SUPERCENTER STRATEGY

MARYELLEN LO BOSCO

KINGSTON, N.Y. -- Wal-Mart's new supercenter here is betting that price and convenience will lure shoppers into its full-service supermarket and away from the competition.

When SN visited the new Kingston unit here, which opened Jan. 27, four grocery carts were on display in front of the Food Center. The display compared prices for a full load of groceries at Wal-Mart to similar items at ShopRite, Super Kmart and Hannaford Bros. The price tags for the orders during SN's visit ranged from $80.78 at Wal-Mart to $105.35 at ShopRite.

Jay Kinsel, food co-manager for the Kingston unit, told SN that the best way for his supermarket to compete is to have the lowest prices.

According to a source at Wal-Mart's headquarters in Bentonville, Ark., the new Kingston store is the seventh supercenter to be opened in New York state. A recent news release from the company announced that it plans to open about 150 new supercenters this fiscal year, which begins this month.

The Food Center is clearly marked as such outside the 205,000-square-foot building. When shoppers enter to do their food shopping, they are welcomed by a Wal-Mart greeter, who hands them a store directory.

The supermarket entrance opens into the Fresh Market (produce and takeout deli/bakery). On the right perimeter is the meat and seafood shop and deli meat and cheeses. The back perimeter is reserved for the dairy.

Behind produce are 13 grocery aisles, which open on the right side to the perimeter departments and on the left to aisles merchandising nonfood items. Opposite grocery aisles 4 to 7 are aisles stocking household chemicals, where shoppers can buy cleaning supplies and laundry detergents. Thus, these aisles are used as an extension of Center Store, although they are part of the nonfood section.

Each of the 13 grocery aisles is 80 feet long. Additional grocery items are merchandised on huge floor displays in the middle of the traffic aisle separating the supermarket from Wal-Mart's other retail aisles. For example, merchandised on the floor during SN's visit were Lay's potato chips, Sun detergent and Great Value private-label bleach, as well as tissue, cookies, juice, cake mix, spring water, Great Value canned vegetables and Kellogg's Rice Krispies.

The first two aisles in the grocery lineup are devoted to frozen food, as are two additional 32-foot-long bunkers adjacent to grocery but situated in the meat department.

Endcaps on the frozen aisles showcased a number of multiple-buy specials during SN's visit. For example, Great Value private-label brand strawberries were on sale at four 16-ounce packages for $5. Additional private-label items were also on sale: 32-ounce packages of cut broccoli, sweet peas, mixed vegetables and whole kernel corn, two for $3; 32-ounce bags of frozen potato varieties, four for $5; and breaded fish sticks, 41 ounces at two for $5.

Frozen food, except for the meat, is entirely in doors, including the specials displayed in three-door endcaps. At the beginning and end of each aisle, Wal-Mart provides a display of stacked freezer bags as a convenience to customers and offers to replace any items that do not stay frozen for 45 minutes.

SN noted a number of private-label items in the frozen-food department, including waffles, pot pies, family sizes of lasagna with meat sauce, and ice cream. Throughout the frozens department, as well as in the dry grocery aisles, signage proclaims Wal-Mart's low prices. For example, in the frozens department, pricing signage on top of the endcaps has an additional claim that says: "We'll Match It! Any Competitor's Ad!" Large signs with the same slogan also hang in the grocery aisles.

Packaged goods begin with aisle 3, with cookies and crackers on one side and bread on the other. The next aisle has coffee, cocoa, peanut butter and jelly, as well as salad dressings and condiments, and jars of pickles, olives and similar products. SN noted Great Value private-label peanut butter in this aisle, as well as private-label olives packed in Spain.

Aisle 5 is devoted to pasta and pasta sauces, as well as international foods. During SN's visit, Great Value tomato puree retailed for 68 cents for a 29-ounce can, compared with 78 cents for Tuttoroso brand and 82 cents for Cento brand.

In addition to some imported pastas, Italian condiments, and Asian and Mexican items , this aisle also stocked 16 feet of Goya products.

There are also 8 feet of kosher products in this aisle, 20 feet of additional rices and 8 feet of canned beans from various manufacturers. Private-label offerings included 10 stockkeeping units of Great Value bagged beans.

Institutional sizes can be found in aisle 6, along with canned vegetables, tuna fish, sauce mixes, canned pasta, boxed dinners, canned soup and ramen. SN counted eight SKUs of private-label canned vegetables on this aisle, including asparagus spears, and five SKUs of canned macaroni products.

Seasonal specials are earmarked for half of aisle 7, with the other side devoted to juices. During SN's visit the seasonal aisle was stocked with St. Valentine's Day candy and teddy bears and other Valentine's nonfood merchandise. Great Value products can be found in the canned fruit and vegetable juice and boxed juice categories.

Aisle 8 houses baking supplies, canned fruits, oils and spices. Great Value pure olive oil retailed at two for $5 for 17-ounce sizes, compared with Flora pure olive oil at $3.58 for one 17-ounce bottle.

The next aisle is devoted to cereal and other breakfast items, with Great Value ready-to-eat cereal SKUs integrated alongside national-brand counterparts.

Baby food, formula, diapers and baby juices share an aisle with bath tissue. Aisle 11 houses additional paper products, while aisle 12 is devoted to water and salty snacks.

Beer and soft drinks are available on aisle 13, along with Sam's Choice sodas and other soft drinks.