Wednesday, April 1, 2009

Competitor News: Bashas' Chain Launching 10,000-Plus Item Storewide Price Slashing Program This Week in its Arizona Supermarkets

Arizona Market Region Report: Food & Grocery Retailing in the Recession

Bashas', Arizona's home state supermarket chain, is fighting back against the economic recession and stiff competition from numerous food and grocery retailers in the state by launching a major price-slashing initiative in its 100-plus Bashas' flagship banner supermarkets. Arizona-based Bashas operates about 156 supermarkets in the state (out of about 161 total) under the Bashas', Food City (Latino format) A.J.'s Fine Foods (upscale format), Eddie's Country Store and Bashas' Dine (prepared foods focus) banners. Bashas also operates the small Sportsman's Fine Wine & Spirits chain in Arizona.

Mike Proulx, Bashas' president and CEO, said starting this week the supermarket chain is slashing the everyday prices on more than 10,000 nationally branded and private label food and grocery items across all store categories and departments.

The current economic recession and the added competition from chains like Wal-Mart, Safeway, Kroger Co-owned Fry's, Albertsons, Costco, Tesco's Fresh & Easy Neighborhood Market and others in Arizona is what's behind the aggressive price-slashing value move by hometown chain Bashas'.

"In the 77 years that Bashas' has been in business, we've weathered countless economic downturns," Bashas' CEO Mike Proulx said in announcing the storewide price reductions. "Not only was our company formed during the height of the Great Depression, but we've survived the ups and downs of the supermarket industry, increased competition and national economic fluctuations. As Arizona's hometown grocer, we knew we needed to do something more for families looking to stretch their dollars during these tough economic times."

Bashas' is serious about trying to protect its turf in the white hot competitive Arizona market region, a state that has been hit among the hardest by the housing foreclosure crisis, credit crisis, unemployment and overall recessionary blues.

In addition to its massive category-wide price reduction move this week, Bashas' is going back to some of that old time food retailing religion in the form of offering shoppers a good old supermarket sweepstakes promotion.

The promotion is a win-free-groceries-for-a-year sweepstakes, for which one lucky winner will walk away with $5,200 in Bashas' gift cards, or the equivalent of $100 a week in free groceries for an entire year, according to Johnny Basha, the vice chairman of the company and a member of the Basha family, owners of the supermarket chain.

Additionally, fifty-three second-prize winners will each receive a Bashas' gift card worth $50. One winner will be chosen from each participating Bashas' store in metropolitan Phoenix and Tucson.

Contests and sweepstakes like this are making a comeback in the supermarket industry in these tough economic times, designed as ways to get shoppers into the stores. For example, Safeway Stores, Inc., which is a major player in Arizona food retailing, currently is running a customer sweepstakes-drawing around its "Ranchers Reserve" store brand beef line. The first prize winner receives a brand new pickup truck and Airstream travel trailer. There are numerous second prize winners as well.

Bashas' started offering the sweepstakes in its stores this week. Shoppers can enter until April 30. The grocer says the prize drawing will take place in May.

As we reported and detailed in this February 6 piece [Arizona Market Region Analysis: Bashas' Worker Layoffs, Closing of Stores Could be the 'Canary in the Coal Mine' in Ultra-Competitive Arizona Market] the Arizona-based chain laid off 203 employees as a way to cut expenses amidst the double whammy of economic recession and heavy competition in Arizona. those firings came on top of previous layoffs earlier.

The hometown Arizona-based supermarket chain also is closing five of its stores in the state.

Having made the layoffs and decided on the closing of the five less than desired performing stores, and thus focusing on the expense control side of the ledger, Bashas' now appears to be putting its focus on the demand or sales side, kicking off the major price-slashing program as a way to keep and gain shoppers in Arizona.

The primary, although not exclusive, focus of the price reductions on the 10,000-plus items is on essentials or basic everyday food and grocery products that shoppers by most frequently. That obviously makes sense as that's where the hottest competition among competing grocers currently is, not only in Arizona, but throughout the United States.

As we discussed in past stories in Fresh & Easy Buzz, Bashas has always been a tough competitor. Years ago when Safeway became a major player in Arizona many analysts were writing Bashas' off. They survived. When Kroger Co. came to town in a big way... ditto. And the biggest threat, Wal-Mart, hasn't rendered Bashas' a failure, although the brawny big box retailer from Bentonville, Arkansas is the most serious threat to Bashas and all of the other supermarket chains doing business in Arizona to date.

Bashas' is showing with the major price reduction program that it gets value -- that merely being the hometown grocery chain isn't enough in the current recession.

But it's also clear that the Arizona-based supermarket chain is struggling, based on the layoffs, store closings and felt need to reduce the everyday prices on so many items. Although such price reductions are hardly exclusive to Bashas' in the current econopmic climate -- many supermarket chains are making similar moves, although at 10,000-plus items Bashas' is about the most extensive we've heard of thus far.

Arizona is shaping up as competition central in U.S. food and grocery retailing in the recession. Tesco's Fresh & Easy certainly has its job cut out for it competing with these long time major players like Bashas', Safeway, Kroger, Wal-Mart and the others in the state.

Linkage - Select Related Posts:

>December 16, 2008: Food & Grocery Retailing in the Recession: Bashas' Broadening the Shopper-Base in its Hispanic Format Food City Stores; Shoppers Search for Value

>February 6, 2009: Arizona Market Region Analysis: Bashas' Worker Layoffs, Closing of Stores Could be the 'Canary in the Coal Mine' in Ultra-Competitive Arizona Market

>February 3, 2009: Competitor News: 'Grocer-Gone-Wild:' Arizona's Fry's and its 'Bring it On' 'Take All Competitors' (Including Tesco's Fresh & Easy) Store Coupon Move

>December 12, 2008: Fresh & Easy Looking For Gold in Gilbert: Second Store in the Arizona City Set to Open Jan. 7; A Third Fresh & Easy Market to Open In Fall, 2009

>December 12, 2008: Marketing & Promotions Report: Manufacturers' Coupons Becoming the 'New Black;' Use Among Consumers Soaring; Marketers Distributing More Than Before

>October 2, 2008: Arizona Market Report: Fresh & Easy Opens Two New Stores; Marketside Opens in Three Days; Analysis of One Of the Most Competitive Markets in the U.S.

>June 8, 2008: Arizona Region Market Report: First Signs of A Weakening Might Be Starting to Show in the 'White-Hot,' 'Super-Competitive' Arizona Market

>April 9, 2008: Arizona's Shopper and Employee-Beloved Bashas' Named One of 'The Best' Places to Work in the State For Second Year in a Row

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