GRAND UNION SET TO SERVE IN HOME MEAL REPLACEMENT

ROSEANNE HARPER Additional reporting: LISA TIBBITTS

WAYNE, N.J. -- Grand Union Co. here will bring its version of home meal replacement to the table in a big way this spring.

After testing deli-prepared whole meals at 25 stores in two markets, the chain will roll the program out and broaden it into a meal replacement strategy that will encompass practically all its fresh food departments.

The 230-unit chain's new strategy includes:

The launch of a dinner-for-two program.

Hot pizza by the slice and also by the whole pie, rolled out to all stores.

A catering service introduced in the two markets where it has been testing the HMR waters, Bergen County, N.J., and the Albany, N.Y., metro area.

Cooking schools instituted at selected locations, and expanded fresh food demonstrations and sampling programs.

The addition of a prime rib dinner to a holiday meal program that has been relying on ham and turkey dinners.

Grand Union's plans were described in some detail by William Louttit, executive vice president and chief financial officer, speaking to the Wall Street investment community at the food retailing conference organized earlier this month by Donaldson, Lufkin & Jenrette, a New York-based securities firm.

Grand Union's plan is a straightforward attempt to hitch its wagon to the takeout trend.

"Takeout food consumption continues to expand," Louttit said, pointing to the success of such HMR chains as Golden, Colo.-based Boston Market.

"Supermarkets are in the

battle for the share of the stomach. We must provide consistent, good-tasting, ready-to-eat, ready-to-heat, ready-to-cook, real alternatives for today's consumer. If we don't, somebody else will," Louttit said.

He added that Grand Union's new strategic mission is also the fulfillment of a self-made prophecy, referring to the chain's long-standing slogan, "The Best Takeout Restaurant in Town," a tag for its hot food programs.

Indeed, he said, all fresh departments will deliver on that boast. "We'll take our takeout restaurant concept, in one way or another, to all our fresh departments," Louttit said.

For example, E-Z Meals, the meal program that the chain has been testing, will carry over from deli to in-store salad bars, with the focus on store-prepared products, he said.

"We'll be offering our great-tasting centrally produced soups from our own commissary. Our deli salad program will use our commissary-produced product plus store-assembled and store-made, fresh salads," Louttit continued.

Spareribs, produced in Grand Union's commissary, will join existing hot individual items such as Buffalo wings, fried chicken and rotisserie chicken. Delis will also offer commissary-prepared roast beef at a "carving board."

Louttit also said the meat department will offer value-added items. "Marinated, stuffed, however you like it," he said. Seafood departments will carry prepared items, including chowder and crab cakes, "such as you might get at your favorite restaurant." Produce's contribution will be cut melons and a fruit bar.

Two renovated stores, in West Nyack and Monroe, N.Y., will "showcase our grand new vision, in mid-March." Louttit said. "These renovations will be dramatic departures from our previous renovations."

The "E-Z Meals" ready-to-eat meal program currently includes a meat loaf dinner with carrots and mashed potatoes with gravy; a roast turkey breast dinner with stuffing, corn and mashed potatoes and gravy, and spaghetti and meat balls. All are priced at about $4, Louttit said.

The meals-for-two program will offer more complete meals, including rolls and other accoutrements, he said. Grand Union also boosted convenience features at its test sites, Louttit said. For example, it added checkout points in each deli and "super express" checkout lanes for five or less items at lunch and dinner time. The stores encourage customers to call or fax their orders ahead of time, so that the food will be ready for pick-up when they come in.

"In our food service, fast-in and fast-out is very important," Louttit said.

The whole test package has been successful, he told conference attendees. "This broad-front effort was launched in Bergen County and the [Albany] Capital District last November, and both overall sales and particularly perishables departments' sales have shown excellent improvement since the program was launched.

"Also, consumer research shows substantial improvement in the positive reception of the targeted departments and categories in both areas," said Louttit. A financial analyst who follows Grand Union's activities said the new focus on takeout will include advertising the concept more heavily chainwide, adding in-store signs and other promotional materials, and expanding the assortment of products.

Evidence of that is already appearing. In a full-page ad this month, Grand Union laid out its prepared food offerings like a menu.

The ad used "The Best Takeout Restaurant in Town" as its headline, while the rest of it was dominated by a list of foods under the word "Menu." The ad was divided into seven sections, with appropriate items listed: appetizers, soups, salads, entrees, E-Z meals, on the side and desserts.

The menu pulled all the fresh food department offerings together. For instance, cut fruit and melon bar and cooked shrimp shared space with Buffalo wings and baby back spareribs in the appetizer column. "Salad bar and many others" shared space in the salad column with seafood salad supreme and others that are offered from the deli service case.

Some of the items in the ad were offered at their regular price. The salad bar, for example, was listed at $2.99 a pound. The pizzas, however, had a special price of two for $6.

While Grand Union officials could not be reached for comment on the ad, a store-level source at a Bergen County unit said the pizza's regular price is $5.99 each. The source said E-Z Meals are regularly priced at $3.79. They were offered in the ad for $2.99 each.

Mesclun salad and freshly squeezed juice from the produce department, marinated chicken breast from the meat department, E-Z Meals in a three-compartment plate, and garlic and herb-roasted potatoes are some of the items that were spotlighted in the ad.