stores extend reach
The Arizona Republic
Jun. 13, 2004 12:00 AM
Christine L. Romero
The smell of hot French bread gets some supermarket customers moving. Here
at Food City, it's the fresh tortillas.
Mounds of tomatillos, garlic, green chiles and jalapeños greet customers in
the produce section, near a wall of canned hominy for making menudo and
posole. Nearby are mounds of Gala apples, 59 cents a pound; cucumbers, three
for 99 cents; and red and yellow peppers, two for 99 cents.
• Food City supermarkets abide by an “everyday low price” model, widely
popularized by Wal-Mart. The strategy allows retailers to keep a discounter
image while reducing advertising costs and running fewer sales.
• Conventional grocers, including Fry's and Safeway, use a “high-low” model,
which focuses pricing strategies on club discount cards and loss leaders.
Grocers willingly lose money on a heavily discounted item, such as milk, in
the hope that it will bring foot traffic.
The Food City supermarkets, operated by Bashas' Supermarkets, began by
catering to Hispanics, the fastest-growing ethnic group nationwide. As the
Valley grows and supermarket competition gets stiffer, Food City stores are
beginning to reach out to the broader market, trying to lure non-Hispanic
"budget-conscious shoppers," who Food City officials believe are the same
shoppers who turn to Wal-Mart Stores.
Bashas' has grown the number of Food City stores from one in 1993 to today's
58. The company now is upgrading and renovating many locations.
Food City stores abide by an "everyday low price" model widely popularized
by Wal-Mart. The strategy allows retailers to keep a discounter image while
reducing advertising costs, running fewer sales and maintaining a steady
flow of price-conscious shoppers. Wal-Mart's impact has been tremendous,
forcing competitors to alter their strategies to keep loyal customers.
"Our prices have struck a chord," said Robert Ortiz, Food City's vice