THE LURE OF ALTERNATIVE FORMATS

SN: Are nontraditional retail formats -- like supercenters or club stores -- proving to be a strong draw to your customers? How do you convince customers to stick with you? STEINBACH: We need to keep doing what we are doing and stressing that we are food experts. We need to keep our stores focused on food and on offering food solutions that consumers can't get at other formats, such as meal-planning, recipes, nutritional information, quality and variety. With all that, consumers will stick with you. OMERNICK: We stress service and one-stop shopping, which are major factors in competing with formats that offer more limited selections. And continuing to offer our customers this kind of extra service will allow us to differentiate ourselves from the alternative competition. NOWAK: We introduced Plus Cards a year ago to offer special savings and to encourage customers to continue to shop with us. The cards are also good at other businesses, and we hope some customer loyalty is holding. SCROGGINS: Many people shop at club and warehouse stores periodically, but not every week because of the shopping time and the total ticket. I expect shoppers will continue to shop those stores occasionally and do fill-in shopping at their local supermarket. We can't keep them out of those larger stores because many consumers see it as an experience -- almost as entertainment. CROWLEY: Many supermarkets are fighting back by offering larger packages and telling customers they don't have to buy a caseload to get the lowest price. MATHEWS: To compete with club stores, we've offered "super deals" for the past five years -- large sizes in a single aisle. We list the savings over the regular price, and the unit price, and we've been very aggressive in this area. Until recently, we featured 40 new items every two weeks. We now feature 40 new items weekly. In addition, we offer produce, salad bars, service delis and 500 items in the Nature's Choice line of natural, organic groceries and frozen foods, which differentiate us from alternative formats. MOORE: There's talk of rezoning an area in the South Bronx to allow a 100,000-square-foot warehouse club to open, and that could have a major impact on us. Our customers are mostly walk-in trade, and we're not sure how many would be able to drive to a warehouse store. But we offer good prices and better service, and the prospects of a warehouse store opening are very remote at this time. HOSEY: We provide service, variety of sizes and coupons -- even double coupons -- that alternative formats don't. It's still a different segment that shops both kinds of stores, and we're meeting the needs of that segment with larger sizes, which has brought some of that business back. Plus we offer banks, money orders, lottery tickets and other services. Our new slogan says it all: "Everything you need, just the way you like it."