Giant Eagle reduces again as customers seek value


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Giant Eagle continues to go hard after its value reputation, unveiling a second round of price reductions on top-selling items in its stores Thursday -- not to be confused with its shorter-term "low price locks" on seasonal items.

If it sounds like more of the same, that may be because it's been the grocery industry story of the past few years. Customers are researching their options more, making trips to different stores based on their deals and generally stretching those dollars every which way.

A survey earlier this year found 75 percent of shoppers reported being more sensitive to price, up from 70 percent last year. And 42 percent felt their purchasing power had dropped over the past 12 months, according to Parago, a Lewisville, Texas, agency that polled 1,100 people in March.

Before shopping, 80 percent of consumers hunt for deals, rebates and the best prices, compared to 69 percent last year, the survey found.

"We're trying to get to the right price," said John Tedesco, Giant Eagle's senior vice president of merchandising. Specifically, this time around the O'Hara grocer is promising $40 million in annual customer savings with lower prices on more than 2,000 items such as fresh chicken, carrots, oatmeal, Campbell's chicken noodle soup, Kraft Velveeta & Shells and Nissin ramen noodles.

Mr. Tedesco said the price cuts, averaging 10 percent, were targeted to items that Nielsen research showed were bought frequently by customers.

Finding ways to make those cuts included seeking out unnecessary costs and looking at work processes. Mr. Tedesco offered the example of the chain's decision to make produce deliveries seven days a week to all stores, something that has meant less lost money on spoiled product and also increased sales because produce is fresher.

He said the company has seen increased market share as a result of its efforts.

Giant Eagle earlier this year tinkered with its fuelperks program.

It has stuck with doubling coupons up to 99 cents -- although Mr. Tedesco said that is becoming less important to customers -- and reintroduced a free antibiotics offering ended earlier this year. The offer restarted Sept. 5 and is good through February.

In recent weeks, Cincinnati, Ohio-based grocer Kroger has been the subject of numerous reports as it ends double coupon offerings in various markets, a step that Michigan-based grocer Meijer also took. Both compete with Giant Eagle in Ohio.

Rochester, N.Y.-based grocery chain Wegmans this month said it was ending a seasonal price freeze that launched in 2008 at the beginning of the economic downturn. "We've decided to ... focus on our basic philosophy of consistent prices all the time on items families use most...,," wrote Mary Ellen Burris, senior vice president of consumer affairs, in the company's blog.

businessnews

Teresa F. Lindeman: tlindeman@post-gazette.com or at 412-263-2018. First Published September 13, 2013 4:00 AM


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