One Cheap Chick: Grocers scramble as shoppers fixate on price

By LESLEY MITCHELL

The Salt Lake Tribune

Published: June 16, 2012 11:08PM
Updated: June 16, 2012 11:09PM
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Lesley Mitchell

Three years after the official end to the Great Recession, grocery stores are still contending with consumers who are hungry for bargains, prompting even the more-upscale food outlets to change the way they do business.

Customers are reaping the benefits because of super-low sale prices on basic food items, price cuts on some higher-end foods and even shorter waits in the checkout line.

Grocery chain Harmons, which has for much of the downturn avoided competing on price, has in recent months stepped up its sales on the basics and offers a different one-day deal each day — a deep price cut on a specific item such as fresh tomatoes and bottled water. Harmons also features a “price lock” on a selection of items for four weeks at a time.

The chain is still emphasizing its lineup of fresh foods, local produce, artisan breads, gourmet cheeses and a large selection of delicatessen foods, including made-from-scratch meals designed to appeal to busy families that don’t have much time to spare.

In other efforts, discount grocer WinCo Foods is responding to the continued focus on price by casting its net wider — even sending its sales ads and in-store coupons to Utahns who don’t live near one of its stores. Residents of North Salt Lake, for example, get WinCo coupons and sale fliers, even though the closest stores are either in Roy to the north or Midvale or West Valley to the south.

WinCo Foods entered the Utah market with an aggressive expansion plan, blanketing the Wasatch Front with five stores in 2009 and 2010, and looking at sites for more.

WinCo spokesman Mike Read said that early on in the economic downturn, in 2007 and 2008, discounters such as WinCo attracted a lot of new customers as shoppers “traded down” to more value-oriented retailers. But as the downturn has endured, much of the benefit it reaped has run its course.

These days, even as the economy is supposedly doing better, shoppers still are purchasing less expensive products — more “stomach fillers,” as Read describes them — but the market has become even more competitive, he said.

Read says the company is still growing — it recently added new stores in Nevada, Arizona, California and Washington.

But in Utah, where it operates stores in Ogden, Roy, Midvale, West Valley and Orem, the company, well known for its conservative financial and growth strategy, has decided to hold off on new-store development until conditions improve. Even a Layton store in development has been put on hold.

“There is still opportunity for new stores, not only in Layton but along the Wasatch Front,” Read said. “We’re just moving more slowly than we originally anticipated.”

Part of that wait-and-see attitude probably is due to the increased efforts by Smith’s Food & Drug to be the go-to store for those on a budget. Last week, Smith’s offered basics such as grapes and apples for 99 cents a pound, and pasta for 69 cents a box. Each week, it has milk for $2.50 a gallon.

The company also has worked to cut checkout time and has rolled out numerous promotions designed for those who register their Fresh Values loyalty card online.

The latter, for example, can get periodic freebies, including a current offer in which an electronic coupon can be loaded onto a Fresh Values card for a free 2-liter bottle of Pepsi Next. To load, go to bit.ly/LzD3ft and click on “Select Coupon” and then on “Load Coupons to Card.” If you haven’t yet used e-coupons at Smith’s, you will need to first register your Fresh Values card and create an account. This takes only a few minutes, and you can start loading this coupon and others right away.

Customers who register cards also can play instant win games and earn free grocery items. The latest game, through June 23, allows shoppers to win 25 cents to $1 off any in-store purchase. Prizes are loaded onto the card and are easy to redeem at checkout. While you’re online, check out all the money-saving coupons that can be loaded on to your card.

Smith’s also has stepped up its bonuses for those who purchase certain amounts of a particular brand. For example, the grocer recently provided a $4 Catalina voucher — store credit good on a future purchase — for those who bought five packages of select Oscar Mayer products. Small packages of lunch meat were on sale for only $1 each.

Smith’s has also attracted attention by periodically offering super-low prices at its gas stations. In Farmington, recently, the grocer generated a line to fill up for regular unleaded priced at $3.12 — a price it offered only for one day. That price was available to anyone, although Smith’s also offers a discount fuel program, in which grocery customers who meet certain spending thresholds get a per-gallon discount at its fuel centers.

All the deals notwithstanding, there is only so much business to go around for grocery stores. And as each chain and independent steps up efforts to be more competitive, there have been some casualties. In March, Associated Food Stores announced it was closing its seventh corporate-owned store in two years in West Valley. The Fresh Market store was among 34 locations that struggling Albertsons sold to Associated Food in 2009 .

The Wasatch Front also is home to nearly a half dozen Super Target stores, which sell an array of groceries. In recent years, Target has increased its efforts to attract grocery shoppers to its super centers.

Target’s approach has been store coupons — loads of them. Each week, the retailer adds dozens to its online printing center at Target.com. They can be combined with manufacturer’s coupons for added savings and even provide a fairly regular way to get some free or nearly free grocery items.

Like Walmart, Target price-matches competitor’s advertised sale prices.

Even natural and organic foods grocers are adapting. Each month, Whole Foods offers money-saving printable coupons on its website, Wholefoodsmarket.com, and has placed greater emphasis on its value brand, 365 Everyday Value.

With Sunflower Farmers Market and Trader Joe’s touting bargains of their own, even Whole Foods can’t forget that consumers are more fixated on prices than ever.

Lesley Mitchell writes One Cheap Chick in daily blog form at blogs.sltrib.com/cheap.

lesley@sltrib.com

Facebook: Facebook.com/One Cheap Chick

Twitter: @cheapchick

Ways to save

Fresh Market • Each week, the grocer emails money-saving offers to those who have signed up for its e-Savings Club. Go to Freshmarketstores.com to sign up; click on “Join the Club” on the bottom right-hand side of the page.

Whole Foods • Printable coupons can be found at Wholefoodsmarket.com/coupons.

WinCo • Check Wincofoods.com/extra-savings/coupons before you shop for printable coupons and other offers.

Smith’s • If you shop at this Kroger affiliate, you can save money by registering your Fresh Values shopper card online. Once you do, you can load electronic coupons on a variety of items. These coupons are deducted from your total at checkout if you buy the required item(s).

Anywhere • Go to Coupons.com, SmartSource.com and Redplum.com to print out money-saving coupons. Each month, Utahns can print a coupon worth 75 cents off a gallon of any brand of milk at Coupons.com.