Giant Eagle says 'price lock' through holiday season to combat inflation
Giant Eagle is locking down prices for the holidays, but the freeze will thaw shortly after the new year begins.
Starting on Thursday, the grocery store chain is locking down prices on 300 popular items, including produce, meat, deli, dairy, bakery and prepared foods, to help customers plan for holiday shopping, spokesman Rob Borella said.
The Low Price Lock program was created as a result of rising costs for commodities, such as corn, wheat and soybeans, and fuel prices, contributing to rising grocery prices, O'Hara-based Giant Eagle Inc. said.
The program will exclude milk and eggs.
“I think it has affected the customer because it results in an unpredictability and/or an increased grocery bill, and we all feel that,” Borella said.
With 229 supermarkets and 178 convenience store-gas stations in four states, Giant Eagle has long been the dominant player regionally in the grocery industry, but it is increasingly surrounded by discount grocers looking to increase market share.
It's a risk for the company to lock in prices because there is a chance it could lose money, but it also could be a marketing success in signaling to customers that the company is sensitive to the economy's effect on shoppers' finances, said Jeff Inman, professor of marketing at the Katz School of Business at the University of Pittsburgh.
Retailers locking prices is unusual but not unheard of, said Jim Hertel, managing partner at Barrington, Ill.-based Willard Bishop, a food retailing consultant.
Rochester, N.Y.-based Wegmans Food Markets Inc. implemented prize freezes on 40 items from February 2011 to the end of last year. It has been implementing seasonal price freezes this year.
Stores that choose to do this usually will have more price flexibility with their own private-label products, Hertel said. “They probably ... have a little bit bigger margin on those products.”
About 54 percent of the price-locked products will be Giant Eagle's brand, Borella said.
The majority of the products' prices will be lowered before being locked, and the price reductions will be as high as 49 percent of recent prices, Borella said.
The Low Price Lock program will be in effect through Jan. 2, but whether it will be reinstated at some point is unknown, he said.
“So this is something new for us, and we're going to learn some lessons, get some feedback from customers and see where it goes from there,” he said.
Giant Eagle has about 29 percent of the market share in the Pittsburgh region, but discount grocers, such as Aldi and Bottom Dollar, are gaining footing as price-conscious shoppers seek deals, according to data from Chain Store Guide, a Tampa-based market research firm.
Wal-Mart Supercenters have the second-largest grocery market share in the Pittsburgh area at 18.5 percent, according to Chain Store Guide.
In a TV campaign, Wal-Mart asks shoppers to bring their latest receipts from other stores when they visit Wal-Mart, then buy the same items, which are likely cheaper at Wal-Mart, the Bentonville, Ark.-based company said.
Bottom Dollar has opened 16 stores locally since the chain entered the market in January. a spokeswoman said.
Aldi, Bottom Dollar and Sav-A-Lot are classified as limited assortment stores, which have lower prices but are smaller and carry fewer name-brand items than traditional stores.
Giant Eagle has responded by diversifying its banner with its upscale Market District stores, GetGo convenience store/gas stations and Giant Eagle Express, “which has a little bit of everything,” Borella said. It also is bringing its discount store, Valu King, to the Pittsburgh area with an opening next month in Ross Towne Center on McKnight Road in Ross.
Giant Eagle recently started a television campaign in which “regular people” tout the store's high-quality products and yearly savings with double coupons, weekly specials and Fuel Perks, a gasoline purchase discount program linked to grocery sales.
Tory N. Parrish is a staff writer for Trib Total Media. She can be reached at 412-380-5662 or email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Charges advance for men accused in police scuffle at Fort Ligonier Days
- Sting highlights demand for Pappy Van Winkle bourbon
- Penguins finally break through, defeat Devils at Prudential Center
- Hempfield man receives long-overdue Bronze Star for World War II service
- Rooney says Pittsburgh is ‘good place’ for next northern Super Bowl
- Longtime Greensburg District Judge Albert will seek fifth term
- Arnold man’s molestation conviction upheld
- McCallister’s 14 points lead Steel Valley past Thomas Jefferson
- PPG submits offer for French sealants, adhesives business unit
- UPMC researcher who died of cyanide poisoning committed suicide
- Leader Times roundup: Kittanning boys take down Derry