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U.S. cattle group fights recession with $5 steaks
By Bob Burgdorfer - Reuters
CHICAGO (Reuters) - As the recession discourages people from dining out, the U.S. beef industry is stepping up efforts to sell steaks
through supermarkets to compensate for a slowdown in restaurant business, NCBA economist Gregg Doud said on Monday.
"On the steak side, you are seeing a lot of features for rib-eyes and T-bones at below $5 a pound. That is some of the best featuring we
have seen in many many years," said Doud.
The NCBA is the nation's largest cattle industry trade group, and Doud said the feedyard segment of the industry, which fattens cattle on
grain, has lost about $4 billion in equity over the last 15 months.
The losses are due in part to high grain costs and a slowdown in beef sales in restaurants and export markets, which have prevented
cattle producers from getting the prices they need to cover costs.
In years past, about half of the U.S. beef has been consumed at restaurants and fast-food chains. But business is down in that segment as
cost-conscious consumers eat at home.
"We are really focusing right now on one aspect of our industry -- the retail side," said Doud. "You are seeing some of the best value in
grocery stores for steaks than what you have seen in an awfully long time."
The approaching of spring, when people begin grilling steaks and hamburgers outdoors, has also encouraged the NCBA to promote
steaks and other beef products in supermarkets at lower than normal prices.
This focus on retail sales is also being pushed because of a mild slowdown in beef exports, said Doud. A strong dollar relative to other
currencies has made beef more expensive to foreign buyers, which hurts sales.
While the low beef prices are designed to spark sales, they may be hurting cattle producers, who have been losing millions of dollars a
week as cattle are selling at well below production costs.
Current beef prices are "not profitable" for the long term but are necessary to sell beef, said Doud.
The losses on cattle have led to producers raising fewer cattle, which could be mean less beef in 2010 and beyond.
While a smaller beef supply could mean higher prices then, Doud was reluctant to forecast beef prices that far out because many factors
can affect prices, such as feed and fuel costs, weather conditions, and supplies of competing meats.
USDA estimates 2009 U.S. beef production at 26.477 billion lbs, down about 1 percent from 2008.
Wal-Mart Adds Store Brands to Lure Bargain Hunters
By Chris Burritt - Bloomberg
March 16 (Bloomberg) -- Wal-Mart Stores Inc. plans to start selling more than 80 new products, including strawberry yogurt and thin-crust
pizza, under its store brand to attract U.S. shoppers seeking lower prices.
Thirty percent of consumers are buying more private-label items than a year ago, Wal-Mart said today in a statement that announced a
revamping of its Great Value line of packaged food and household products. The company said it changed the formulas of 750 items,
including cereal, cookies, laundry detergent and paper towels, to improve quality. It also redesigned packaging.
Wal-Mart, the largest seller of groceries in the U.S., started distributing the products to stores this month. As the recession has deepened,
sales of less-expensive items have accelerated, said Andrea Thomas, senior vice president of private brands.
Wal-Mart customers “are looking at ways that they can still meet all the needs their families have,” Thomas, 44, said today in a telephone
interview. She joined Wal-Mart in 2007 from Hershey Co., the largest U.S. chocolate maker, where she was vice president of global
innovation.
The Great Value line has grown into the biggest U.S. food brand by sales since the Bentonville, Arkansas-based company introduced it in
1993. The new packaging will make it easier to spot Great Value items in stores, Wal-Mart said.
Brand Competition
The brand covers more than 100 categories. According to an estimate by Robert Drbul, a Barclays Capital analyst in New York, Great
Value generates about 10 percent of the chain’s food sales with the remainder coming from manufacturers such as Kraft Foods Inc.,
Kellogg Co. and Campbell Soup Co.
“It is important for us to have all the choices our customers are looking for,” Thomas said. She wouldn’t disclose Wal-Mart’s percentage of
sales from store brands.
Kroger Co., the biggest U.S. chain specializing in groceries, has seen a boom in store-brand sales. While total revenue was little changed
at $17.3 billion last quarter, store brands accounted for a record 35 percent of unit sales.
Three out of 10 consumers in a new study by New York-based Gfk Custom Research North America are buying more store brands
compared with a year ago, Wal-Mart said. Economic conditions are playing a “big role” in decisions to buy national or private- label brands,
the retailer said.
Wal-Mart fell 39 cents to $48.80 at 4 p.m. in New York Stock Exchange composite trading. The shares have dropped 13 percent this year.
