WALDBAUM'S FIRES LATEST ROUND IN PRICE WAR

JENNIFER L. BALJKO

CENTRAL ISLIP, N.Y. -- Waldbaum's here has fired the latest salvo in an escalating price war in New York's Long Island, where Edwards Super Food Stores last month converted 15 former Foodtown stores to its banner.

Earlier this month, Waldbaum's, a division of A&P, Montvale, N.J., rolled out an aggressive compare-and-save circular. The ad said, "If you shopped at Waldbaum's over the past four weeks with our Powerbuys, weekly specials [and] everyday low prices, you would have saved $187.31 vs. Edwards' best prices."

The circular's back page listed dozens of the best-selling advertised items, detailing how much each product cost at Waldbaum's and Edwards in four price comparisons conducted in late October and early November at three Edwards stores in Suffolk County.

The Waldbaum's circular is part of an intensive promotional campaign launched by the chain and A&P several months ago to spotlight their prices and quality, said Michael Rourke senior vice president of communications and corporate affairs at A&P. The marketing effort includes shelf tags, TV and radio commercials, frequent-shopper cards and weekly specials.

"Edwards has done price comparisons in the past, and Waldbaum's has been doing it for the last several months in the stores. The circulars are done periodically," Rourke said. "Long Island has always been competitive. The competitiveness is at a very high level, and that will continue."

A week before Thanksgiving, Edwards -- a Windsor Locks, Conn.-based chain owned by Ahold, Zaandam, the Netherlands -- distributed a circular picturing Long Island residents talking about how much they saved at Edwards. The Join Your Neighbors & Save More Money Every Day ad compared their total food bill at Edwards with the tally at Waldbaum's and the region's other leading chains, King Kullen, Westbury, N.Y., and Pathmark Stores, Woodbridge, N.J.

Edwards, an everyday-low-price operator, has used a low-price approach for several years, spokeswoman Tonya Lyon said. The latest advertising push is also part of an effort to alert consumers that the ex-Foodtown stores, formerly operated by Melmarkets, Garden City, N.Y., are now under the Edwards name, she said.

Mel's, known locally as a heady price competitor, was absorbed by Edwards when Ahold acquired Stop & Shop Cos., Quincy, Mass., in July. Stop & Shop had acquired Mel's last year.

"We do [price comparison] at all our stores," Lyon said. "Our advertising stance hasn't changed. But we have more stores on Long Island now, and by the nature of having more stores, it appears more intense." To support its EDLP strategy, Edwards also does in-store price comparison promotions and runs TV commercials, she added.

Spokesmen at King Kullen and Pathmark declined to comment. However, both chains already had uncorked aggressive promotions of their own.

Pathmark continues to plug its long-running "Shop Pathmark Smart" campaign in weekly circulars and TV spots, showcasing no-clip coupons, "Big Deals" bulk-item specials, multiple pricing and buy-one-get-one deals. In the spring, King Kullen kicked off its "Long Island's Family Supermarket/Keeping Your Food Dollars at Home" campaign -- an effort to counter Dutch-based Ahold's increased Long Island presence and to highlight the fact that Pathmark and Waldbaum's are run by New Jersey-based parents. It also implemented a checklist format in its circulars so customers could mark off price specials.

On Long Island, Waldbaum's is the market-share leader at 21%, followed by Pathmark (20%), King Kullen (17%) and now Edwards, which went from 5% to 15% in absorbing the Mel's stores.

With Edwards' fattened presence in a primarily high-low market, heated pricing battles are not surprising, because Edwards wants to lure new customers and the other chains want to keep market share, analysts told SN.

"It makes sense because [Edwards] just changed the banners and they have to make an impact," said Gary Giblen, managing director at Smith Barney, New York. "The people in Long Island are very price-oriented. It's part of the New York ethic, and price is a good lever to push."

According to Jonathan Ziegler, vice president at the San Francisco office of Salomon Bros., New York, "[Edwards] is calling attention to its EDLP and its competitors are going to respond. You'll get these two camps lined up. You'll have EDLP vs. high-low, and you'll see who is going to take share. There are customers that like high-low, and there are customers that like EDLP. There will be a natural progression of share there."