COMPETITIVE WATCH

Press enter to search
Close search
Open Menu

COMPETITIVE WATCH

10/22/2008
NEW YORK -- Supermarkets and mass merchants continue to target c-store customers as supermarket chains are beefing up prepared meal offerings, while Super 1 Foods is extending its gas promotions.

In hopes of capturing a larger share of dollars spent on food, taking direct aim at consumers cutting back their visits to restaurants, supermarkets are now offering "restaurant quality" meals on the go, according to a Dow Jones report.

Chains such as Kroger Co. and other value-oriented grocers may pick up a greater share of food dollars from restaurants, and in some cases c-stores. Supervalu Inc. and Safeway Inc. are also introducing new prepared food lines as they also lower prices in their stores, the report stated.

"There's likely to be real winners and losers," said Scott Mushkin, an analyst covering food retailers at Jefferies & Co. in the Dow Jones report. "The bigger beneficiaries are the ones that have pricing right on their Cheerios, but also offer home meal replacement" at the right price.

Supervalu last month completed the rollout of a private-label line of prepared foods, frozen pizzas and other products to its nearly 2,500 stores nationwide, while Safeway expanded its own prepared food line to more than 50 stores, up from an initial test market of a dozen.

Additionally, Kroger is moving to make its prepared food easier and more convenient to buy and eat by installing bistros at 12 of its stores where customers can take a break from shopping and eat deli sandwiches, sushi or other prepared foods, according to the Dow Jones report. And the company plans to double that number by early February, a company spokeswoman said.

Whole Foods Market Inc. also has over the past year offered more prepared meals for two and four people, placing several courses in a brown bag for shoppers to pick up and go, said Whole Foods co-president,, Walter Robb, in the report. The natural grocer has also made more selections of its private-label sandwiches and salads available.

Supermarkets don't break out sales of prepared foods, but it represents a growing fraction of the $950 billion Americans spend on food a year. According to the International Dairy-Deli-Bakery Association, grocery stores sold more than $6.2 billion of prepared foods during the year ended in March.

In its recently released report on eating trends, NPD Group reported consumers bought 6.3 percent of their take-out dinners at grocery stores in 2007, compared with 5 percent in 2003.


In other competitive channel news, Super 1 Foods is extending its "Got Gas?" promotion for an "indefinite" period, which allows customers to save 5 percent on their total grocery bill when they spend $35 in one Super 1 Foods fuel transaction.

The company said that the decision was based on strong consumer response to the initial program rollout.

Furthermore, in an effort to target small and single-store owners, Sam's Club is selling snack foods in pre-packed point-of-purchase displays, according to an In-Store Marketing Institute report.

Pallets holding retail-ready units of snack and confectionery products receive endcap and in-line placement in packaged foods aisles, and carry fundraising packages, counter displays and flexible displays that can be used as either power wings or countertop units from Mars Inc., Hershey Co. and other product manufacturers, the report stated.