JoS. A. Bank Free Suit Offer Made for Tough Times
By George Anderson - Retail Wire
JoS. A. Bank has the promotion for you if you're among those trying to put your best look forward at work or if you're interviewing for a new
job. The company's new "$199 Sale" comes with a unique guarantee. If you buy a suit from the retailer and subsequently lose your job, the
chain will refund your purchase price and let you keep the suit on top of it.
R. Neal Black, CEO of the men's clothing retailer, said in a press release, "We understand the uncertainty everyone is facing. We want to
help the customer look good at work, and if he loses his job, to be dressed appropriately as he meets with his next employer. It's like giving
all of our customers a bit of unemployment insurance."
The special promotion applies to any suit or suit jacket/pants combination purchased from March 16 through April 9, 2009. If the customer
involuntarily loses his job between April 16 and July 1, JoS. A. Bank will refund the price paid for the suit, up to a maximum of $199. The
company will require documentation of a job loss to evaluate any refund requests.
Target's Grocery Problems
By Tom Ryan - Retail Wire
According to an article in Pioneer Press of St. Paul, MN, Target is losing market share to Wal-Mart partly due to its weak position in
groceries. The core problems are the discounter's lingering perception as an apparel retailer as well as its higher food prices.
"People will pay more to buy the on-trend item," Britt Beemer, founder of America's Research Group, told the newspaper. "The trouble is
when you're selling groceries, there's no on-trend groceries. You're either cheap or expensive."
With consumers focusing more on basics, groceries have become a more critical traffic driver. Mr. Beemer estimates that Target has lost
15 percent of their shoppers over the last year or so, and "Wal-Mart got the biggest share of them, particularly on the grocery side."
While grocery and health sales were cited as the biggest sellers, comps fell 4.1 percent at Target during February. Wal-Mart's comps
jumped 5.1 percent in the month.
Of course, Wal-Mart is gaining market share against all grocers. In the Twin Cities market, Wal-Mart is close to pulling ahead of Rainbow
Foods to become the second biggest grocer behind Cub Foods, according to David Livingston, principal with DJL Research and RetailWire
BrainTrust panelist.
But one hurdle for Target, according to Mr. Livingston, is that it can't carry the same selection as Walmart Supercenters because its
groceries aren't moving as fast. A typical SuperTarget does half the grocery sales of a comparable Walmart Supercenter, estimates Mr.
Livingston.
"Target is going to have a much a more difficult time in their meat and produce departments because they're lower-volume stores," he said.
Bob Kowalski, a former executive for the Kowalski's grocery chain, has noticed under-stocks at his nearby SuperTarget.
"They've definitely gone downhill," he said. "There's all kinds of holes on the shelf. It's 30 percent less full than they used to be. Nothing is
worse for a perishables presence than not having it full."
Mr. Kowalski, now the owner of Sage Market and Wine Bar in Mendota Heights, MN, said a more sophisticated shelving system could help
disguise light produce departments that might be required because of slow sales.
But Mr. Livingston said that particularly outside the Twin Cities, Target is still battling the perception that it's unusual to buy groceries there.
"In most major markets outside of Minneapolis, they're a distant also-ran (for groceries)," he said.
Target doesn't compete head to head with Walmart on apparel. They cater to a more upscale demographic that shops the specialty retail
and department store circuit. They won that one with their "cheap chic." If they want to grow their grocery business, they need to pursue
the same shopper who buys their clothes; the more upscale shopper. If they want to be a grocer they should remember who their customer
is. They should become the discount Whole Foods/Central Market type, offering "cheap organics" and aggressively market it that way.
Right now the upscale grocery shopper is looking for a cheaper, yet quality alternative to the Whole Foods type grocers. Target could win
this one.
Marge Laney, President, Alert Technologies, Inc.
Lane Bryant Launches 3 Million Circ Catalog
Lane Bryant has launched a new retail catalog, which has been mailed to 3 million existing customers, according to marketing coordinator
Heather McGarry.
The new catalog will be “fashion forward,” McGarry said, and will focus on sizes 14-32. The company’s Lane Bryant Woman catalog, which
had concentrated on sizes 0-4X (on a different scale) hasn’t been sent out in several months, and will be shutting down, McGarry said.
The new catalog is 34 full-color pages, and measures 8 x 10 1/2 inches. It provides a new telephone number for orders and customer
service, and serves to generate online as well as retail orders. “No mail channel,” McGarry said. “We didn’t think that was an option. Going
online, or making a call, or going to a retail store is easier.”
