Sunday, February 1, 2009

Promotional Merchandising Memo: Whole Foods Market's Super Bowl In-Store Promotional Merchandising Message: 'Value'

Merchandising: Super Bowl Sunday is 'Game-Day' For Food Retailers

Today, Super Bowl Sunday, is America's most "official" unofficial holiday. It's celebrated by more Americans -- who either gather around the living room or family room TV with family and friends, the coffee tables filled with snacks and beverages, or go to a pub or pizza parlor to view the game there with a gang of fellow celebrants -- than probably all of the official or federal U. S. holidays accept Thanksgiving, Christmas and New Years.

And a small percentage of Americans, as well as even a few folks from other nations, travel to wherever the Super Bowl is being held in order to watch the big game live. And in Tampa, Florida, where this year's Super Bowl is being held, it's a two or three day (OK, even four days for some) "holiday celebration," with pre-game festivities that started yesterday and a full schedule of events leading up to the big game later today.

For those watching the game at home, at a pub or live at the stadium, the celebration doesn't usually end when the game is over either -- it tends to go on until late Sunday night. The Super Bowl is an "event" that happens to include a major football game along with it rather than a football game that also has some celebrating before and after it.

Super Bowl as a retail merchandising promotional event

Super Bowl Sunday is a major merchandising and promotional event for food and grocery retailers. Beginning early in the week, leading up to today's game, grocers bring out their Super Bowl Sunday in-store displays -- snack foods, beverages, prepared foods, snack-related fresh meats and produce, non-foods, you name it -- and signage. Most retailers also focus and lead their weekly advertising circulars (and Web sites) and other media on Super Bowl Week with game related food, beverage and related items.

The event offers a great opportunity for food and grocery retailers to sell lots of higher-margin impulse items -- and more items in general -- that they would normally be able to sell in late January and Early February were the Super Bowl not happening. But because it is happening today, Super Bowl Sunday week is a grocer's (sales) holiday as well.

A pre-Super Bowl field trip to a few Whole Foods Market stores

Since Natural~Specialty Foods Memo (NSFM) has been writing regularly about Whole Foods Market, Inc.'s battle against the U.S. Federal Trade Commission's (FTC) legal challenge to overturn its friendly 2007 acquisition of Wild Oats Market, Inc. (just scroll down the Blog for numerous recent posts and links to past posts), along with the natural grocery chain's struggles of late, including a 71% drop in its stock value over the last 52 weeks, a 40% drop in quarterly income in its last reported fiscal quarter, and other negatives, we decided to visit and check out a few Whole Foods Market stores and see what the leading natural-organic foods' class of trade retailer in the U.S. was up to in terms of Super Bowl Sunday in-store merchandising and promotional activity.

Therefore, on Friday and Saturday we visited a number of Whole Foods Market stores, our eyes and merchandising radar focused on Super Bowl-related in-store merchandising and promotional themes, concepts and product displays.

Below are the highlights of what we found during our field trip:

~First, Whole Foods Market is using an overall theme of "value" in-store with its Super Bowl Sunday promotions and product displays. Regardless of the product displayed, there is a tie-in to the natural grocery chain's ongoing "value-based" merchandising and marketing that it started last year.

For example, in a number of Whole Foods stores we visited, the stores' prepared foods departments were featuring party platters marketed as "Ready to Save Value Packs." The value packs, which included ready-to-heat-and-then-eat Buffalo chicken wings, deviled eggs, celery sticks (no heating on those two, just ready-to-eat) with dipping sauce and other related game day snacks, were placed in dedicated freestanding coolers in both the prepared foods departments, as well as in other parts of the store. The message and pricing was all about "value." The "value pack" items were basics rather than gourmet fare, as described above.

~Value also was apparent in the choice of displays throughout the stores. Many of the Super Bowl-related food and beverage items we saw in the stores were Whole Foods' private label products, including its more "value-oriented" "365-Everyday" store brand. The store brand was discount priced (with signage indicating that fact), and in many cases the retail prices were comparable to similar conventional game day food and drink items being promoted at conventional supermarkets nearby the stores. The Whole Foods private label product displays were all over the stores -- on end-caps, in the aisles, ect. The message was one of "value," be it the pricing on a jar of natural salsa, a package of snack chips or on a can of olives.

