Issues in Marketing - Superior Supermarkets

Johnathan C Brown

Professor Ethan Allen

Marketing Cluster

12 February 2009

Superior Supermarkets – Written Case

Problem Statement

Superior Supermarkets must decide if everyday low pricing should be implemented in their three stores in Centralia, MO.

Relevant Information

The Company: Superior Supermarkets is a division of Hall Consolidated, a privately owned wholesale and retail food distributor. Hall Consolidated distributed food and related products to some 150 company-owned supermarket units operating under three supermarket chain names through 12 wholesale distribution centers. These distribution centers also supplied about 1,100 independent grocery stores in the Unites States. Hall Consolidated sales in 2002 were $2.3 billion. The fact that Superior Supermarkets are connected with an experienced and profitable distributor would lead me to put this in the advantage category. Lastly, Superior Supermarkets are doing great financially. Sales for the three stores had increased over from 2000 to 2002 reaching $14, 326,700 in 2002. The gross profit margin for the three stores was 28.8% in 2002 compared to the median US supermarket industry gross profit margin of 26.4%. This tells me that the company is making money and shouldn’t make any drastic changes that would affect the bottom line.

Competitive Environment in Centralia, MO: According to the US Census 2002, Centralia has a total population of 41,000, including 13,500 households. This is a very rural area and there is a possibility for Superior Supermarkets to penetrate larger markets such as St. Louis, Kansas City, and Columbia, MO. However, it is helpful that the median age of the Centralia population is 35. These individuals are more prone to go grocery shopping for the family as opposed to teens.

Major Competitors: Superior Supermarkets has three main competitors in their area (Grand American, Missouri Mart, and Harrison’s). From 1995 to 1999, Superior controlled the largest...