As rising commodity costs push up food prices, Pittsburgh's dominant grocer is launching a program meant to guarantee customers won't see hikes on certain items -- at least until after the holidays -- and perhaps keep them from straying to the competition.
O'Hara-based Giant Eagle today began pitching its "Low Price Lock" program, setting prices on more than 300 items ranging from chicken breasts to cornbread stuffing to flu shots.
The company says the prices on those items won't change at least through Jan. 2. But on Jan. 3, they're fair game.
The concept of locking down prices has been used by various grocery chains around the country, even as supermarkets face increased competition from discounters, dollar stores and drugstores.
In the Pittsburgh market, the Bottom Dollar Food limited assortment chain that's part of Belgium's Delhaize Group has been adding locations aggressively. But competition is also coming from Wal-Mart, Target, Shop'n Save, Aldi, Walgreens and other retailers.
Wal-Mart this year has been marketing directly to Giant Eagle's customers with commercials comparing receipts from the two retailers for similar items.
Giant Eagle is fighting back against the competition on a number of fronts.
Later this year, the company will bring its fledgling limited assortment chain, Valu King, to the region with a store on McKnight Road in Ross. The concept has been tested in smaller markets such as Johnstown and Erie.
In addition, a couple of weeks ago Giant Eagle began airing spots featuring customers talking about how they had saved thousands of dollars annually through its programs such as double coupons, loyalty card deals and gas discounts.
Consumers' focus on savings has not let up since the start of the Great Recession four years ago.
Even the economy and the jobs situation show signs of improvement, the U.S. Bureau of Labor Statistics reported in August that the consumer price index for the Pittsburgh area rose 4.3 percent between the first half of 2011 and the first six months of 2012. Food prices rose 4.5 percent, while energy costs were up 2.5 percent, the government agency reported.
Rob Borella, senior director, marketing for Giant Eagle, cited commodities such as corn, wheat, soybeans and energy as areas that have seen cost increases in recent years.
"These are uncertain times for us in terms of the costs we see from suppliers and uncertain times for customers in terms of the prices they see," Mr. Borella said. "This is an effort to take away that uncertainty."
Teresa F. Lindeman: firstname.lastname@example.org or 412-263-2018. First Published October 10, 2012 12:30 AM