Supermarket war heats up with customers the only clear winner
Late last week, Shaw's and Star Market announced they were doing away with their rewards card program, opting to launch lower "card-free" pricing on thousands of items instead.
"No doubt, it's the customer," said Mike Berger, senior editor of the Griffin Report of Food Marketing, a trade paper covering the supermarket industry. "Lower prices are never a bad thing. The more they drop to keep up with each other, the more it benefits the consumer."
The company laid off 700 employees last November, and was bought earlier this year by Cerberus Capital Management.
Customers like Ray Gorman of Manchester, shopping Friday at the Shaw's market on South Willow Street, said he will not miss the reward cards program.
"I didn't like that you had to give them all that information to get the better prices," Gorman said. "Why did they need all that from me?"
"Simply put, we eliminated the rewards card because we want to offer the same price to all customers without a card," Sylven said. "In general, the cards were used to allow customers access to sales prices, and we did not currently have any points program with the card. Our business strategy is customer-centric, and we knew that pricing is very important to customers.
Analysts, however, say the move by Shaw's, and the one the prior week by Hannaford — where prices were dropped on more than 4,500 items — indicate that new entries into the regional market are taking a bigger share of the grocery market.
The Market Basket store on Donald Street in Bedford opened in May. That followed a location opening on Elm Street in Manchester in April 2012, and one in Hooksett on Market Drive in 2011.
Supermarket chains are also facing competition from nontraditional food stores, including retailers Target and Walmart; the latter is the largest grocery retailer in the country. Upstarts have also made inroads: The Market Basket on Daniel Webster Highway in Nashua is across the street from Trader Joe's, a California-based specialty retailer that moved its Tyngsborough Mass., store there last year, marking its entry into New Hampshire.
"Call me in a few years, and I bet we're having this same conversation about reaction to a Wegman's coming to New Hampshire," Berger firstname.lastname@example.org
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