RETAILERS LOCK IN LOW PRICES FOR LONGER

Carol Angrisani

SCHENECTADY, N.Y. -- Week-long specials remain the mainstay of most price promotions. In an effort to encourage more pantry-loading, though, retailers are making offers that last four, eight and even 12 weeks.

Price Chopper here and Winn-Dixie Stores, Jacksonville, Fla., have cut prices on numerous products until July 4. A&P, Montvale, N.J., and K-VA-T Food Stores, Abingdon, Va., are running month-long price reductions.

While Price Chopper has conducted extended-period promotions, called "Good 'Till," for the past 25 years, it just significantly increased the number of price discounts from 2,500 to 4,000.

"We are a promotional merchant. So, in addition to the discounts offered in weekly ads, we're making a commitment to consumers that thousands of price reductions will be offered for an extended period of time," Mona Golub, chain spokeswoman, told SN.

Price Chopper works with vendors to lower prices on select products from eight to 12 weeks. The offers run four times a year: the winter holidays, early spring, early summer and fall.

The current event is called "Good 'Till July 4." Customers who use their loyalty cards can get savings on participating products through Independence Day. Both national-brand and private-label products are included. Savings range from 10 cents to $7, Golub said.

Qualifying items are highlighted in store circulars and on shelf tags. They include Kellogg's fruit snacks, 4.8 ounces, $1.97; Altoids cinnamon gum, 1.05 ounces, three for $3.99; Price Chopper-brand solid white tuna, 6 ounces, $1.19; and Central Market Classics (Price Chopper's upscale private label) honey- roasted cashews, 8.5 to 10 ounces, $4.49.

"The promotion is tailored to reach consumers in many cases with secondary and tertiary items that may not be in our weekly ads," Golub said.

Winn-Dixie is running a similar extended-period promotion of its own, slashing prices on hundreds of items until July 4 for customers who use their loyalty cards.

"We've worked hard to 'lock in' low prices on hundreds of items throughout our store," Winn-Dixie wrote in its store circular.

A Winn-Dixie official did not respond to SN's requests for comment.

Qualifying items include Oreo cookies, 15 to 18 ounces, two for $5; Kraft barbecue sauce, 16 to 18 ounces, 88 cents each; Beech-Nut baby foods, 4 ounces, 10 for $4; Doritos, 10 to 13 ounces, two for $5; and Winn-Dixie foam lunch plates, 150-count, $3.79.

The Price Chopper and Winn-Dixie campaigns come at a time when a growing number of retailers have adopted everyday-low pricing on commonly purchased items to compete against low-price formats, such as supercenters and limited-assortment stores. In a recent example, Raley's Supermarkets, Sacramento, Calif., just lowered more than 5,000 prices at its Raley's, Bel Air and Nob Hill Foods stores.

Paul Weitzel, vice president, Willard Bishop Consulting, Barrington, Ill., described Price Chopper and Winn-Dixie's efforts as variations of EDLP, calling them "selective EDLP."

Weitzel said he wasn't surprised that Winn-Dixie is involved in such a campaign. Due to its recent bankruptcy filing, it's trying to do all it can to increase store sales, he said.

However, Winn-Dixie is far from alone in encouraging pantry-loading. A&P, Montvale, N.J., is running a month-long "Summer Savings," offering sales on select products through June 3. Items are identified with "Price Hold" tags. Kraft barbecue sauce, Grey Poupon mustard and Crystal Light drink mix are included. The offer applies to a wide selection of A&P's private label, America's Choice, too.

"Don't forget to stock up on these special summer savings now through June 3, 2005," A&P's circular reads.

Likewise, K-VA-T ran a spring "Celebration of Values" from April 17 to May 14. Its weekly advertising circular was filled with "extreme value" savings on beverages, snacks and packaged goods. K-VA-T runs 90 stores in Kentucky, Virginia and Tennessee under the Food City banner.

"Prices are good all bloomin' month at Food City," the circular read.

Whether such a selective EDLP strategy works depends on how well the retailers communicate the value of the offer, Weitzel said.

Retailers Promote on a Different Level

Traditional price discounts like 10 products for $10 and buy one, get one free haven't gone away, but retailers are dabbling more with new types of promotions.

"Chains are looking for unique ways to promote," said Paul Weitzel, vice president, Willard Bishop Consulting, Barrington, Ill. Not only do strategies like 10 for $10's lose their newness, they eat into profits, he said.

"You get to win first one or two times, and it's hard to sustain itself," he said, adding that each price cut requires "an exponential increase in volume to make up for it."

Competition from Wal-Mart Stores has put pressure on supermarkets to "try anything and everything" to stand out from the crowd, added Spencer Hapoienu, president of Insight Out of Chaos, a New York-based marketing management firm.

One such tactic is to offer "rewards" to shoppers who purchase certain products during a promotion period. Kroger, Cincinnati, ran one such campaign in April. When customers purchased any of 1,500 designated products, they earned rewards for a $10 to $20 savings on a future shopping trip during the redemption period.

Rewards were earned between April 3 and 16, and, depending on the store's location, redeemed from April 19 to May 9.

Pink shelf tags identified qualifying items, which included Lysol disinfectant sprays, Swiffer duster kits, Scott paper towels, Betty Crocker cake mixes and Frito-Lay salty snacks.

Ahold USA's Stop & Shop/Giant-Landover division, Quincy, Mass., meanwhile, is offering deli discounts to shoppers who purchase select food, beverage, fabric care, baby care and other products from Procter & Gamble. Shoppers who buy $30 worth of products in one transaction receive a checkout coupon for 30% off their next total deli purchase. There is no limit to the number of checkout coupons that can be earned. Called "Rewards In Store," the offer kicked off May 1 and runs through May 28. Qualifying brands include Folgers, Pringles, Cheer, Luvs and Pampers.