Kroger changes pricing strategy, phases out double coupons

Kroger-HIN_0569_I130430202738CHARLESTON, W.Va. – Kroger stores in the region have switched to a new pricing strategy that the company says will benefit all consumers, though others say it could send bargain hunters to other stores.

On Sunday, Kroger stores in the company’s Mid-Atlantic Division – including West Virginia, Virginia, North Carolina, eastern Ohio, Tennessee and Kentucky – lowered prices on thousands of items as part of the company’s new, everyday low price strategy.

Kroger officials said the strategy has worked well in test markets and should result in savings for the average consumer.

“We know that with the economy the way it is, customers care about price more than ever,” company spokesman Carl York said.

Among the reductions, several produce items were cut to 99 cents, 100-ounce bottles of Tide detergent were lowered to $11.99 and boxes of Freschetta Pizza were reduced to $5.49.

York said for the last several years, the company had been lowering prices on items in certain departments. He said officials believed it was the right time to implement the strategy storewide.

“We thought now is the time to do the rest of the store and do it in one campaign and lower prices at once,” he said.

“I think customers are really going to see their bills go down.”

To help balance the reductions, the company plans to end its practice of doubling the value of coupons worth up to 50 cents. Stores will begin honoring all coupons at face value on May 12.

While that may not sit well with coupon clippers, York said the savings would help benefit the broader customer base.

“There’s only so many customers that coupon or double coupon,” he said, “but lower prices across the store help out many more customers.”

York said the company’s switch to everyday low pricing was a part of a broader shift in the retail industry.

For decades, grocers thrived on a promotional model of running some products at discounts while others stayed at the regular price.

However, in the last 20 years, Walmart has used its everyday low price model to climb to the top of the nation’s retail ladder.

Kroger’s new strategy is designed to help it compete better against the Bentonville, Ark.-based retail giant.

Not everyone is sold on the concept.

Jan Vineyard, president of the West Virginia Oil Marketers and Grocers Association, which represents independent grocers, said customers are still drawn to sales and double coupons.

“Customers want a good deal, and they want to think they’re getting the best deal they can get,” Vineyard said.

She said independent grocers still work with their suppliers to get good deals and promotions. She hopes the change at Kroger will spur shoppers to check out deals at locally owned stores.

“The smart, savvy shopper would probably like what we have to offer, compared to this everyday low price strategy,” Vineyard said.

York said Kroger still would have sales, such as its popular 10 for $10 promotion, throughout the year. The company also will expand the number of digital coupons offered on Kroger.com.

The company is also keeping its Kroger Fuel Center savings program and its $4 and $10 prescription program.

Date: May 1, 2013

Source: Daily Mail

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