FROZEN FEUD

BOB BAUER

DALLAS -- There's a dogfight under way in this rapidly growing marketplace, a fierce battle that includes some of the nation's largest chains, all trying to get a piece of the region's sweetening grocery pie.

Frozen food departments have become strategic battle sites in the clash. New, larger departments, a strong emphasis on price and heavy advertising are just a few of the tactics being used to quash the competition.

The top-three chains in the area, according to local market observers, are Albertson's, Boise, Idaho; Tom Thumb here, and Kroger Co., Cincinnati. "They're the most aggressive in frozen foods," said one source. "They promote it a lot. They display them properly. Those three are pretty equal in merchandising."

The biggest player in town is Albertson's. The chain's Texas division has 59 stores in the Dallas-Fort Worth area. One local source said Albertson's accounts for 34% of the area's grocery business.

A typical Albertson's store in this marketplace runs about 55,000 square feet, according to Roger Palmer, the division's grocery sales manager. In frozens there is usually 220 to 240 running feet of combination upright and coffin cases.

Palmer said the customary spot for frozen food for Albertson's is in the center of the store. Keeping the location constant, he said, helps customers find frozen food as they shop in different Albertson's stores.

"We have a mixture of store styles in the Dallas area," Palmer said, regarding the mix of coffins and upright cases. Much of it depends on the age and origin of the store. "Stores as a result of the Jewel Osco acquisition are all coffin. There is a move to all door-style in the new stores."

There's also a move toward club-pack sections within Albertson's frozen sections. During a visit to the Dallas area, SN found that Albertson's stores it toured had an average of five doors and a significant number of signs devoted to Plus Paxx.

"We do a better-than-average job of displaying and promoting club packs in our frozen food departments over the Dallas competition," Palmer said. "We have expanded the section about 25% and improved the item selection [within the past year]."

However, when local observers were asked about Albertson's merchandising and promotion of frozen foods, they gave the chain lukewarm reviews.

"If you take their 160-plus stores, yeah, they'll sell more frozen food than Tom Thumb will. But they won't sell more frozen food per store," said one observer, though he added that the chain does do a good job in private-label frozens.

Albertson's stores SN visited were generally neat in appearance and well stocked. In addition to Plus Paxx signs, pricing signs were noticeable throughout.

"Our in-store signing includes both Bonus Buy promotions and EDLP price compares," said Palmer. Frozen foods, he noted, account for about 8% of store sales.

The chain's Bonus Buy signs feature a different twist than similar signs in most stores. Some tell shoppers how long the item will be on sale; others list the date the item's price was reduced. The price comparison signs -- something done by most chains in the market -- often compare Albertson's prices to those at Kroger or Tom Thumb.

Kroger with what one source said was a 16.5% share of the market, scored high with local observers.

"The up-and-coming chain in this market in terms of frozens is Kroger," said one source. "Their stores are getting bigger. They're devoting more space to frozen food. They were always Tom Thumb's largest competitor in the frozen food case and they will be the largest customer development index retailer this year," he said. The customer development index, or CDI, is a method of gauging a retailer's strength in a category by measuring sales per square foot in the department.

"They just opened a store that has more than 300 frozen doors in it -- the largest frozen food display I've ever seen, and I've been in this business for 21 years."

"The newest Kroger stores are probably the best in the market," said another observer. "They've opened up about five or six stores this last year that are just super in terms of merchandising; lots of extra space."

During SN's visit, Kroger had some of the best in-store signs in the market. In one store, prices of some of the club packs were painted on the freezer doors. In that same store, triangular signs were hung on the upper corners of some of the doors: for example, 69 cents for Kroger chopped spinach. Kroger officials declined to comment to SN, but the company's new, larger stores have area observers thinking the chain will soon pass Tom Thumb as the No. 2 company in terms of dollars and the top firm in frozens CDI.

Kroger's expansion comes at a time when some say Tom Thumb's attention is heading south to Houston -- home of parent company Randalls Food Markets.

"Since the purchase by Randalls, Tom Thumb's business has gradually declined. They've just closed their buying office in Dallas for the Tom Thumb stores. With that happening, their business will go down again," said one observer.

"They're going to do all the merchandising out of Houston. The buyer and merchandiser for Randalls will also handle Tom Thumb. When you have a buyer responsible for two separate chains, they can't be an expert on either one."

Kroger, he continued, has the most to gain if Tom Thumb declines. "They both go head-to-head. They have the same types of stores. They both build 75,000-square-foot stores. They both build appeal to the same customer base: high-profile, white-collar."

Mark Prestidge, vice president and division manager for Tom Thumb, said the buying department's move to Houston has not caused and should not create any problems.

"All of the store managers and the district managers are still out in the market checking the competition," he said. "Several of our category managers in Houston now have relocated from the Dallas market and have a good feel for what's going on in the Dallas market. And we're communicating daily as far as what the competition is doing."

He said advertising and promotion practices have remained the same. "We'll still continue to operate the Dallas-Fort Worth Metroplex market independently as far as what we advertise and in the deals we offer our customers. I don't foresee any problems in the way we go about advertising, displaying and merchandising our frozen food departments because of the shift in buying."

Winn-Dixie Stores is another large chain with a share of the Dallas pie. Most local observers put the Jacksonville, Fla.-based chain's share, which comes from about 80 stores, at about 9%.

"They're good in frozen foods, but nothing like Tom Thumb, Albertson's or Kroger," one local source said of Winn-Dixie. "The reason for that is because their stores are older and generally about 30,000 square feet. Some of the new ones are 40,000 to 45,000 square feet. But when you have a 30,000- or 45,000-square-foot store and the people across the street are having 75,000-square-foot-stores, you can't sell as much frozens."

Another said Winn-Dixie's area stores need to do more to call attention to frozen food. "The sections seem to lack identity," he said. "They just kind of sit there instead of calling the shopper into the aisle."

The frozens manager of one Winn-Dixie store showed more of a penchant for displays than most. The department included a Snack Station, which featured items such as beef patties, chicken fajitas and beef taquitos. Shoppers were drawn to the area by streamers and a handmade sign.

The other large chain with a presence -- albeit a small one -- in the area is Food Lion.

"They came in here -- if you'll pardon the pun -- like a lion a couple of years ago," said one observer. "They opened up a bunch of stores, but never achieved more than a 5% share. They closed a bunch of stores and now account for maybe 1% of the market."

Food Lion was using signs extensively to promote its frequent shopper program when SN visited the market. Price comparison signs, as well as closeout and new-item signs, also were prominent throughout the frozens aisles.

Minyard Food Stores, Coppell, Texas, has its roots firmly established in the Dallas area. Observers put Minyard's share, which includes the company's Minyard, Sack 'N Save and Carnival banners, at about 8%. Minyard stores are traditional supermarkets. Sack 'N Saves are club-type stores, and Carnival stores are geared toward ethnic markets, the Hispanic population in particular.

Minyard uses of mix of coffins and doors in its stores. Dividers are used between items, something Danny Wells, the chain's frozen-food buyer said keeps the aisle looking neat. "We try to do that in all of our stores. It makes it easy to shop. It makes it easier to stock," he said. Yellow signs are used to call attention to advertised items. Green Super Saver signs are used for temporary price reductions.

Wells said the approach to frozens is basically the same throughout the company's three formats, with only the obvious variations. Sale items at Minyard and Sack 'N Save stores, which comprise the bulk of the firm's stores, are usually different.