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Saving the Holidays

Shoppers are facing difficult economic times, with rising food prices adding to that burden. But retailers and analysts agree that Thanksgiving and Christmas remain important family gathering times, when shoppers will still want to put the same traditional dishes on the table, especially when it comes to meat. This holiday season, loyalty programs and cross-merchandising efforts that give shoppers

Shoppers are facing difficult economic times, with rising food prices adding to that burden. But retailers and analysts agree that Thanksgiving and Christmas remain important family gathering times, when shoppers will still want to put the same traditional dishes on the table, especially when it comes to meat. This holiday season, loyalty programs and cross-merchandising efforts that give shoppers a sense of value could prove especially potent for retailers.

“Consumers do not show signs of willingness to sacrifice quality in today's economic situation,” said James Richardson, vice president of Bellevue, Wash.-based consumer research firm The Hartman Group.

“For high-value centerpiece items like meat, they will want the same quality, from a high-quality source. Trading down is unlikely.”

Retailers however, can help loosen their shoppers' purse strings with special holiday meat promotions.

Many retailers are renewing promotions that offer loyalty card members a free turkey for Thanksgiving if they spend a set amount at the chain during a promotional period.

For example, Associated Food Stores, Salt Lake City, is offering its customers “Turkey Bucks,” which shoppers collect during regular shopping trips and can spend later on a turkey or other Thanksgiving foods.

“It helps retain our customer so we don't get people coming in and just buying a 49-cents-per-pound turkey or a 69-cents-per-pound turkey,” said Noel Baker, fresh frozen meat category manager at AFS.

“It has been successful, because it keeps us out of the price wars on turkeys. I think it's going to be even more evident this year, because our cost from last year to this year is about 18 to 22 cents higher on frozen whole birds, which is significant on a 24-pound bird.”

The Turkey Bucks look like Monopoly money and have UPC bars that can be scanned at checkout, just like coupons. In addition to turkeys, the coupons can be used for other designated items throughout the store.

ShopRite stores, Edison, N.J., are offering a similar Thanksgiving promotion for their Price Plus club card holders. Those who spend $300 from Oct. 19 through Nov. 27 are awarded a free turkey, ham, turkey breast, kosher chicken or lasagna. Or, shoppers can get the equivalent savings on a per-pound basis toward the purchase of any other ham, turkey breast or whole turkey, including kosher turkey items.

Basha's, Chandler, Ariz., has a program where shoppers who spend $250 to $399.99 can get a free turkey up to 15.9 pounds.

Even though this type of promotion has been around for many years, it is still an effective way for retailers to capture the loyal consumer's dollar, even if it is only during the holiday season.

“It's been done for years and years and works pretty well,” said Jim Wisner, president of Wisner Marketing, Libertyville, Ill.

“You can kind of lock the customers in over a period of time by saying ‘if you spend X amount, we'll give you a free turkey.’ I think the main thing that stores are after is buying customer loyalty during that time of the year, because it is a time of year where folks are spending the most money on food at home.”

But even as shoppers tighten their budgets and seek out money-saving loyalty promotions, the holidays also present an opportunity to offer value through convenience.

“Retail meat departments that offer free complementary prepared foods items, such as side dishes for those who order big-ticket meat items like turkey, would be one way to ‘give back’ to struggling consumers trying to cut costs anywhere they can,” Richardson of The Hartman Group told SN.

Value-added meat products and bundled deals in various forms could appeal to the time-starved shopper.

“I think what you see in meats, you see more prepared, ready-to-go, ready-to-heat, ready-to-serve — each year you see more and more of that in the case,” Wisner said.

“For the retailer, those are typically more profitable approaches. We may see more bundled deals — get the turkey and this and that and everything else, here's everything you need for four people. And whether it be prepared [foods] or [bundled] ingredients, there seems to be an increase in those kinds of promotions every year.”

Offering shoppers holiday recipe ideas, and then cross-merchandising meats with all of the ingredients needed for those recipes, is an effective way to capture shopper interest, save them shopping time and encourage them to purchase ingredients that they may have not considered otherwise.

“That seems to be the avenue that is most effective,” Wisner said.

“I was in a Wegmans last week, and with Columbus Day coming up, they had a whole thing about an Italian pot roast recipe. All the ingredients and all the Wegmans Italian Classics were there, displayed right above the meat case.”

Similarly, Wisner said, supermarkets could consolidate in a meat department display all of the products needed to prepare a traditional Thanksgiving turkey, such as stuffing mixes, spices and other items.

Guiding shoppers from the meat department to Center Store with bundled coupon offers is another effective option for supermarkets to offer a sense of value, according to Richardson.

“Promote coupons for complementary Center Store basic ingredients that are used on traditional holiday meals, to temper the effect of the rising cost of meat in general,” Richardson suggested.

“[These offers] should be recipe-driven, not random ingredients. In other words, you're connecting with a recipe in their head and saving them money on an ingredient [like sauce or marinade]. When it comes to ingredients, they may be willing to trade down to private label, especially with good couponing and cross-merchandising. It makes no sense to encourage trade-downs in key fresh categories like meat or produce. It will hurt the brand eventually. Private-label ingredients like cranberry sauce are another story.”

Wisner agreed, saying premium private-label products would do well; although shoppers still seek a quality holiday meal experience, he said, they may not be as willing to spend as much on specialty products as they have in the past. “Particularly with the range of premium private label that has been introduced over the past year, find ways to incorporate those products and to encourage trial with new recipes and new dishes. Because this is a time of year that people will trade up a little bit, it is another opportunity that certainly we should see more of,” he said.

Wisner also noted that not only are Thanksgiving and Christmas opportunities for retailers to offer holiday meat promotions, but also Christmas Eve and New Year's. These additional holidays also provide opportunity for retailers to market and promote new ideas to shoppers.

“Finding some things to do that perhaps are a little different or perhaps suggest meal ideas could also work well, as opposed to just showing up and saying ‘We've got turkeys on sale,’” Wisner said. “We're seeing retailers doing a better job at that. Certainly, there's more recipe-driven promotions than there used to be in the stores.”

Regardless, Baker of AFS noted that while meat prices have been on the rise, turkey is still a relatively inexpensive way to feed a large number of people.

“If you think about it, if you even bought a turkey for 99 cents a pound, that's relatively inexpensive protein compared to a rib-eye steak or even a spiral ham,” Baker said.

“Shrimp, seafood — people will probably cut back on stuff like that. But for the most part, I think a turkey is a relatively inexpensive way to feed your family.”

Baker added that if meat and poultry prices remain high next year, AFS will probably look at bringing in some smaller turkeys to ease the sticker shock of larger, 24-pound birds.

“What I think is going to happen is, instead of consumers buying two or three turkeys, they're only going to buy one,” Baker said.

“I just don't see the super, super low prices that you've seen in the past. I think there will still be good values out there, and smart shoppers, they'll still find the value — they'll just have to look a little harder.”