New Supermarket Tie-Ins Embrace Consumer Priorities

Anyone who travels on the retail conference circuit has heard countless speakers urge supermarkets to get out in front of major consumer trends. Some have accused retailers of reacting too slowly or failing to be on the cutting edge of what matters to customers.

Those arguments are getting harder to make because supermarkets are stepping up to the plate with new, timely initiatives that respond to the economy, sustainability and health, among other areas — all key topics on consumer priority lists.

Kroger scored a coup earlier this month by unveiling a promotion timed to coincide with the issuing of tax rebate checks by the government as part of its economic stimulus package. The retailer will add 10% to the value of a Kroger gift card bought with a rebate check or tax refund check. Kroger was the first major supermarket to announce a refund-related program, although Supervalu said it was also planning one. Analysts said Kroger's initiative could underscore its value perception and attract consumer spending that might have gone to alternative formats. If those aims are achieved, Kroger may have hit upon the most important new supermarket promotional opportunity of the year.

Another supermarket tie-in, Earth Day, became a vehicle for a wide range of grocers this month. Supermarkets big and small jumped on the April 22 event to launch new environmental programs and broadcast their sustainability activities, as outlined in last week's SN. Many retailers used the occasion to promote reusable shopping bags or, in the case of Whole Foods, to discontinue use of plastic bags. Kroger created an online contest for consumers to design their own reusable bags and vote on the best submissions, with gift cards as the prizes. Ahold's Giant of Carlisle chain developed a program to convert returned plastic grocery bags into park benches, certainly one of the more unusual efforts. All the activity means retailers should succeed in communicating their sustainability moves to a consumer base seemingly more interested in this topic.

Meanwhile, retailers continue to find new ways to respond to the health and wellness trend, which shows no signs of abating. Retailer initiatives vary widely in approach and timing, but barely a day goes by when new promotions aren't launched. Among the latest ones, Bellingham, Wash.-based Haggen has partnered with the Safe Harbor program to offer seafood that's been carefully monitored and certified for mercury levels. A number of retailers are offering frozen, fortified and allergen-free baby food (see story, Page 38). And supermarket rival FreshDirect, an online food retailer, recently cited strong sales gains in a partnership with the Healthy Monday Movement, a program that targets Mondays for relaying health messages to consumers.

Supermarkets should be credited for robustly responding to consumer trends, but strangely, a word of caution is also in order. Retail reactions need to be closely linked to expected outlooks for each trend. If a reaction seems excessive, it probably is. Just think back to the industry's overwhelming marshaling of resources for the low-carb phenomenon, which eventually fizzled.