RALPHS HBC ADS PUSH FOR MULTIPLE PURCHASES

JOEL ELSON

COMPTON, Calif. -- Ralphs Grocery Co. here is promoting its store-brand Perfect Choice health and beauty care mix through full-page ads that tout a variation on the buy-one-get-one-free merchandising offer.

The hard-hitting ads are designed to stimulate multiple purchases and trial of the private label by encouraging shoppers to buy two of any of its store-brand HBC products to obtain a third item of the same kind free.

Although Ralph's declined to comment on the advertised promotion, local industry observers said offering shoppers a free HBC product when they buy two of an item is a savvy strategy.

"You'll see one free with the purchase of the first, but offering a free product when shoppers buy two of the same item isn't usually done in private label," said a local Ralphs competitor, who asked not to be identified.

In the ads, Ralphs tells shoppers "to stock up and save on health and beauty care" items from among the 200-item Perfect Choice HBC mix.

"Ralphs is getting the shopper to buy two products at full price, and even with giving the third free the chain is able to do it a little easier. Most private label has a better margin than national brands. By doing it as a buy-two and get-one-free, Ralphs probably isn't giving as much margin away as it would in promoting a buy-one-get-one-free deal of a national brand," said the competitor.

Promoting private-label HBC with a buy-two and get the third product free deal "also gets product out in the customers' hands," he said.

Another retailer, who wished

to remain anonymous, said of the promotion: "It's an unusual approach, but a good strategy anyway. Ralphs forces the customer to buy two private-label HBC items in order to get the third one free. It's a good way to get the product out in the market and get people to try the store brand choice. If they like it, they'll come for it back again."

The retailer added, however, "I much prefer staying with the traditional buy-one, get the second free. It's less confusing."

The local retailer lauded Ralphs for its approach in highlighting its private-label HBC.

"Offering free private label when you buy two of the same product isn't something you see out there all the time.

But with private label you have the flexibility to do those kinds of programs. You can give away the free item, and with the margins in store brands you can still be ahead of the game," he said.

"Ralphs is trying to be creative, as we all are. It is a very good ad. Both Ralphs and Vons have been promoting their private-brand HBC and general merchandise quite aggressively. Ralphs, however, has been more creative, while Vons has been more consistent in promoting its private label with ads out there every week," commented the retailer.