BIG Y FOODS TOUTS VALUE MEALS IN ITS AD CIRCULAR

ROSEANNE HARPER

SPRINGFIELD, Mass. -- Big Y Foods here is looking to get a bigger slice of the meals business with ads featuring bundled "value meals," and it's working, officials said.

In fact, since the chain began running "value meal" ads eight months ago, sales of the featured items -- slices of pizza, grinder sandwiches, and corned beef and pastrami sandwiches -- have risen at least 25%, said Scott Ruth, vice president of meat and specialty departments for the 44-unit chain.

"Not only have the ads enhanced sales of those items, but we're also sending a message to consumers that we have convenient meals, too. We're trying to be a restaurant, but we're not one. So we have to let them know what we have," said Ruth.

While the chain introduced value meals in its International Cafe pizza and sandwich shops a year ago, it just began featuring them in its ad circular last August. Since then, every week some space has been devoted to the numbered value meals. One week during the Christmas holidays the ad was given a full page in the chain's circular.

The value meals ad serves the secondary purpose of simply reminding customers that the chain has meals -- of all kinds -- for lunch and dinner, Ruth pointed out.

"We think it's important to keep reminding people that we have meals -- a whole variety of meals. That's why we're running the ad every week. We have a vehicle in the circular, and we think it's smart to take advantage of that."

Asked if any one of the bundled meals significantly outsells the others, Ruth said a pizza meal offering two slices of cheese pizza and a medium soft drink is the front-runner.

"I'd say it sells 30% better than the others. Pizza is a big deal, anyway. Who doesn't like pizza? Whether you're 5 years old or 100, it makes a good meal. We make ours from scratch, and we do very well with it. People often buy the two slices and a soft drink meal for kids. They each get a slice of pizza and share the soft drink," said Ruth.

Other items featured in the value meal ads -- overstuffed New York-deli style corned beef and pastrami sandwiches -- were introduced in selected stores last year. They've been a sales success, Ruth said, and have since been rolled out to all 22 Big Y stores that have an International Cafe food court.

The value meal ad is such a success that the chain will run it indefinitely, Ruth said.

"It's done a lot of things. We've traded our customers up, and that makes more contribution [to store profit] dollars for us."

Ruth makes no bones about borrowing the value meals idea from the fast-food industry. "It's a good idea and it's helping us compete," he said. No other supermarket in Big Y's territory is using such a tactic.

"The value meals sell best at lunchtime. In the evening, we sell more whole pies and grinders and hot chickens and meat loaf. Items more for the family," Ruth said.

The look of the value meal ad with its numbered meals makes it clear Big Y knows who the competition is. In fact, a quick-service restaurant menu board is the obvious model for one recent colorful half-page ad touting the meals. Significantly, the ad also calls attention to Big Y's "fresh" edge.

While the ad is headlined, "Make It a Value Meal," and describes numbered, bundled meals, with their "value" retail price, it also says, "Made from scratch!"

The ad also lets customers know that ordering will be as easy as 1-2-3. It lists three numbered meals from the Big Y International Cafe's sandwich shop and three numbered meals from its pizza shop.

One "value meal" from the sandwich shop includes a small grinder sandwich, a medium fountain drink and a 1-ounce bag of Lay's potato chips, for $3.95. An example from the pizza value meals is the best-selling two slices of cheese pizza with a medium fountain drink, for $3.50.

Industry sources praised the supermarket chain's meals-marketing efforts.

"Big Y's ad is getting much closer to what the fast-food restaurant industry is doing, and [restaurants] are the principal competition," said Neil Stern, a partner in McMillan/Doolittle, a Chicago-based retail consulting firm.

Not only is the chain pointing out the value of its meals, but the ad underscores that Big Y is a destination for ready-to-eat meals, Stern said.

"Ads like Big Y's reinforce the meals aspect of the [supermarket prepared foods] business," he said.

Another consultant who works with supermarkets said Big Y is particularly on target in making high-margin fountain drinks the major add-on in the bundled meals it is advertising.

"You have to be careful what you offer when you bundle meals. You want them to make money for you. You need to understand why the QSRs are doing what they're doing, and it looks as if Big Y does," said Howard Solganik, president of Solganik & Associates, a Dayton, Ohio, consulting firm that works with supermarkets.

"A bundled meal gives the customer a perceived value, and it increases the ring, but you also want to keep incremental costs to a minimum," Solganik said.

He added that the high-margin fountain drinks do that well. By contrast, adding a green salad or another labor-intensive item wouldn't be as good a choice, he said.

McMillan/Doolittle's Stern concurred.

"That's how the fast-food restaurants make their money. With drinks and french fries," Stern said.

The consultants said other supermarkets have a ways to go when it comes to marketing meals.

"I've seen very few supermarkets doing anything like [the ads Big Y has been running]. Dominick's in Chicago has done some things with "meal deals" built around their rotisserie chicken, but I believe it has been mostly in store, not ads," Stern said.

And Solganik said, "I applaud Big Y for this effort. There's certainly more work of this kind to be done in our industry."

Stephan Kouzomis, president of Entrepreneurial Consulting, a Louisville, Ky., firm that works with supermarkets, echoed that sentiment.

"You have to commend a chain for this type of effort. To devote the ad space and money to doing this shows they're serious. The industry needs to do more to let consumers know they are a source for meals," Kouzomis said.

Value meals and restaurant-like menu boards in its 22 International Cafes are not new to Big Y, but the chain has put more emphasis on fresh, prepared foods in its ads over the past year. It's not unusual to see a full page or half page devoted to meals items in the chain's circular.

"We introduced value meals about a year ago, but we just started giving them a lot of ad space about eight months ago. But each week, we're committed to a least a half page to advertise our food-court items," Ruth said.

Big Y officials have said in the past that the chain is going head to head with the restaurant industry with its International Cafes, which it launched three years ago.

"All my ads for this year are like restaurant ads. We consider restaurants, not supermarkets, our competition, when it comes to this department," said Roland Asselin, the chain's food-service sales manager, in an earlier interview at a Big Y store in Manchester, Conn.

The International Cafes are deemed a success, and new stores will get them, Ruth said. The next two will be unveiled at a new store and a remodel, both in Massachusetts, he said, before the end of the year.