Local News

Supermarkets Strive to Bag Your Business

Posted November 21, 1999

— Going to the supermarket in the Triangle is not what it used to be. There are more stores...more space...more service. And more sales gimmicks. Competition for your money is fierce.

Across the Triangle, spacious supermarkets are trying to be all things to all people. Increased competition and all the grocery mergers written about inThe Wall Street Journalare having an impact on the places we shop.

Mostly it has been a good impact, bringing lower prices and more customer service.

But you have to wonder why companies stay in the grocery business with its low profit margins and high customer demands.

The customers have definite opinions on what appeals to them. "You know, as Americans we want to get in and out real quick," one customer says.

Another shopper says that "the atmosphere in the store means a whole lot."

And of course just about every customer would cite pricing as a key ingredient in where they go for the family groceries.

Growing markets like the Triangle bring supermarkets their best opportunity to gain new customers. That is why potential customers are seeing so many creative approaches to getting the business.

"How much more innovative can we get?" one customer wonders.

Tom Robinson of Food Lion says if it seems like the chain has a store every mile, you are right.

"And as Raleigh continues to grow, and as neighborhoods are springing up everywhere, we're trying to put stores close to folks so we can be convenient," Robinson said.

Food Lion practically lifted up one store and moved it a few feet during one makeover. The chain used to update its stores every seven years. Now it is every five.

Lowe's Foods hopes it will stand out by going high-tech. Now you can order your groceries on the Internet.

Lowe's packs them up, and you pick them up.

Lowe's Chief Executive Officer Margaret Urquhardt figures store prices are roughly the same, so service is where her stores want to stand out.

"What's become very clear is you can't be everything to everybody. And you have to pick your spot," Urquhardt said.

So, thanks to the grocery wars, we are seeing bigger and better stores, and more of them. But for some people, it all comes down to price.

With that in mind, each chain is firing away with different ways to save you money -- double coupons, triple coupons, store brands and the latest trend -- loyalty cards.

"It's a game. It's a gimmick played by the supermarket chains," according to Ken Gassman.

Gassman, a retail analyst, says the cards can save you money, but he does not recommend switching supermarkets just for a loyalty card.

"If you are asking me if you will save money in Food Lion versus, say, a Kroger or something like that, then it becomes a murkier situation," Gassman said. "Because Kroger will bring -- because it doesn't have a loyalty card yet -- will bring all of its prices down often to Food Lion's 'MVP' price."

In the past couple weeks, however, Kroger has introduced its own savings card.

But some wonder if competitive pricing might be in jeopardy as one chain conquers and takes over another.

Experts say you need not worry.

"I don't think our competitors will allow us to take prices up, because if we do customers will notice," Robinson said.

"Let's say the Raleigh market consolidates to only two or three players," Gassman hypothesizes. "There always is an opportunity for somebody out there who thinks he or she can come into the market and gain market share with lower prices."

In fact, instead of fewer supermarket chains in the Triangle, we may soon see more.

Among the chains apparently checking out this area are Illinois-based Aldi, Bi-Lo, and Publix, a tremendously popular chain based in Florida. Several years ago Publix was ranked the most popular grocery chain in the country.

See you in the check-out line. And do not forget your coupons.


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