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.

Summary:

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.

Retail Innovation Memo: Piggly Wiggly Carolina's Innovative, New 'Consumer Intuitive' Format Pilot Store to Open on April 3

Piggly Wiggly Carolina Co., the South Carolina-based grocery company which is one of Piggly Wiggly LLC's largest franchisees, is set to introduce an innovative new grocery retailing format when it opens a pilot supermarket on April 3 in Myrtle Beach, South Carolina.

Piggly Wiggly Carolina Co. is a wholesale and retail grocery company. It currently operates about 100 Piggly Wiggly banner supermarkets. About 60% of the stores are company owned. The other 40% are owned by independents, who have a franchise agreement with the company, and buy all of their grocery products from the wholesale division.

The 100 Piggly Wiggly banner supermarkets are located across South Carolina and into South Georgia. Piggly Wiggly Carolina Co. is the largest privately-owned, family-operated company in South Carolina. It had sales of about $700 million in 2007 and currently has 5,000 employees. The grocery company also owns a real estate firm, a printing company and a couple of other related enterprises.


Piggly Wiggly LLC is a supermarket franchise, retail support service and marketing company. It's affiliated with C&S Wholesale Grocery Company. Piggly Wiggly LLC licenses the Piggly Wiggly banner to over 600 supermarkets in the U.S. and provides retail, marketing and advertising support to the franchisee stores (or groups like Piggly Wiggly Carolina Co).


Piggly Wiggly is calling its new, pilot format, the first completely restructured grocery store format designed to fit how people intuitively shop. The focus of the "shopper intuitive" format is to make shopping easier for customers and to...well, make the shopping experience more like it is in the mind of the shopper (intuitive).


The premise of the new format store's interior is to create a natural flow rather than use the conventional strategies common in most stores today which are thought to make shoppers stay longer in the store and as a result spend more money.


For example, similar or "like" grocery products will be grouped together in the new-format store--cereal and milk, fresh, frozen and canned fruits and vegetables, coffee and creamers, breakfast items like eggs, bacon and butter, for example--rather than in the common supermarket merchandising scheme in which these various categories and items are spread throughout the core and perimeter of the store on grocery shelves and in refrigerated cases.


The innovative, new Piggly Wiggly supermarket format also will have a large, open kitchen in the center of the store as its focal point. Professional chefs will prepare recipes throughout the day and evening for store shoppers, who can watch and linger in the store kitchen as often and as much as they desire.


Another innovative feature of the pilot store format are what the grocer is calling "one-stop meal stations." This merchandising element--which is a companion to the "logical" or intuitive merchandising plan mentioned above, in which like products are merchandised together--will feature "meal solution" stations in which items like hamburger, hamburger buns, chips, soda pop, beer, pickles and condiments will be grouped together on a regular basis.


Supermarkets have built "meal solution" displays like this for decades. However, what makes it somewhat different and innovative in the new Piggly Wiggly format is that the "one stop meal solution stations" will be numerous and permanent--and are part of the store's entire "like product" merchandising philosophy rather than the common practice of grouping items by category and how they are packaged and sold (eg: dry grocery, frozen, refrigerated, fresh and the like).


The store will look much different to shoppers and others in that unlike the majority of U.S. supermarkets which tend to have all the fresh (produce, meat, bakery, deli) and perishable categories around the store perimeter, and dry grocery in the core of the store, the new format Piggly Wiggly will mix dry grocery and fresh and perishable categories throughout the store. It's all based on the premise of shopper flow rather than perimeter/core of the store theory and practice.


In fact, the store's design and decor will be different than the common U.S. supermarket model as well. There are so many different formats and store designs in the U.S. today--from zero-frills warehouse stores to European Market Hall style upscale food emporiums and more--that using the term "common" is best defined as the standard box, which still is the majority design element for American grocery stores.


The Myrtle Beach pilot format Piggly Wiggly supermarket will be very "homelike inside". The store's floors will be all hardwood, the center-store demonstration kitchen is designed to look upscale yet homey, and soft lighting and residential-like accent colors will be used throughout the store's interior. The supermarket's exterior will reflect this theme as well. We call it sort of an "Upscale Homescape" design.


The store's location in the seaside city of Myrtle Beach should be a good test for the pilot intuitive supermarket format. The city is fairly upscale in its demographics but also includes a substantial middle-class population. The city also is a major tourist area which draws visitors from throughout the U.S. (especially the south and the east coast) and many from overseas as well.


Piggly Wiggly Carolina Co. tells us they plan to use the pilot, new format supermarket in two ways. First, they want to see which design and merchandising elements work the best in it and use them when they remodel existing supermarkets. Second, they want to study the "intuitive" format, make changes if and as needed, and then be able to use it as a model format for new supermarkets. If it works as well as the grocer thinks, and is successful, they plan on building more supermarkets using the new format and merchandising scheme.


