More Bang For the Buck This July 4th

ELLIOT ZWIEBACH and MARK HAMSTRA

Retailers last week said they anticipated the summer season to get off to strong start over the July 4th holiday, as consumers were ready to gather around their grills for a long weekend of celebrations.

“We and all of our competitors have worked hard to get the right things out there for people,” said Jeff Noddle, chairman and chief executive officer, Supervalu, Minneapolis, in an interview with SN. “Obviously, prices are higher, but there are some great values out there.”

With consumers pressured by price increases for food and fuel, supermarkets were well-positioned to offer shoppers solutions for low-budget celebrations, retailers said.

Mike Proulx, president and chief operating officer of Bashas', Chandler, Ariz., told SN that the chain was “focusing on a value message” this year.

“We're promoting essential value items and affordable indulgences that will get people to stretch their dollars to celebrate a bit,” he said.

The chain's ads for the holiday kicked off in late June, and sales were trending “very well” as of early last week, Proulx said.

As the cost of gas in Arizona rose to $4.13 a gallon, he said he expected consumers would “stay close to home” and have multiple barbecues.

Bashas' promotions centered on “all-American items,” Proulx said, including watermelon, hot dogs, hamburgers, soda and chips. The chain is still promoting steaks and ribs — along with poultry and hamburger — “but not as many as we did last year,” he said.

In northern Arizona, where temperatures tend to be cooler than in the Phoenix area, Bashas' stores featured outdoor barbecue events where items like tri-tip steaks and ribs were offered.

Dick King, vice president, Associated Food Stores, Salt Lake City, said his company has had sales gains of 7% to 8% through the first half of the year (see Page 10), but it had anticipated an even bigger spike over the holiday weekend.

“We were a little soft on Memorial Day, but we had a lot of wet weather and still had some snow then,” he told SN. “But the weather has dried out and warmed up since then.”

The member-owned cooperative expected to do a good business in fireworks where they are legal, King said. Rather than selling packages of fireworks priced at around $49.99, the company has added a larger size this year, priced at $99.99, “and we saw good sales on the larger size the weekend before the holiday, as more people apparently planned to stay home and shoot them off in their backyards,” he said.

Stores also began offering chicken breasts in a new 10-pound pack to compete with club stores, King said, in addition to its traditional 5-pound package.

The stores also promoted soft drinks at $12 for four or five 12-packs, depending on the retailer.

Steve Junquiero, executive vice president and chief operating officer of Save Mart Supermarkets, Modesto, Calif., said his company also had a soggy Memorial Day and anticipated making up for it over the July 4th weekend.

He said Save Mart didn't promote differently from prior years, “but there's no question that fuel prices and the economy are issues that concern consumers, and they weigh heavily on us as well. With gas averaging $4.50 a gallon and with Stockton, one of our major markets, designated as the No. 1 city for home foreclosures, the economy is on everyone's minds.”

He added that although the company has seen a shift in shopper buying patterns, during a holiday week “people default to the items they always buy for holiday celebrations.”

Jeff Reasor, CEO of Reasor's, Tahlequah, Okla., said July 4th is traditionally one of the chain's busiest holidays.

“Even though hot dogs and hot dog buns and mustard and things like that are not the largest in terms of dollar sales, there are a lot of [big picnic gatherings] going on,” he told SN last week.

One quirk in this year's holiday promotions, he noted, was a request from snack maker Frito-Lay not to advertise its products heavily because the heavy rains in the Midwest had tightened the manufacturer's potato supplies.

He also said he thinks the economy is not suffering as much as it is being portrayed in the media.

“I think the TV and the newspapers have done a good job of scaring people,” he said. “This turmoil with sub-prime lending is going to run its course, but they keep talking about it on TV, and that just makes it worse. The economy is not as bad as some people might make you believe.

“We've tempered our outlook a little bit, not because we're pessimistic, but because we're witnessing people's attitude change,” he said.