CARVING LOSSES

PAMELA BLAMEY

It is the subject of many a dry joke in the meat department: How can we lose the least amount possible on turkeys this year?

That turkeys are loss leaders in Thanksgiving promotions is a given. The question these days is how to control the loss. In an informal poll, retailers told SN they have employed a wide range of tactics. Some have tried to promote smoked turkeys or other prepared birds as alternatives that bring more revenue. Others have turned to coupon promotions. There also have been attempts to increase consumer interest in other options in the meat department, such as hams and roasts. But throughout the country, turkey still reigns supreme. Americans show no sign of giving up what is, after all, the traditional centerpiece of this holiday.

"At this point we expect turkey consumption at Thanksgiving to remain pretty steady," said Joel Brandenburger, spokesman for the National Turkey Federation, Reston, Va.

"We expect consumption to be somewhere in the neighborhood of 45 million turkeys on Thanksgiving day, which is historically where it's been for the last couple of years."

Promotions that involve consumers earning and saving coupons have become very popular among retailers.

"In the last couple of years we went to coupons, because you just can't get out of giveaways in a competitive market," said Douglas Hanson, meat, fish and poultry supervisor at Rosauers Supermarkets, Spokane, Wash. Hanson told SN he doesn't anticipate turkey emerging from its loss leader rut anytime in the near future. "If you don't give the turkey away, you're just not going to get the holiday business. [Supermarkets] kind of use the meat department to get that turkey ad out there so they can sell everything else."

He added that in spite of efforts to promote ham, turkey is still the No. 1 consumer choice. The chain has not put any major effort into promoting other alternative items. "You come out with your ad which has the total merchandising concept, the pumpkin pie and the whole meal, but basically we just get into ham and turkeys -- that's what's going to sell."

The meat executive at a Midwestern chain with more than 250 stores agreed. "Turkeys will be a loss leader in every market, because when one chain does it, the other ones have to do it."

The executive was scornful of claims that since turkey is a relatively cheap product at wholesale, supermarkets aren't actually losing that much money when offering the birds free or at a discount.

"When you lose 30 and 40 cents a pound, say it's a 25-pound turkey, you're losing $10 on that turkey. Now if you're giving away $10 per turkey, and you're making a 1% net profit in your store, or you're making a 2% net profit in your meat department, you're making two bucks. It obviously affects the total store results every Thanksgiving season."

Asked whether he saw any improvement in this situation for the future, he was skeptical.

"If you're in grocery merchandising, selling turkeys, you have these fantasies of getting a high price for turkey, you have these fantasies that they'll buy other products as well, you think that this year will be different, and when you get right down to it, you sell a dead turkey at a 30- to 40-cent loss and lose anything you've got left. It just doesn't work out the other way."

Hanson of Rosauers implied that retailers have, to a certain extent, shot themselves in the foot by getting customers used to this practice.

"I think what happens is we've trained the public so well that [we're] going to give away a turkey at Thanksgiving, they're buying both their Thanksgiving and

their Christmas turkey at Thanksgiving time," Hanson said.

"At Christmas we go through a truckload of hams. But I find that it's just about 80% turkeys [at Thanksgiving.] Ham sales are pretty minimal."

An executive at the 54-store Dallas chain Tom Thumb agreed that there is no point struggling against an all-out surrender to established customer preference during this very traditional holiday. "It's hard to pry them away from that turkey. We tried it with a big ham promotion at Thanksgiving last year, and we did pretty well, but it's just so traditional I don't think it's going to change very soon.

"I've tried to promote geese, ducks, Cornish game hens, and that business is not growing at all that I can tell. "The only other thing that may compete for the main course is a beef roast or a leg of lamb, and we do sell a lot of those for Thanksgiving, but I don't think they're etching away too badly at the turkey business."

"Turkey's so economical, so cheap, we've sold them as low as 19 cents [a pound] and now we're giving them away," he said.

"I think the turkey market is near what it was last year in terms of our costs -- we hope retails will be a little higher. We traditionally give turkeys away, but we'd like to sell some."

Promotions continue to creep up earlier in the year, with Kroger Co., Cincinnati, launching its new "Thanksgiveaway" program Aug. 20. A local Dallas paper explained that customers can collect a free turkey once they accumulate 10 "turkey point coupons." Kroger officials did not respond to calls seeking comment on this promotion. Tom Thumb also began its "Turkeybucks" program early this year. The chain began advertising the promotion Sept. 6, two weeks earlier than last year.

"This year the program is that if you spend $30, you get a coupon [a turkeybuck]," said the Tom Thumb executive. "If you spend $90 you get three turkeybucks. Each turkeybuck is worth a pound of a particular kind of turkey, our private-label Randall's turkey, at a redemption period that begins about 10 days out from Thanksgiving."

Promotions like Turkeybucks are essential not only to get customers to buy their entire holiday meals at the store, the executive said, but also to maintain the store's image in the customers' eyes year-round. "The perception is there on the part of the customer that whether our retail is 19 cents or 39 cents per pound, so in effect a Turkeybuck is only worth that much, the perception is there that the customer is able to put the main course on the table for free. A green bean casserole when you put it together costs more than the turkey, but if you give them a turkey, they're pretty happy."

Although the Birmingham, Ala.-based Bruno's Inc. also has a "Turkey Bucks" promotion in its stores, customers earn dollars off their 10-pound or larger Butterball turkeys when they purchase specific products throughout the store. An ad appearing recently in a local paper featured individual "Checkout Coupons" for each of these items, offering between 50 cents and $2 off the purchase of the turkey.

Officials at Bruno's did not return calls seeking comment.

A similar program is available for the first time to savings club members at Big Y Foods, Springfield, Mass. Customers receive a Turkey Sticker for every $25 they spend with their Express Savings Club cards. Fourteen stickers earn a 10- to 13-pound frozen hen turkey, while for 21 stickers customers can collect an 18- to 21-pound tom turkey. The stickers are redeemable from Nov. 13 to 22.

Officials at Big Y would not comment further on the promotion.

Vons Cos., Arcadia, Calif., and its Pavilions stores in California and Nevada also tie promotions to the VonsClub and Pavilions Value Plus Club memberships, according to spokeswoman Monet M. LeMon. Customers who make $300 worth of purchases with their club membership cards between Sept. 27 and Oct. 31 are to receive a gift certificate for a free 10- to 14-pound turkey LeMon would not comment further except to say that although there may be other incidental promotions closer to the holiday, this is the biggest Vons sponsors.

In spite of predictions earlier this year that a brutal heat wave might have destructive effects on the turkey supply, retailers have not have found significantly higher costs at the wholesale level, nor are the birds fetching much higher prices at retail.