There are a number of grocery chains--Whole Foods Market, H.E. Butt in Texas and others--that have built stores using a similar intuitive design and merchandising approach to varying degrees. For example, last October Whole Foods' opened its European Market Hall-style food store in Oakland, California, which uses a similar intuitive and natural traffic flow-based, rather than traditional, design and merchandising philosophy in it.


What makes the Piggly Wiggly Carolina Co. format prototype innovative though are two things: First, it's an attempt to redesign the conventional (albeit in this store's case a somewhat upscale format) supermarket format and merchandising scheme completely; to turn it on its head if you will. This is the case because the pilot store changes the central conventional supermatket merchandising premise--which is fresh and perishable products on the perimeter, dry grocery in the core of the store--entirely with its "like product" grouping merchandising scheme throughout the store.


Look at it this way: Since Piggly Wiggly Carolina Co. is not known as a trail-blazing specialty grocer like Whole Foods Market, Wegmans or H.E. Butt, for example, its designing and opening a supermarket with such a paradigm-shifting format and merchandising scheme could actually have more influence than the format innovations these cutting-edge grocers do because Piggly Wiggly is considered more in the mainstream of traditional supermarket retailing than the others are.


The argument might go something like this: (Conventional grocery chain executive): "Well, of course Whole Foods Market, H.E. Butt and Wegmans Food Markets' create these innovative formats...But we aren't Whole Foods, H.E. Butt or Wegmans; we're a more mainstream grocery chain."


However, perhaps if a more mainstream grocery chain like Piggly Wiggly Carolina Co. makes such a format paradigm shift, these majority retailers will take notice. (Conventional grocery chain executive now): "A chain like us did what? Grouping together similar or 'like' items regardless of whether or not they are in cans, frozen or refrigerated? Well... if Piggly Wiggly did it, maybe we should take a look at it."


Further, it's the grocer's goal--if the format is a success and even if it needs some tweaking after the first store opens--to use the new format for most if not all of its future new stores. Doing this would represent an interesting change in basic supermarket design, format development and merchandising in the U.S. It also could lead to other mainstream (rather than specialty grocers which Piggly Wiggly is not) grocery chains adopting the format innovation completely or in parts.


Readers shouldn't be too surprised that its a Piggly Wiggly franchisee--Piggly Wiggly Carolina Co.-- that's being so innovative. Why?


A little supermarket industry history: the first Piggly Wiggly grocery store was founded in Memphis, Tennessee on September 6, 1916 by a man named Clarence Saunders. This was the pre-self service supermarket era. In fact, the term supermarket had yet to be coined in 1916.


In those days, customers handed their handwritten grocery order to a store clerk who then filled the order, added it up, and put it in a cardboard box for the shopper to take home. Full-service was not only the norm, it was the only option.


Saunders was a rather innovative, flamboyant and restless grocer according to accounts of his life. One day he decided the full-service system was a waste of time and man hours, so he developed what today (with some modifications) is the self-service system of supermarket retailing. To this day, nobody knows why Saunders chose the name Piggly Wiggly for his store, which became a grocery chain, by the way.


{Note: Michael Kullen, founder of the New York-based King Kullen supermarket chain, also shares credit for inventing the first supermarket and self-service scheme, although most believe Saunders was first in terms of actual self-service.}


So, as you can see, Piggly Wiggly does have some historic claim to innovation. Piggly Wiggly also is generally credited with coming up with the first supermarket checkstand to go with that self-service system creation. The grocer also generally gets credit for introducing the first supermarket shopping cart on wheels


Other innovations for Piggly Wiggly include being one of the first (if not the first) grocers to merchandise some fresh produce items in refrigerated cases to prolong the products' freshness. Prior to this innovation it was commonplace to merchandise all produce items on a dry rack.


Piggly Wiggly also is credited as being one of the first grocers to: introduce uniforms for store clerks, create a high-volume/lower-profit margin retailing scheme, offer a full line of nationally advertised grocery brands, and franchise independent grocers to operate under the self-service supermarket model that's so common today.


Therefore, as you can see, Piggly Wiggly Carolina Co. is following in the well-proven Piggly Wiggly history of grocery retailing innovation by creating its new, "intuitive-style" supermarket format.


Even though the grocery chain Charles Sounders founded and used as a format and merchandising innovation incubator is now an independent grocer franchisee, retail support and marketing company rather than a company-owned supermarket chain like it used to be, we think he would be pleased to hear about the new, innovative retail supermarket format and merchandising scheme that franchisee Piggly Wiggly Carolina Co. is set to open on April 3.