Penn Traffic Builds Behind New Branding Effort

JON SPRINGER

SYRACUSE, N.Y. — It's not just a slogan, it's a way of life.

That's how Gregory Young, chief executive officer of Penn Traffic Co., described the company's approach to its newly launched “Big Smiles, Fresh Food, Low Prices” advertising and branding campaign.

“It isn't a short-term promotion, nor is it just an advertising slogan. It's central to how we'll serve our customers, offer and price our products, shape perceptions of our stores and demonstrate to our shoppers the benefits of shopping with us,” Young said during remarks at Penn Traffic's annual meeting here last week.

It was the first annual meeting in six years for Penn Traffic, which is untangling itself from years of bankruptcy and regulatory woes that precluded such meetings. Penn Traffic earlier this year completed a backlog of resubmitted filings and was current with regulatory obligations as of its most recent quarterly report, said Young. The company also recently settled a significant claim stemming from its Chapter 11 filing and is hopeful of clearing away the expenses and distractions from that event in the current year, he added.

The new advertising campaign has been launched in all 96 of Penn Traffic's P&C Foods, Quality Markets and BiLo Foods stores, with new interior and exterior signs as well as fresh radio, television and print advertising.

Young said the campaign highlights initiatives adopted as part of Penn Traffic's strategic plan.

“‘Big Smiles’ is about making sure our stores take advantage of their convenient neighborhood locations, are easy to shop and are staffed by fully trained, service-oriented associates,” he said.

“‘Fresh Food’ represents our renewed commitment to providing an appealing array of products, including superior-quality fresh vegetables and value-added specialty products that are unique to our stores. Emphasis is also placed on items with local preference,” he added.

Young said ‘Low Prices’ highlights programs that provide greater value throughout the store, including a slate of lower everyday prices, the Food Club private-label brand, and discount and reward programs related to the Wild Card loyalty program.

“Much work remains to be done to ensure the long-term success of the company,” Young told investors, noting that a $12.4 million loss in the fiscal first quarter, which ended May 3, stemmed in part from a decline in revenue related to closed or sold stores, new competition and reduced store traffic as consumers felt the pinch of higher gas prices.

He reiterated a plan to focus investments on the company's best-performing and highest-potential stores, while reducing internal expenses and optimizing the wholesale division, which provides approximately 20% of the company's $1 billion in annual revenue. This plan resulted in the sale or closure of 10 stores last year, along with the Penny Curtiss bakery and a warehouse in Jamestown, N.Y.

“Closing or selling operations is a necessary step to improve the fiscal health and well-being of the company as a whole,” Young said. “We don't make these decisions lightly, but we will not avoid them when they are in the best interests of the company and our stakeholders.”

Shareholders at the meeting approved the election of eight directors and ratified the selection of Eisner LLP as the company's accountant.