinegar, which switched from an opaque white plastic container to a clear -- and differently shaped -- PET bottle and a more upscale label, and the newly introduced coffee creamer, Enhance, packaged in a cream and red contour bottle similar to that of the national brand, Carnation's Coffee-Mate. "We also added a little fat with the new bottle, which has a plasticized label, and we worked with the vendor on the pour spout, so it stays open when you pour it," said John Baumann, director of grocery and DSD procurement.

Another example of an enhanced value impression is the new package for T.J. Nelson's Chewy Granola Bars, sold 10 bars to a box. The bars inside are individually wrapped in a colored foil to match the outside of the box, instead of in a white inner paper as before, which Baumann said serves to reinforce the brand identity. Most Save-A-Lot exclusive brands are named for employees. In the case of the granola bars, Tara J. Nelson works in the store's advertising department.

Save-A-Lot's strategy was discussed in a recent interview with SN that included Baumann; Steve Harris, vice president, advertising and merchandising; and Charles A. Vedder, manager of label design.

Save-A-Lot, owned by Supervalu, opened its 13th warehouse this year, and plans to open one more next year as the concept spreads. Now in 36 states, it doubled the number of stores in the past five years and is closing in on 1,000 units. Save-A-Lot is now engaged in moving into Baltimore, where the company plans to open 10 to 12 stores over the next 12 to 18 months.

In discussing additional product upgrades, Baumann said he has witnessed a departure from the thought that "the more it costs, the better it is" on the part of consumers.

"In some cases we have built our product to be better," he told SN, citing frozen broccoli from Mexico, which he said contains 33% florets instead of the more usual 25%.

"We want to offer quality at the right price, not a cheap product. We go for quality first," he said, even though the chain of stores advertises that shoppers can save up to 40% on their overall bill there.

"As we continue to grow and add stores, we will have an even greater buying power. We can mandate quality and improved packaging, since it will be cost-efficient for us to do that," said Dan Kimack, manager of corporate communications for the chain.

In its testing, Save-A-Lot pulls product from the stores, rather than having the vendor send them, he said, to be sure they are the same as what consumers are buying. At its corporate headquarters here, Save-A-Lot tests products continuously in its test kitchen -- replete with the same sorts of appliances found in the home of an average consumer -- to compare its exclusive labels to the national brands and to those used by its chief competitor, Aldi, said Baumann.