Given the recession, recent closings in print houses and the additional cost associated with a traditional catalog, isn’t this a curious time to
launch a catalog?
“I think our customer is looking for it,” McGarry said. “They have received our direct mail pieces and postcards announcing our sales.” The
catalog, she said, offered a wider showcase for the new fashions.
Furthermore, the timing allows the retail chain to showcase new fashions. The average shopper makes purchases four times a year,
according to McGarry. The catalog is designed, in part, to spur sales among those who haven’t bought clothes in a while.
FTC and Whole Foods Settle: For What?
Commentary by George Anderson
In a poll conducted by RetailWire in June 2007, 80 percent of respondents said they believed the Federal Trade Commission (FTC) was
wrong in trying to block the merger of Whole Foods and Wild Oats. The basic argument against the FTC action was that it was taking too
narrow a view of what constituted competition in natural/organic foods and products business.
In July of the same year, a federal judge ruled that he would not prevent the deal between the two chains. At that time, 79 percent of those
responding to another RetailWire poll said the combined company would be somewhat or much stronger than as separate entities.
Consensus among respondents, however, was that Whole Foods would not have a huge advantage with many much larger grocery chains
including Walmart, Kroger, Safeway and others looking to grab share of the natural/organic market.
Nearly a year later, well after Whole Foods and Wild Oats were deep into the merger, the FTC was successful in getting a federal appeals
court to overturn the previous ruling and requiring the agency and retailer to go back to work something out or contest the case in the
courts.
Fast-forward to last week and Whole Foods and the FTC have reached an agreement that will require the grocery chain to divest 31 Wild
Oats stores (19 that have already been shuttered) in 12 states along with one store operating under the Whole Foods banner. In addition,
Whole Foods will need to relinquish the rights to the Wild Oats name, allowing it to be purchased by a potential competitor.
Safeway Adds waterfront BISTRO(TM) to its Family of Successful Private Label Brands
New Seafood Line Joins Previous Brands and Introduces Added Selections to Meet Shoppers' Needs for Restaurant-Quality Meals at Home
PLEASANTON, Calif.--(BUSINESS WIRE)--Mar. 10, 2009-- Safeway Inc. (NYSE:SWY) today introduced waterfront BISTRO™, a line of
nearly 30 seafood selections and prepared entrees that make preparing a restaurant-quality meal at home easy.
The waterfront BISTRO™ line, developed exclusively for Safeway, was created as a convenient, at-home version of a high-quality seafood
bistro experience, complete with recipes for creating everything from gourmet dinners to Sunday brunch fare.
“Now more than ever, people are dining at home, so they want to make the best of their ‘dining in’ experience with restaurant quality
meals,” said Matt Miller, Vice President of Consumer Brands. “waterfront BISTRO™ provides customers with countless combinations and
possible ways to stretch the household budget and discover the ease of making elegant seafood dishes, like Sockeye Salmon marinated
with a Garlic Lemon Pepper sauce, at home.”
waterfront BISTRO™ options range from heat-and-serve to simple preparation. Items like waterfront BISTRO™ Salmon Fillets, Raw Shrimp
and Wild Sea Scallops come with easy recipes to do-it-yourself entrees and appetizers. Pre-made entrees, such as Lemon Dijon Pacific
Salmon and Tuscan Roasted Pacific Cod, come marinated and are ready in minutes.
waterfront BISTRO™ selections can be found in the frozen food section in all Safeway, Vons, Pavilions, Tom Thumb, Randalls, Dominick’s,
Genuardi’s, Carrs and Pak ‘N Save stores. The line is the newest addition to Safeway’s popular family of private label brands, which
includes O Organics™, Eating Right™, Primo Taglio™, Signature Café™, Lucerne®, Rancher’s Reserve® and Safeway SELECT®.
ABOUT SAFEWAY www.Safeway.com
Safeway Inc. is a Fortune 100 company and one of the largest food and drug retailers in North America, based on sales. The company
operates 1,739 stores in the United States and western Canada and had annual sales of $44.1 billion in 2008. The company’s common
stock is traded on the New York Stock Exchange under the symbol SWY. Safeway supports a broad range of charitable and community
programs and in 2008 donated more than $248 million to important causes, such as cancer research, education, hunger relief and
programs focused on assisting people with disabilities. Safeway is also one of the largest retail purchasers of wind energy, using 57 million
kilowatt hours of wind energy, enough to power all 324 Safeway retail fuel stations, all stores in San Francisco, California and Boulder,
Colorado, as well as all of the company headquarters and all corporate offices in Northern California. Safeway was the first major retailer to
join the Chicago Climate Exchange, the world’s first and North America’s only legally binding GHG allowance trading system, and the
California Climate Action Registry, which commits the company to reduce its carbon footprint by 6 percent from year 2000 levels.
