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Sales-Increase Forecasts Portend Happy Holidays Ahead

Since Thanksgiving is later this week, let's make it official: The holiday season is upon us.

As usual, the season prompts a critical question for the food distribution industry — namely, how are food sales shaping up for this month, and how are sales likely to perform through next month? As you'll see in a front-page news article in this week's SN, the thinking as we go into the season is positive — maybe more positive than it has been for several previous holiday periods.

The reason for that is the economy, but in a strange way. The outlook isn't positive because the economy is so robust, but for the reverse reason. The economy isn't so strong, fuel prices are up and nervous consumers are starting to scrimp a bit. Those factors are likely to attenuate spending on meals away from home and possibly on gifts too.

Almost certainly, consumers will feel a new reluctance to travel great distances to fill their pantries.

The good news is that as a sort of payback for those privations, consumers are likely to make meals prepared at home the bright star in the constellation of treats they bestow on themselves and their families this holiday season. Naturally, that's all to the good for supermarkets.

Let's take a look at what several supermarket operators think about the upcoming holiday season and how they intend to promote differently this year in light of the season's changing consumer dynamics.

You'll see more about the opinions of these operators and others in the front-page news presentation:

  • Trip Straub at Straub's Markets, St. Louis, said, “To date, [sales] have been very strong. I don't anticipate that will subside. We're very positive.” To take advantage of that, Straub's is encouraging customers to reserve fresh Thanksgiving turkeys online, which has increased order activity by a half despite large price increases. Indeed, total Web-based sales are up 65%, partially because of the recent addition of gift baskets.

  • Dick King at Associated Food Stores, Salt Lake City, said sales increases of 6% to 8% are anticipated for the holiday season. In part, that's because Associated's corporate stores intend to increase their marketing emphasis on floral, including centerpiece arrangements, and produce sections. Some produce departments are being extended into store lobby areas. Also offered will be full turkey dinners with price points ranging from $59 to $79. To make sure stores are at the top of consumers' minds, open houses will be staged at many, featuring sampling and choral performances. It's thought that the benefit open-house events provide, although intangible, could be a sales lift of 2%.

  • Mark Oerum at HOWS Markets, Pasadena, Calif., is raising his sights beyond turkeys. This season has produced strong sales gains for proteins such as chicken, ground beef and chuck steak. So those items are receiving more frequent promotional action. “I get the feeling from consumers that some basic cuts are looking more attractive.”

To build on that, HOWS intends to have 25 billboards up during the season that will promote just one item — prime rib. “We'll make our statement with [prime rib],” he said. Part of that strategy is to underscore that the stores offer only Prime- and Choice-grade cuts.

Happy holidays are ahead.