Stores compete for business with price lock and price match options
January 10, 2013 10:00 AM
Lori Mitchell of Cecil talks with Samantha Masters, a registered dietitian and wellness coach for Giant Eagle, at the McMurray Giant Eagle.
By Teresa F. Lindeman Pittsburgh Post-Gazette
Giant Eagle's promotion promising to "lock" prices on certain items -- which was introduced last October -- has resonated with consumers enough that the O'Hara grocer plans to try another round.
The company's weekly fliers touting its new Winter Low Price Lock showed up in Pittsburgh-area homes Tuesday, the same day that discount retailer Target announced plans to extend a holiday price match program for the entire year.
Whether it's the uncertain economy that has customers fixated on finding the best deals or the intensely competitive marketplace in which shoppers have plenty of options, the new year looks like another value-focused one.
Target's price match option gained attention in part because it applies not only to bricks-and-mortar competitors' offers but also to deals found on Amazon.com, Walmart.com, Bestbuy.com and Toysrus.com, as well as its own website.
"Guests can confidently shop at Target every day for the best value in retail," said Gregg Steinhafel -- Target's chairman, president and CEO -- in the official announcement. "We know that our guests often compare prices online."
Target is selling a lot more food than it used to, just one of the retailers that have made the business more competitive for traditional supermarkets such as Shop 'n Save, Foodland and Giant Eagle. Places selling groceries now include discount chains like Wal-Mart and Target; limited assortment grocery stores such as Bottom Dollar, Aldi and Save-A-Lot; warehouse clubs; and even dollar stores and drugstores.
"We have folks that we didn't have here five years ago in our market, but that's nothing new," said Rob Borella, senior director of corporate communications at Giant Eagle.
The grocer brought its own low-price, limited assortment chain to the Pittsburgh market with the November opening of its Good Cents Grocery + More location on McKnight Road in Ross.
Meanwhile, the price lock strategy has been used by grocers around the country as a competitive tool. Just last week Weis Markets, based in Sunbury, Pa., announced its 10th round of price freezes, locking down the price of more than 2,000 items for 90 days.
Giant Eagle's first round of price locks officially was set to end Jan. 2. This time around, the company said it will guarantee prices on locked items won't change at least until spring, although the grocer isn't giving a specific cutoff date.
Mr. Borella said the campaign marks a "multimillion dollar investment."
The U.S. Department of Agriculture is projecting that food prices in 2013 will rise between 3 percent and 4 percent.
In the fall, Mr. Borella said, it was clear quickly that customers appreciated being able to budget better, knowing that prices on certain staples and seasonal items would hold. The company tracks calls, letters and emails from shoppers, as well as sales results.
If that response continues, he said Giant Eagle could use the price lock strategy in the future.
In the battle to hold onto market share, the grocer also is trying novel approaches.
Last week, Giant Eagle said it would start offering its Curbside Express shopping service at its Market District store in Pine, after a successful test last year in Robinson. Customers place orders online and then pick them up at the curb. Eventually, Mr. Borella said, more locations will get the service.