Source: Safeway Inc.
Safeway Inc.
Teena Massingill, 925-467-3810
Ahold Highlights
At the end of 2008, we operated 2,897 retail locations in the United States and Europe, employed more than 200,000 people and had
combined sales of €25.7 billion. In 2008, we made good progress with our strategy for sustainable profitable growth.
Highlights include:
Ahold
* Net sales of €25.7 billion, an increase of 6.9% at constant exchange rates;
* Operating income of €1.2 billion, up 12.2% or €130 million from 2007;
* Retail operating margin was 5.0%; underlying retail operating margin was also 5.0%;
* We repaid €1.1 billion of debt, reduced costs, and proposed a dividend for 2008 of €0.18, up 12.5% compared to last year’s dividend;
* We published our carbon footprint for the first time, along with goals for each component of our corporate responsibility strategy.
Ahold USA
* Stop & Shop/Giant-Landover completed its Value Improvement Program (VIP) and rebranded its stores;
* In the second half of the year, Giant-Landover delivered two quarters of positive identical sales growth, the first time it has had positive
identical sales since 2002;
* Giant-Carlisle continued its strong track record of continuous growth;
* Carl Schlicker moved from Giant-Carlisle to become President and CEO of Stop & Shop/Giant-Landover;
* Sander van der Laan moved from Albert Heijn to become President and CEO of Giant-Carlisle.
Ahold Europe
* Ahold divested its 73.2% stake in Schuitema;
* Albert Heijn opened or remodeled 95 stores;
* Etos opened its 500th store and was named “Best drugstore in the Netherlands”;
* Gall & Gall won the Dutch retail prize for food specialty stores of the year;
* Albert/Hypernova made further progress with the rebranding of its stores under the name Albert;
* Albert was voted “Supermarket of the Year” in the Czech Republic for the fourth year in a row.
Nordstrom Adjusts to New Realities
By George Anderson
We don't know if Mike Koppel, chief financial officer of Nordstrom, was a Boy Scout in a past life but he is certainly big on being prepared.
According to a Dow Jones Newswire report, Mr. Koppel told attendees of a Bank of America Merrill Lynch consumer conference that his
company was actively engaged in "scenario planning" to develop "contingency plans in case things get much worse."
Nordstrom, whom Mr. Koppel likened to a cross between a department store and specialty retailer, has made a number of adjustments
already, including bringing in and promoting lower price point items, tightening standards for holders of its credit card and pulling back on
expansion.
The move to some lower-price items was, according to Mr. Koppel, "some short-term aligning of our merchandising mix... more consistent
with what the customer is looking for today."
Nordstrom took this action after a holiday season in which it repeatedly engaged in markdowns to move merchandise. According to a
Seattle Times report, Nordstrom "had 10 times more markdowns" this past holiday season than the year before. In moving to merchandise
with lower prices, Nordstrom is hoping to avoid resorting to markdowns to turn its inventory.
While it faces challenges, as do other retailers, with their own credit card business, Nordstrom is not looking to sell. "We believe it
continues to be an important strategic component of how we build relationships with our customer," Mr. Koppel said.
How Big Are Those Price Cuts?
By Bernice Hurst, Managing Partner, Fine Food Network
Trumpets blaring out price cuts rarely say how much those prices have been cut. The number of items costing less per store is advertised
in total, not item by item. As long as overall shopping baskets cost less than the same items from a competitor, the boasts are legitimate.
But are they really transparent?
The Grocer is the oldest and most respected magazine for the U.K. grocery business. Each week its Grocer 33 shopping basket database
monitors several hundred items across twelve categories, showing readers how prices compare across the four main grocery retailers in
the country. As price wars rage, the magazine is seen as the place the trade can go to see how each chain measures up. But it is a trade
magazine, rarely if ever read by consumers who see little more than banners, ads and newspaper articles about "everyday" fair prices and
bargains because "every little bit helps."
Last week, The Grocer discovered that "more than half of the 5,000 price cuts promised by the supermarket group Asda are only worth a
penny an item." Furthermore, like everyone else, Asda has also raised prices and, of these, "fewer than one in 10 of those increased in
price rose by only a penny."
