Hi Value Supermarkets

Case Summary:

In 1975, Hi-Value Supermarkets became a division of Hall Consolidated, a privately owned wholesaler and retail food distributor. Hi-Value Supermarkets is considered to be the smallest of the three supermarkets chains owned by Hall Consolidated, with a small store distribution for its category. Hi-Value was the number one or two ranked supermarket chain in each of its trade markets (as measured by market share).

Hi-Value is known as “most convenient”, having three stores in Centralia compared to its top competitors only having one each. Hi- Values three are major competitors are: Harrison’s, Grand American, and Missouri Mart. The three major competitors in Centralia contain stores all subsequently larger in size than those of Hi-Value. The four major supermarkets in Centralia make up 85% of all food sales, with the remaining 15% stemming from smaller, independent grocery stores and convenience stores. All 3 major competitors contain a feature attributes and a unique position in the market. Because of Hi-Value Supermarkets having three locations throughout Centralia, they provide a level of convenience that the competition simply cannot mimic without substantial investment.

Although Hi-Value Supermarkets does offer the highest level of convenience, there overall prices are the highest. Residents of Centralia prefer a lower price factor mainly due to the average income, which falls between $35,000 and $74,999. Price is the most important store determinant for the residents, which poses a problem for Hi-Value. With price being the most important store determinant for the residents, the current situation poses a problem for Hi-Value.

The major question described in the case is whether or not Hi-Value should implement a low-pricing strategy. With the examination of Hi-Value’s current state, it is evident that their future falls in between several courses of action that executives must examine and choose whether or not to integrate...