Budgets and Food Shopping:

Is the supermarket industry recession-proof? People have to eat and supermarkets feature the best deals on food items. Or so say many industry insiders. Yet, a distinct trend in trading down, in seeking out lower-priced grocery brands, has been noted in the last year or so. Some chains, especially those with their own store brands, are capitalizing on the trend, while others are offering more coupons and special promotions to keep their newly cost-conscious customers coming back each week. Consolidation in the industry, leading to chains with hundreds, even thousands of branches and huge truck-dependent distribution systems, has enabled a focus on value pricing and given a substantial competitive edge to large neighborhood and regional stores. Smaller mom-and-pop operations and convenience stores still attract loyal customers, as well as travelers and one-item shoppers; but most cannot afford loss-leaders, offer double coupons, or stock value brands. Restaurants too may lose out as more people choose to dine at home rather than enjoy relatively expensive meals in town. Some big grocery stores are stepping up marketing plans for their departments which provide fully cooked meals, deli sandwiches, or salad bars.

Wal-Mart Supercenters, large-scale department stores including a full-size grocery section, may be the obvious beneficiary in these hard times. But others, including nationwide chains run by Kroger and Safeway, are also faring well in the current economic climate. Smaller regional operations, like Food Lion, Hannaford Bros., and Price Chopper, are noting sales gains too. These stores are not just relying on cheap prices. Among the newer marketing campaigns are nutritional programs featuring targeted items and on-shelf markings highlighting the healthiest offerings, with examples available at Safeway and Hannaford outlets. Price Chopper, with headquarters in Rotterdam NY, takes part in a fuel- discount program in partnership with local gas stations in New England and Upstate New York. North Carolina-based Food Lion has a $10-dinner deal for families as well as assorted weekly specials. Wal-Mart, based in Bentonville, Arkansas, showcases its best deals on its website, where recipe tips, menu planning, and nutrition information are on tap for thousands of grocery products. Consumers who are concerned about healthy eating, looking for money-saving plans like gas-station tie-ins, or who make lists and plan out weekly meals before going shopping are paying attention to these marketing efforts and other shopper-oriented programs.

Although fuel prices have recently declined from unprecedented highs this past autumn, it is unlikely that the new frugality stimulated by the necessity to cut back on driving will soon go away. Finding everything you need in one trip remains a strong goal for many, especially those whose income has been greatly affected, and not just by fuel costs, in this unanticipated recession. Supermarkets offering everything from food staples to photo-processing to in-store pharmacy services are likely to become important destinations for weekend and mid-week errands. Even comparatively affluent shoppers have discovered that checking out lower-priced brands in supermarkets is worth the time and effort. Word is that the famous Depression-era staple, Spam, could make a come back!

Melinda Peer, "Sneak Peek 2009: Food Markets", Forbes

"Price Chopper, Sunoco Expand Fuel AdvantEdge in Northeast", Convenience Store News

"Supermarkets by the numbers", Grocery Headquarters/AccessMyLibrary

Al Heller, "E-Connections", Supermarket News/Goliath