In announcing the price reductions on Feb. 26, Asda said with the additional 5,000 cuts planned by Easter, prices will be reduced on
12,500 items since the year's start. It also pledged not to engage in any deals or promotions that were not genuine price reductions. Chief
executive Andy Bond said at the time, "We're engaging with our customers in a transparent way to ensure the products we sell and the
prices we charge meet their needs in these difficult times."
Consultant Kay Staniland, of Assosia, responded by saying that, "Having reported last week that it was dropping bogofs [buy-one-get-one-
free] in favor of being transparent in its price cuts, such small cuts could be seen as simply trying to retain the cheapest title rather than
passing on any real savings to the consumer."
Confirming Ms. Staniland's statement while defending their policy, Asda's spokeswoman asserted that, "As the Grocer 33 shows, week in
week out we are the undisputed price leader." Admitting that price cuts of a penny are counted in the total, she also reaffirmed Asda's
position that they offer good value and claimed that further cuts will include "dozens of deep rollbacks."
Platt Retail Institute: It's Time for Retailers to Transform Their Stores
By Natt Fry, Retail Solutions Sales Leader, IBM
Through a special arrangement, presented here for discussion is an excerpt of a current article from the Platt Retail Institute Quarterly
Retail Analytics report.
The rapid growth of e-commerce sales, heightened consumer expectations for self-service, increased consumer time and budget
constraints, and new web-based, pervasive and analytical capabilities portend that now is the time for retailers to transform the store
shopping experience.
Why is e-commerce outpacing in-store retailing in sales growth and customer experience satisfaction?
1) E-commerce provides shopping advantages over in-store environments. It enables rapid product feature comparisons based on criteria
provided by the consumer. The store shopping experience is mostly dependent upon sales associates' knowledge and motivation to
provide consumers with similar product information. E-commerce provides superior product context via videos and 360-degree product
views. Price/feature comparisons allow consumers to rapidly "design" the "solution" that is best for their needs. Out-of-stock occurrences
are also much lower.
2) Consumers are becoming increasingly comfortable with self-service (web-based) capabilities. A typical day could include interacting with
self-service to obtain the price of an item in the store, buying groceries, filling the car with gas, getting cash at the ATM, checking in for
flights or hotel stays, purchasing stamps, ordering photos and assessing health conditions.
3) Consumers have great access to e-commerce and e-commerce capabilities at home and at work, but not at the store. The proliferation
of home-based and work-based broadband has enabled e-commerce providers to add more graphics-intensive features to their websites,
including the use of video to improve the value of product information and product context (selling "bundles").
4) E-commerce provides management advantages as compared to stores. Retail management is able to measure consumer behavior
during every step of the shopping process with e-commerce, including the conversion performance from entry, to search, to selection, to
checkout. Measuring conversion in a store environment is imprecise as it is dependent upon people-counting at the entrance, point-of-sale
data, and market basket analysis. Retailers are also able to quickly test alternative products, messages, promotions, and placement to
establish consumer reaction and sales performance results (A/B testing).
One of the simplest ways to bring the advantages of the web into the store will be to provide web access that is easy to find and easy to
use. Retailers will also find ways to enable rapid product comparisons via self-service devices in selected departments such as home
electronics and appliances.
Shopping is declining as a source of entertainment for consumers. The main tool for improving a store's entertainment value is the
deployment of digital media and large digital display screens. A few retailers have successfully tested coupling an e-commerce- based
kiosk with a large digital display screen, enabling consumers to tailor the content they want to see (i.e., product information, product
comparisons, product context and bundling).
Beyond e-commerce availability, retailers can improve the store experience with touch-enabled customer interaction within the store, and
employing other in-store self-service transactions. Consumers are rapidly migrating toward a touch interface as their preferred method of
interaction, thanks to the iPod, the iPhone, other touch-based smart phones and touch-based self-service kiosks. This is a longer-term
effort, but one that can successfully create a positive difference in a retailer's customer experience satisfaction.
Food shoppers to get relief as Wal-Mart grows Discounter's grocery move expected to push prices down
BY BETH QUIMBY
Staff Writer Kennebec Journal & Morning Sentinel
Reeling from the highest jump in grocery prices in two decades, Maine food shoppers could see some significant price relief in the coming
months.
Thanks in large part to Wal-Mart Stores Inc., which is making a major move into Maine's grocery business this year, shoppers should see
their grocery bills drop as competitors lower their prices to match those set by the giant discount retailer, industry analysts said.
