Dominick's, Jewel in grocery store price war
The grocery price wars are hitting the express lane, speeding up savings for whipsawed consumers seeking relief from the high cost of feeding a family.
Dominick's Finer Foods, which has its Midwest headquarters in Oak Brook, said this week it has been slashing prices up to 30 percent on thousands of food and other products at its 81 Chicago and suburban stores. Jewel-Osco started a price-cutting campaign in April. They finally have joined the ranks of Aldi Inc., Food 4 Less, Ultra Foods, Walmart and others with lower prices.
And they're promising those lower prices will stay for the long haul.
"Many of these price cuts may stay with the recovery," said George Rosenbaum, co-founder and retail analyst with Chicago-based Leo Shapiro & Associates.
Grocery chains have been struggling just like other businesses during the recession, as more consumers have been lining at the unemployment office rather than the checkout lane.
Dominick's has been quietly cutting prices over the last three weeks on nationally advertised foods as well as their own private label items, but a formal announcement came this week, said Don Keprta, Dominick's division president based at the Midwest headquarters in Oak Brook.
"This has been our strategy for some time to lower prices," Keprta said. "Earlier this year, about 5,000 items had prices cut and we plan to continue the Fresh Value card for additional savings."
Keprta said Dominick's is responding to customers, who have been squeezed by the recession and job or salary cuts, and don't have the immediate cash to stock up during sales. They wanted lower prices every day, instead.
"We have no intention of changing back," said Keprta.
Walmart's lower "rollback" prices began putting pressure on the grocery chains. The retailer also began an advertising campaign in recent weeks that said it would match the sale price of any product, whether it was a loaf of bread or a plasma TV, from any competitor.
"We compete to be the low-price leader," said Walmart spokesman John Simley. "We don't do sales or promotions."
Jewel-Osco introduced its Big Relief Price Cut program in April, offering thousands of products discounted up to 20 percent. The program has been successful, the company said, though it didn't offer any specific details.
"Jewel-Osco will continue to evaluate its pricing to ensure customers are getting the best value possible," said Jewel-Osco spokeswoman Karen May.
Meijer said many retailers offer "10 items for $10" promotions. The Michigan-based chain goes a step further by offering the 11th item free, said spokesman Frank Guglielmi.
"We are focused on being very innovative and aggressive in our promotions," Guglielmi said. "As a privately held company, we are very nimble and can react quickly to customer feedback."
Aldi, which has operations in Batavia, says it saves consumers about 15 percent to 25 percent less than discounters and big box stores and up to 45 percent less than traditional supermarkets for their store brands due to its no-frills. The Germany-based company has survived three recessions since it opened in the U.S. in 1976, said Aldi spokeswoman Heather Tarczan.
While competitors have promoted special discounts, Aldi continues its no-frills approach. The only difference is it has boosted its marketing.
"In recent years we are communicating more than we used to through print ads, special purchase mailer to the home, e-newsletters and in-store signage," Tarczan said.
On the other hand, the high-end Whole Foods Market has been offering customers some price relief.
The natural and organic grocery chain recently introduced The Whole Deal program to help its customers enjoy natural and organic ingredients, while sticking to their budgets. Its brochure features meal plans and recipes on a budget, department-specific tips and savings and 365 Everyday Value product deals, among others.
Whole Foods also plans to expand its private label product line, said spokeswoman Kate Klotz.
"By increasing the number of these products to our stores, we're able to offer them lower prices on many of their favorites items," Klotz said.