Consumers are looking for a letup in pricing at the grocery store, and value retailer Save A Lot is working to provide it.
In May, the food-at-home Consumer Price Index jumped 11.9% year over year, vaulting the 10.8% increase in April and marking the largest uptick since the 12 months through April 1979, according to the U.S. Bureau of Labor Statistics. That came after hikes of 10% in March, 8.6% in February and 7.4% in January.
“The data that we’re seeing shows that there’s no relief [from inflation] in sight, and we can expect this to continue through at least the middle of next year,” Tim Schroder, chief sales and marketing officer at Save A Lot, told Supermarket News in a podcast interview.
For many shoppers, store brands are providing an avenue to lower their food bill. FMI-The Food Industry Association recently reported that 40% of consumers have purchased more store brands since before the pandemic, and three-quarters of those shoppers will continue putting private brands in their cart.
Photo: Tim Schroder, chief sales and marketing officer at Save A Lot
And last week, a study by e-commerce platform Jungle Scout found that 48% of shoppers are more likely to shop a brand offering consistently lower prices. The study also found that consumers’ willingness to switch to a new and more affordable brand rose 12% quarter over quarter.
“Costs continue to rise, and [customers’] disposable income remains flat. How they’re responding is by cutting items out of their baskets. So the overall units per transaction (UPT) is down across the industry and within Save A Lot, as consumers have to take more items out of their cart to stretch those dollars. All of this is really why we’re seeing an increased interest in private label as a whole as a way for customers to save. Ultimately, it represents a big opportunity for us at Save A Lot.”
To that end, Save A Lot is well-positioned. About 70% of the St. Louis-based grocery banner’s sales are private brands, and this month the chain kicked off a summer promotion that pits an assortment of seasonal items against comparable national-brand items. A selected basket of eight items offers customers an up to 45% savings. Save A Lot-exclusive brands such as J. Higg’s, Sunny’s and Grissom’s are starring in new ad spots that compare the products to well-known national counterparts to show how “A Lot Alike” they are but with a sizable savings.
“We’re targeting consumers via 15-second streaming TV spots as well as in-store, circulars and across all our social media channels,” Schroder said. “It’s part of the overall marketing approach of our brand refresh.”