Test

Case; Superior Supermarkets

“Everyday Low Pricing”

Company background;

* Superior supermarkets is a division of Hall Consolidated, a privately owned wholesale and retail food distributor, Hall formed in 1959 and distributed food and related products to 150 company-owned supermarket units, operating under three supermarkets chain names through 12 wholesale distribution centers in US, its sales in 2002 were 2.3 billion

*The three Superior supermarkets are located in Centralia-Missouri,

Everyday Low Price Policy;

A retailer charges a constant lower everyday price for merchandise with few, if any, price discounts, this practice differs from a “Hi-Lo” price policy, whereby a retailer charges higher prices on an everyday basis, but then runs frequent promotions.

The Goal of the Superior Markets new approach “Everyday low price”;

1-Superior’s prices were higher than the competition

2-Superior could lose market share due to the price differential and accordingly losing its second position “Market challenger”.

Everyday Low Pricing Implementation Considerations;

*All of the Hall executives acknowledged that Superior Supermarkets were rightly perceived by shoppers as having the highest prices

*Whether or not to adopt this pricing strategy across-the board for all products or just certain categories?

*The pricing itself and how much it should be lower? As the studies showed that their market-basket prices were always 7-10% higher than other competitors

* All of the Hall executives agreed that Superior could not “outprice” Harrison’s, and that they should not start a price war in a market that has been profitable for them, as they offer greater convenience of shopping with their three stores and that is worth something.

*The case showed that they made some progress in adopting the new pricing strategy that required another meetings.

Major Competitors;

Four grocery chain stores accounted for 85% of all food sales in...