ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, April 14, 1996 TAG: 9604150089
SECTION: CURRENT PAGE: NRV-18 EDITION: NEW RIVER VALLEY
DATELINE: CHRISTIANSBURG
SOURCE: ELISSA MILENKY STAFF WRITER
Thick coupon books featuring the latest bargains on creme pies, apples and other groceries at Wal-Mart's new Christiansburg supercenter are filling mailboxes.
Radio advertisements touting the wine consultant and seafood section in Harris Teeter's new Blacksburg store are saturating the airwaves.
Shoppers in the New River Valley would have a hard time not noticing these two entries into the local grocery market. For them, new major grocery outlets mean sale prices and grand openings.
For the existing grocery chains, the two newcomers mean more competition.
"As far as the overall shopping community goes,... it's just going to redistribute sales," said J. Duncan Herrington, a Radford University assistant marketing professor who has studied the local grocery market. "All in all, it's going to be good for the customer."
Though Harris Teeter and Wal-Mart opened within two weeks of each other, the stores are marketing different strengths.
Harris Teeter is focusing on service, selection and environment. Time-pressed shoppers can pick up chicken cordon bleu or spinach pizza prepared by one of the store's two chefs for that night's dinner.
Wal-Mart is touting low prices and one-stop shopping - a place where you can buy clothes, hardware and groceries with one check.
Customers of existing grocery chains already are seeing a few extra perks. At Kroger stores, all check-out lanes now are open at peak times: Monday through Friday from 4 to 7 p.m. This latest benefit is being advertised with large, bright yellow signs.
"There are always changes being made to be more customer-oriented," said Kroger spokeswoman Joanne Boone.
Although Boone did not attribute the change to any particular competition, the new Harris Teeter poses a direct challenge to the headlock that Kroger has had on the niche for gourmet groceries in Blacskburg. Kroger's live lobsters and organically grown produce are now competing against Harris-Teeter's melon bar and store chefs.
The Wade's Supermarket on Blacksburg's South Main Street, just across the street from Harris Teeter, expanded to 24-hour service a few months ago.
Food Lion recently began moving all of its stores toward 24-hour service, in addition to adding an "MVP" program that gives discounts on certain store items to loyal customers.
The North Carolina-based grocery chain also is remodeling many of its stores to include deli and bakery counters that offer more prepared food. The chain's North Main Street store in Blacksburg already offers these extras and is soon to undergo additional remodeling.
"I think it's fair to say that the Wal-Mart competitive challenge is why we're more interested than ever in retaining our loyal customers," said Cecily Durrett, a company spokeswoman.
Though Wal-Mart doesn't specialize in groceries, it has made its mark in the industry. The company would not release specific figures on grocery sales, but Supermarket Business magazine recently reported that a little more than 30 percent of shoppers treat supercenters such as Wal-Mart and Kmart as their primary grocery source.
A study done by the Food Marketing Institute, a national trade association based in Washington, found that 40 percent to 45 percent of supercenters' sales are grocery products. Wal-Mart itself says it sells more general merchandise in stores that also sell food.
Nationally, Wal-Mart has 254 supercenters - six of which are in Virginia.
"If I'm not near a supercenter, I'll shop the closest grocery store," said Brandon Parker, a Wal-Mart spokesman. "It depends on the time you have. If you can, it's convenient to do it all under one roof and write one check."
Wal-Mart's grocery section has been busy since its opening nearly three weeks ago. Several customers said they came to Wal-Mart to check out the grocery prices and see how they compared with their regular grocery store.
"Just curious, I guess," said Dublin resident Sandy Landreth, who also works at Wal-Mart's Pulaski store.
The success of supercenters such as Wal-Mart and Kmart, which also offers groceries at some of its stores, was enough to prompt the Food Marketing Institute to so a study called "Supercenters and the Future."
The study advises grocers to respond to supercenters in numerous ways, including expanding and emphasizing the fresh, prepared take-home foods, rewarding loyal customers, using signs to play up strengths, building up selection of perishable items and of course, sharpening prices on highly visible products that compare to supercenters.
"We really concentrate on food and the convenience of food," said Morganthall, of Harris Teeter. "Wal-Mart or Kmart, they're pretty big stores, and they've got a little bit of a lot. They've got a lot of variety, but not of food.. We market a lot of variety of food and do it in an amount of space that's very convenient."
Ultimately, people choose their grocery store for different reasons. Herrington, who conducted a study of 600 New River Valley residents with a Radford University marketing class, found that Kroger and Harris Teeter shoppers valued product selection more than location, while people who frequent Wade's and Food Lion had the opposite priorities.
Price was important to half of the people surveyed.
How these priorities will translate into how New River Valley shoppers divide their grocery dollar remains to be seen. Herrington plans to conduct another study in the fall.
LENGTH: Long : 114 lines ILLUSTRATION: PHOTO: Alan KIm/Staff. 1. The new Harris Teeter, with itsby CNBupscale appearance, touts a wine consultant and fresh seafood
section among other amenities designed to
lure shoppers (ran on NRV-1). 2. Neatly arranged piles of fruits and
vegetables form tall islands in the produce department at Harris
Teeter. 3. A banner promotes better customer service at the
Blacksburg Kroger in University Mall. 4. Stacy Pisano hands over a
sample to Harris Teeter pastry chef Dianne Shannon (left) for a
customer to try. 5. On opening day, a customer checks out the
prepared foods section in the deli and backery area of Harris
Teerter. 6. Acorss the street from the new Harris Teetre is Wades.
7. Wines and beer occupy another corner of the new Harris Teeter
(above). The section features a walk-in cooler with automatic glass
door. color. 8. Food Lion at Patrick Henry Shopping Center on North
Main recently began operating 24 hours.