Private Label Buyer

A Big Impact

October 4, 2012
Giant store

KEY POINTS

Giant Food is a key destination for many shoppers.
Operators are emphasizing price, quality and store brands.
The chain faces strong competition from speciality and value-oriented operators.

Giant is more than just a name for a major mid-Atlantic supermarket retailer;

it also signifies the chain’s standing in shoppers’ eyes.

That was the revelation from a March national online survey of more than 6,000 consumers conducted by Market Force Information Inc., a Louisville, Colo.-based customer information firm. Landover, Md.-based Giant Food was listed as shoppers’ favorite grocery store.

Next in the ranking of favorites were Keasbey, N.J.-based ShopRite Supermarkets Inc., Bentonville, Ark.-based Wal-Mart Stores Inc., Lakeland, Fla.-based Publix Super Markets Inc., and Issaquah, Wash.-based Costco Wholesale Inc.

Janet Eden-Harris, Market Force chief marketing officer and senior vice president of strategy, says that though the most raw votes went to Wal-Mart and Cincinnati-based The Kroger Co.—which are much larger than Giant—Giant prevailed when the chains were indexed by size.

Consumers in the survey were asked to rank retailers on such attributes as pricing, cleanliness, customer service, meat and produce quality, atmosphere and sustainable practices.

Giant was not the leader in any specific category, but had the highest overall marks.

Owned by Amsterdam-based Ahold, which has more than 3,000 stores in Europe and the U.S., Giant Food LLC, is operated by Quincy, Mass.-based Ahold USA’s Giant Landover division and has 173 stores in Virginia, Maryland, Delaware and the District of Columbia.

The chain has been operating more than 75 years and remains an active merchandiser.

One of Giant’s recent initiatives was “Project Refresh,” a program to remodel or replace more than 100 stores throughout northern Virginia, Maryland and Delaware.

Completed last year, features include enhanced produce departments, full-service meat and seafood sections, large service delis with a wide variety of prepared foods, and extensive varieties of natural and organic foods.

While such elements are positioning the chain for growth, price and quality also are highly visible competitive strategies.

A Giant store in Springfield, Va., near Washington, D.C., for instance, has signage throughout the location spotlighting the chain’s “Double Money Back Guarantee,” in which outlets will double the money back of customers who are not satisfied with their purchase of Giant-branded selections, including meat, produce, deli foods, seafood, bakery items and dairy products.

The signs include photos of plated meals, such as frozen seafood, along with package images.

An emphasis on price, meanwhile, is evident at the self-service meat case, where dividers—with the message “Big Buys. Buy Big. Save Big, Everyday”—tout the potential savings from purchasing “value packs,” which feature larger amounts of proteins.

Signage above perishables cases—and in other departments—also promote the savings from using loyalty cards for purchases.

In addition, the retailer is positioning a wide array of private-label items as competitive differentiators.

Giant-branded products in the frozen cases, for instance, include fruit bars, orange juice, waffles, pancakes, fruit, yogurt, ice cream, French toast sticks, garlic bread, lasagna, pizza, soft pretzels, egg rolls, spring rolls, macaroni and cheese bites, jalapeno bites, French fries, tater tots and hash browns.

There also are about a dozen selections of frozen Giant-branded seafood, including jumbo butterfly shrimp, haddock, tuna, cod, flounder, barramundi, salmon, mahi mahi, cooked shrimp and raw shrimp.

Among the store-branded items in the meat case are value-added proteins in modified atmosphere packaging.

Offerings include beef patties in such varieties as Cheddar & Bacon; Cheese, Pepper & Onion; and Swiss Cheese & Portabella, as well as beef sliders with Cheddar & Bacon.

Another prominent store brand, Nature’s Promise, consists of natural and organic products.

Items include cheese, milk, tortillas, sweet Italian pork sausage, frozen bagels, frozen organic fruit and organic chicken.

Ahold USA has a private-label support organization that focuses on adding new products and which has developed new packaging to unify the brands.



Giant Food At A Glance

Company Name: 

  •     Giant Food LLC

Headquarters:

  •     Landover, Md.

Established:

  •     1936

Locations:

  •     173

Market:

  • Virginia, Maryland, Delaware, District of Columbia

Operator:

  •     Ahold USA

 

“Giant Landover continues to grow sales and market share and focus on strengthening its own-brand offerings,” the company reports, adding that it also “is placing a strong focus on its fresh assortment and successful customer loyalty programs.”

That fresh assortment includes flavorful and convenience-oriented proteins in the meat and deli departments.

The full-service meat case in the Springfield store, for instance, recently was merchandising three types of kabobs—Chicken, Pork and Beef—as well as New York Strip Steak in a Bourbon Marinade.

Also in the case were several types of fresh Italian sausage, including Garlic & Cheese Chicken, Hot Chicken, Garlic & Cheese Pork, and Hot Pork.

Among the items in the full-service deli case were Meatballs Burgundy, Grilled Chicken Breast, Chicken Cordon Bleu, Beef Provencal, Roasted Red Bliss Potatoes and two-dozen varieties of salads.

Industry analysts say Giant’s focus on price, quality and store brands is a prudent strategy in the current economic climate.

“Ahold developed an everyday low price-type approach for perishables and they seem to be getting payback from it,” says W. Frank Dell III, president and chief executive officer of Dellmart & Co. Inc., a Stamford, Conn.-based retail consultancy. “But a lower-price image also can lead some consumers to question whether they also are getting a lower-quality product. As a result, Ahold has to promote the idea that quality is present as well.”

While he says it is uncertain how long a major focus on price can be successful, Dell notes that many shoppers have a “depression mindset” and are looking to minimize their food spending.

“Ahold is on track because a large number of consumers are in a conservation mode,” he states. “It corresponds with the phenomenal growth of private label where today there is a broader array of products with increased quality and better packaging. Prices are often 10-percent less than the national brands. The consumer will gravitate to store brands as long as the quality is there.”

Richard George, professor of food marketing at   St. Joseph’s University in Philadelphia, agrees that Giant is “doing a nice job” in leveraging store brands, but notes that the chain still is in the unenviable position of being “caught in the middle.”

Giant, he says, operates in the space between the “cool-end” stores that are recognized for their high-quality prepared selections, such as Wegmans and Whole Foods, and the savings-oriented retailers, including Walmart and Save-A-Lot.

“The stores in the middle will struggle,” George states. “Their primary positioning is that they are one-stop shopping. But they will always face the challenge of providing a point of differentiation, to be able stay in the middle and still stand out.”

He suggests that Giant will benefit by merchandising perishables that could become signature products, such as a private-label pizza with artisan crafting or exotic fruit.

“The goal is to get shoppers to visit the stores because the chain is innovative or creative, or might even carry locally produced items,” George says. “Chains can operate with a traditional approach, which Giant is doing, or they can focus more on their perishables.”