THE PRICE EQUATION

SN: How important is price in the consumer's value equation? How will consumers' expectations affect the way you price your stores? SCROGGINS: Price is a factor, though no longer an overriding factor for most shoppers. Location, ease of shopping, comfort with the store, trust in the store and the quality of its products are all more important to consumers.

TEINBACH: Customers like excitement, promotions and sweepstakes. They want food expertise, product information and preparation information. And they want not only value but also quality and shopping convenience.

So, ideally, you need a mix of EDLP and high-low pricing -- EDLP to assure consumers they're getting quality at a good value every day, and high-low for shopping excitement. OMERNICK: Price is always a factor, but it's just one part of the value equation that also includes location, cleanliness, variety and quality. We're not an EDLP operator, and we can't be out in left field on price. But we try to offer more service, more variety and exceptionally clean stores. The consumer is willing to pay a little more to get some of these extras. MATHEWS: Price is important, but so is value, which includes good-quality products, good service for the price, cleanliness and one-stop-shopping convenience.

We use a high-low pricing strategy, and people judge our value on the basis that, although an item may be cheaper elsewhere, does that other store offer the other items you want, is it as clean, and is the service as good? CROWLEY: Consumers are more interested in nutrition, wholesomeness, friendly employees and store cleanliness than price. There are reasons other than price to select a supermarket, although there will always be people who will shop mainly for sales. HOSEY: People are looking for value, which is a formula for price plus convenience versus price alone. It's not something people calculate by putting it down on paper for each decision, but they constantly make trade-offs.

Each value decision is based on different sets of criteria. Price will always be in the top three to five things consumers look for, but location is still No. 1, with other top criteria being cleanliness, friendly employees, service and quality.

McEWAN: Price in the U.S. will always be a key issue. But if you don't deliver quality goods at a good value, then customers get concerned, because they want satisfaction for the price. The ratio that "quality plus price equals value" has changed, and we have to deliver products at the price consumers are looking for.

GERLAND: Houston is a very competitive market, so price is important, especially for people on limited incomes.