~We also noticed Whole Foods' heavily promoting natural snack items from big company vendors like PepsiCo's Frito Lay. Two of the stores we toured had massive "in-aisle" displays of the company's Stacy's brand All-Natural Pita Chips, priced at a substantial discount. The message: "value."

~Pretty much all of the branded and private label snack, party food, beverage and related game day items displayed in the stores had a "value theme." And instead of numerous higher-end or premium organic items like we saw during last year's Super Bowl displays in Whole Foods' stores, this year there was a real focus on more basic and more inexpensive "value-oriented" items, this included reduced-priced micro-brew beer brands as well, rather than numerous higher-priced craft beers like we observed last year.

~In terms of Super Bowl themes and signage, we noticed in-store signs and banners featuring "game-day" slogans and tag lines such as: "It's Game Time," "Get in the Game" and "The Game Plan." The signage took the form of hanging ceiling signs, shelf talkers, display headers, posters, aisle violators and more. No two stores had the exact same signage or combination of signs, which makes sense because of Whole Foods' decentralized merchandising philosophy and program.

~We also saw lots of creativity in the stores around the Super Bowl theme, everything from graphically attractive hand-lettered and hand-drawn signage to more commercially-produced graphics, as well as a mix of both in a couple stores we visited.

~We also observed lots of great cross-merchandising tie-ins -- snacks and beverages, cheeses and crackers and the like. In one store we liked a display that incorporated non-foods items like eco-napkins, eco-cups and other related items with snacks and food and beverage items, all tied-in on the display with signage touting the value message.


It's apparent to Natural~Specialty Foods Memo (NSFM), based on the Whole Foods Market stores we visited, that the natural grocer gets it that it needed a value proposition and message for its Super Bowl promotion this year, which is something all retailers, of all formats, need this year in this severe recession, in our analysis.

We found the particular focus on the Whole Foods' store brand items in the displays interesting but not surprising. There's a much more extensive representation of the store brands, particularly the "365-Everyday" value brand, this year in the stores compared to the Super Bowl Sunday promotional displays we saw last year. We aren't surprised because it is with these store brands, especially "365-Everyday," along with branded natural and organic items from bigger suppliers who offer greater promotional allowances, where Whole Foods can best make its 'value statement" (read price-impact) right now, in most cases.

But the stores we visited also had numerous artisan and specialty brands displayed as well, particularly in cross-merchandising-type displays. These included cheeses, craft beers, sodas-beverages and a number of other game-day related food and drink items. These higher-margin items, cross merchandised among lower-priced ones, can, if bought by shoppers, add some margin enhancement for a grocer. And because the Super Bowl is such a once-a-year "special event," many shoppers (mostly men) likely splurged a bit and bought the higher-end items, even though they might have kicked themselves (or were kicked by the significant other) for doing so later at home.

Lastly, we noticed shoppers gravitating considerably to the "value oriented" Super Bowl displays, grabbing multiple items in the snack, prepared foods value pack and other displayed selections. it was clear to us in observing, that these shoppers were responding to the "value message." After all, most of us have to right now. And grocers, regardless of format, need to emphasise "value" at every turn, in our analysis.

We don't know how good overall pre-Super Bowl Sunday (and Super Bowl Sunday) promotional sales were this year for Whole Foods Market -- and the individual stores won't know until the end of business today -- and the grocery chain eon't know fully until Monday morning.

But based on the "value-oriented" themes we found in the stores we visited, along with the numerous reduced-price displays in those stores, it's likely Super Bowl-related sales for the natural grocery chain will be much better for the Super Bowl event this year than had the grocer not focused so much on the "value proposition" and the more "value-based items" in its stores for 2009, instead of promoting more higher-end and premium products and themes. Doing the former ("value-based") could portend a good Super Bowl event selling weekend for Whole Foods Market.

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