"This is great news for consumers," said Mike Berger, editor of the Griffin Report of Food Marketing, a Duxbury, Mass., trade publication
that follows the New England food industry.
The recession and a change in shoppers' buying behavior also are forcing food prices down. Many consumers are buying less food and
switching away from national brands to private labels.
"Our prices are going to drop regardless," said Michael Norton, spokesman for Hannaford Bros. Co., the Scarborough-based supermarket
chain.
Signs that competition is heating up among Maine's food retailers are mounting. At a time when most retail construction has virtually halted
in Maine, new grocery stores are sprouting up across the landscape.
Wal-Mart is adding close to 180,000 square feet of grocery space -- the size of three football fields -- at new Supercenter stores under
construction in Sanford, Scarborough, Ellsworth and Bangor.
The stores will be equipped with all the accoutrements of full-service grocery stores: fresh produce, meat and poultry sections, and dairy
departments. They also will feature locally grown produce, such as Maine potatoes and blueberries.
Hannaford Bros. is opening more than 150,000 square feet at new stores in Gray, China and Winthrop, and at a state-of-the-art, energy-
efficient supermarket in Augusta. Shaw's Supermarkets Inc., founded in Maine and now headquartered in West Bridgewater, Mass., is
planning to remodel some of its 23 Maine stores but hasn't made specific plans public.
The move by Wal-Mart to expand its grocery business in Maine and other New England states, where zoning and anti-Wal-Mart sentiment
kept the retailer's presence relatively minor in the past, comes at a good time for both the retailer and shoppers, say industry watchers.
Recession-sensitive shoppers who saw grocery prices rise 5.5 percent nationally last year are looking for the kind of competitive prices
offered by the nation's largest grocer, and communities are looking for new jobs and taxes.
Wal-Mart officials say the perception of the company has changed as its presence has slowly grown in New England.
"When we look at areas with opportunities for growth, it is more pronounced in the New England states," said Keith Morris, Wal-Mart
director of public affairs for the Northeast.
Morris said Wal-Mart can keep its prices down because of its technology and distribution network. When a shopper goes through the
checkout line at a Maine Wal-Mart, the item is registered at a distribution center in Lewiston, so the company can restock as needed.
"It is only shipped as needed, which is huge" in keeping prices down, said Morris.
Shoppers are extremely price-conscious right now because of the recession, and their buying behavior reflects that concern.
Americans spent 2.47 percent less on food in the last quarter of 2008 compared to the three months before, the largest quarterly drop
since the federal government began tracking such data, according to The Food Institute in Elmwood Park N.J., which tracks the industry.
"It is safe to say the U.S. shopper reacted to the downturn in the economy more quickly than at any time in recent history," said Brian Todd,
the institute's president.
Wal-Mart has been making inroads into Maine's grocery sector since first entering the state in the early 1990s.
Last year, the 40-year-old Bentonville, Ark., company held a 17.9 percent market share, second to Hannaford's 43.1 percent, according to
the Griffin Report's annual survey. Shaw's was third at 17.8 percent.
Jim Hertel, a partner with Willard Bishop, food retail consultants in Barrington, Ill., said it is hard to overestimate the impact of Wal-Mart on
food prices. He said that between 1995 and 2005, Wal-Mart itself was responsible for keeping the national food inflation rate down by a
third.
"They have a real and measurable impact on consumer prices," said Hertel.
Overall, traditional grocery stores such as Hannaford and Shaw's are losing market share to supercenters, national drug stores and dollar
stores, he said. Hertel expects traditional supermarkets, which 15 years ago enjoyed a 95 percent share of the food business in New
England, to drop to around 40 percent by 2013.
Hannaford is positioning itself for the months ahead by shaving its operational costs by "tens of millions of dollars," said Norton, the
Hannaford spokesman.
The company has trimmed about 50 positions from its administrative ranks this winter by offering retirement incentives and has been
slashing its advertising and marketing budgets.
It is negotiating with its suppliers for cheaper prices.
Shaw's, meanwhile, has expanded its private-label offerings, which store officials say are 10 percent to 20 percent less expensive than
national brands.
"About 18 percent of our sales are from our own brands," said Dina Piran, public affairs manager.
Hertel said regional chains can successfully compete with Wal-Mart, even as they reduce their prices.
"There are a number of grocers in Iowa, Texas and New York state who do very well, thank you, and compete head to head," he said.
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