CHAIN REACTION

PEG WALLACE

SAN FRANCISCO -- Although two major chains in this market, Lucky and Safeway stores, use differing promotional strategies in the beverage aisle, they both give their private-label sodas precedence over national brands.

At Lucky Stores here, a division of American Stores, Salt Lake City, Utah, the soda aisle varied in size from store to store, but the merchandising strategy remained the same.

At the Lucky Food Center on Alemany Boulevard in San Francisco, the department is orderly and attractive. During SN's visit, the department looked well stocked, except for Mountain Dew and 7-Up stock-keeping units. These items were depleted, compared to other soda brands, perhaps because a promotion was in progress.

The only signage outside of the aisle was a large perimeter wall sign promoting the Mountain Dew Final Four Contest. In the aisle there was no additional information regarding the contest. The store was also heavily promoting the new Pepsi blue cans and bottles.

In-aisle, the store heavily advertised the Lucky Rewards program and Key Buys. Shelf tags were placed under nearly every brand of soda in the aisle, both national and private label.

The soda aisle had a fairly even ratio of Lucky store brands to national brands. A significant amount of shelf space was dedicated to Lucky and national brand fruit-flavored sodas. Lucky's fruit-flavored sodas included strawberry, grapefruit, grape and lemon-lime. Tucked away on the bottom shelf was a small offering of Hansen's Natural Sodas.

The soda aisle at this store was 36 feet long -- about half the size of a typical Safeway department. But supplemental displays were used; for example, several shelves in the adjacent water aisle were devoted to the store-brand soda.

This store, as well as the others that SN visited, heavily emphasized private-label selections. Most national brand six packs cost $2.59, up from $1.29 for Lucky-brand six-packs. For 2-liter bottles, the national brands sold for 99 cents, 20% more than the 79-cent price for the Lucky brand 2-liter bottle.

The soda aisle in this store was highlighted with a summer barbecue display on an endcap. A summer scenario, highlighting Lucky-brand sodas, displayed small-sized grills, coolers, hibachis, beach umbrellas, a portable sun shelter, various beach toys, outdoor games, outdoor chairs and charcoal.

Another Lucky store, located about two miles away on San Pedro Road in Daly City, had a less attractive soda aisle that seemed to have been overlooked.

The department, the same size as the Alemany Road unit, was tucked in the far right front of the store without any aisle sign. The department's size and product selection was similar to the Alemany unit. There was an even ratio of store brands to national brands and alternative selections, including the Hansen's Natural Sodas.

But unlike the Alemany Boulevard store, this unit didn't use signage to promote any of the brands. However, it did use shelf tags to highlight Lucky Rewards and Key Buys, even on the empty shelves.

The section was located next to the liquor and bakery departments. While there was no aisle sign, stacks of Lucky brand cola and diet cola sat at the front end of the aisle to attract shoppers' attention. Store brands were again emphasized, encompassing the entire first half of the aisle. National brands were relegated to the back half of the section.

The pricing at this location mirrored the Alemany Boulevard location.

The shelves in the soda aisle were perhaps two-thirds stocked, with some shelves completely empty.

The store had secondary displays, at the front of the store near the registers, for two-liter bottles of Coke and Diet Coke. These displays did not use signage.

The third Lucky Food Center was located on Sloat Boulevard, three miles from the previous location, in the Sunset district. The department layout had the same dimensions and the same neighbors -- the bakery and liquor aisle -- but was very different in appearance. This aisle was extremely neat, well-organized and fully stocked.

The right front endcap displayed Sunkist, 7-Up, and Crunch & Munch snacks. The left front endcap housed the Lucky brand sodas: cola, ginger ale, grape, strawberry and root beer.

On the left side of the aisle were the Lucky store brands: two-liter bottles on the top two shelves, six-packs on the second shelf from bottom, and twelve-packs on the bottom shelf. National brands were merchandised in the same manner. In fact, this stacking formula was common to all the units SN visited, at both Lucky and Safeway.

Pepsi was stacked on the endcap at the back of the aisle with no signage. Specialty items and traditional mixers were in the next aisle to the left, which primarily stocked water and included Starbucks Frappuccino and IBC Root Beer.

Secondary displays were found at the end of the snack aisle and included displays for two-liter bottles of Coke and six-packs of IBC Root Beer.

Safeway Stores designated more square footage for their soda aisles, which ranged from 6-to-8-feet wide and 64-to-88-feet long. As with the Lucky locations, there was very little emphasis on signage, aside from the promotion of discounts offered through the shelf tags in the aisle. Discounts were tied to the Safeway Club card.

At the Safeway location in Westlake Mall, the soda aisle faced customers entering the store. There was a large Pepsi display on the right front endcap, and a Safeway Select soda display on the left.

The beginning of the aisle housed specialty items, which included Hansen's Natural Sodas, Henry Weinhard's Vanilla Cream and Root Beer, IBC Root Beer, Coke in old-fashioned bottles, Diet Rite fruit sodas, and I.C. Cool-AH regular and light soda.

Also found in this section was Starbucks Frappuccino, Nescafe Blended Iced Coffee, Barq's Root Beer, Squirt and Sunkist sodas.

Following the specialty items were the Safeway Select brand fruit sodas, of which there was a vast selection: pineapple, strawberry, grape, cream soda, punch, and Dr. Skipper. Following the Safeway Select brands were the national brands -- Slice, Sunny Delight, Sprite, and 7-Up. The traditional colas followed, including Coke, Pepsi and Safeway Select cola, both the regular and diet versions.

The emphasis, supported by pricing, was on the Safeway Select brands. The price of a two-liter national brand was $1.49, for example, versus the Safeway Select price of $ .99; national brand six-packs sold for $2.59, compared to Safeway Select brands, priced at only $1.39. The Safeway Club card offered a buy-one-get-one-free offer on Pepsi two-liter bottles.

The beverage department at this store was well kept, with every brand well stocked. The aisle was neat, clean and well organized, even though the store was very busy.

Secondary displays could be found in other areas of the store.

There was one display near the produce section comprised of Safeway Select sodas, various snacks, Mountain Dew and Pepsi. Additionally, there was a well stocked section of refrigerated sodas near the deli section.

The La Playa Safeway location, six miles from the Westlake location, was perhaps the most well promoted beverage section visited by SN.

Throughout the aisle were small handy items for sale -- soda tops, straws, bottle caps and can caps. On the top of the uppermost shelves were items such as coolers and beach chairs. These were placed throughout the length of the aisle.

The soda aisle came first in the store pattern. On the right endcap were stacked displays of colas: Pepsi, Coke and Safeway Select cola, both diet and regular. On the left endcap were snack food offerings.

Beverage organization at this Safeway location was like the previous unit SN visited. Mixers, both Safeway Select and national brands, were at the beginning of the aisle. However, this location included sparkling water, iced teas and juices with the specialty items stocked in the aisle, and also offered Surge, described as a "fully loaded citrus soda."

The national-to-store-brand ratio appeared even, with the pricing favoring the Safeway Select brand. Pricing differences between private label and national brands mirrored what SN observed at the first store.

This location also maintained a well stocked, well organized, and very clean soda aisle.

Secondary displays were again found near the bakery and deli sections. But on the endcap at the back of the cookie aisle was a display of Keebler cookies and Safeway Select fruit sodas. The endcap at the back of the pet aisle displayed Saltine crackers and Safeway Select colas.

A large selection of refrigerated colas could also found near the bakery.

Seven miles away the Safeway on Marina Boulevard had a smaller soda aisle, but it, too, offered a wide variety of items and was well stocked and well organized.

The Marina location heavily promoted the discounts of the Safeway Club card. Like the second store, the aisle displayed can openers, can caps, bottle caps and Coke magnets, in addition to soda.

The emphasis continued to be on store brands, with the same pricing formula as the other locations. Refrigerated sodas were displayed on the front end, and Pepsi cases were stacked on end caps in the front of the store.

In both Safeway and Lucky locations, fruit-flavored soda appeared to be the up-and-coming beverage, taking up almost as much shelf space as the traditional colas, including the in-store, Pespi and Coke brands.

Generally, the Safeway beverage aisles were more user-friendly, with more variety in stock and a more thoughtful presentation.