Sweetbay: We’re Cheaper Than Publix

Jul 23, 2010

By George Anderson

Sweetbay has an uphill battle going up against Publix in
Florida but it’s looking to gain an edge with a new ad campaign that sends
a straightforward message: its prices on like items are lower on a day-in and
day-out basis.

The Delhaize-owned chain is using a list of more than 700 products
to point out where it has the price advantage. According to a Tampa Tribune report,
60 items chosen by Sweetbay totaled $172.50 if
bought in its stores. The same items at Publix were said to cost $196.71 and
$204.29 at Winn-Dixie.

Sweetbay is relying on an everyday pricing approach to battle
the impression shoppers get from the deep
deals offered at competitors’ stores.

"BOGO deals may cost less every once in a while," Geoff Waldau,
vice president of merchandizing for Sweetbay Supermarkets, told the Tribune. "But
we’re saying that if customers shop with us over time, they’ll save week-in,
week-out on the things they actually want to buy."

One of the strengths
of Sweetbay’s approach is that it is does not have the lowest price on all
items all the time. Ads have pointed out where Publix was cheaper on snack
items and paper goods.

Publix, for its part, doesn’t support Sweetbay’s comparison
as being fair. It points out that its rival may be "cherry picking" items
to show an advantage. Chain officials point out that stores may have over 60,000
items so comparing 700 is just a fraction of the whole.

Shannon Patten, a spokesperson
for Publix, told the Tribune that customers "find
great value in our weekly sales, get excited about our BOGO items and genuinely
appreciate saving money on the items they use most."

Bob Goldin, executive
vice president at Technomic, said of the Sweetbay campaign, "The
consumer is so very price conscious now, I think they have to do it."

Discussion Question: What do you think of Sweetbay’s approach to gaining market
share in Florida?

[Editor’s Note] The Tampa Tribune article points out that Wal-Mart,
a growing factor in the Florida grocery market, is not included in Sweetbay’s
price comparison.

Please practice The RetailWire Golden Rule when submitting your comments.

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14 Comments on "Sweetbay: We’re Cheaper Than Publix"

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Dr. Stephen Needel
11 years 9 months ago

As the note at the end points out, it doesn’t include Wal-Mart. Nobody expects Publix to be less expensive–it’s not why people shop at Publix. If Sweetbay wants to play that game, they’ll be the ones to get crushed if Wal-Mart gets aggressive in the FL market (because they will be more expensive than WM). Bad strategy.

Steve Montgomery
11 years 9 months ago

The question isn’t who has the lowest prices; it is who can create that perception in the consumers mind. As we often tell clients the consumer’s perception is the reality you have to deal with.

Market basket comparisons have been around a long time. In many cases, they have proven to be an effective tool to persuade consumers that one retailer is less expensive than another is. There is no question the company claiming to have the lowest prices can influence the outcome by selecting certain items and/or selectively choosing the competitors for the comparison.

Managing the consumer’s perception of your pricing/value proposition is vital in the world today. Market basket comparisons are one tool that can be used. The danger is that someone like Wal-Mart, which was not included, uses that same list in its ads and shows that it is even less expensive.

Paula Rosenblum
11 years 9 months ago

Terrible strategy. The strategy of desperate men.

Publix is not shopped because it’s the lowest cost supplier on everything. People shop there because it’s close enough with excellent service.

And as Stephen points out, this only begs comparisons to Walmart, and Sweetbay won’t win there. In a price game, the dollar stores will win on a LOT of items.

So 20th century!

Herb Sorensen, Ph.D.
11 years 9 months ago
Assuming they have the full purchasing power of Delhaize behind them (Food Lion, Hannafords, etc.) taking on Publix might make sense. Not so much with taking on Walmart, if they are in the fray. At the end of the day, shoppers are not nearly as focused on price as is commonly thought. On a conscious level, price always comes to the fore, whether interviewing shoppers or having a discussion with brands or retailers. This is because, consciously, everyone is trying to at least sound rational. However, shopping is very far from rational, and pricing plays a very small part in most shoppers’ regular shopping trips. As long as the store has a value image, other factors will control. Perceived value is far more important than price, to all but the aggressive bottom-feeder shoppers, that every retailer would be better off losing. This puts a whole different spin on price. The most important role of price is not to tell shoppers what this will cost them, but what it is WORTH! That is the value proposition,… Read more »
Richard J. George, Ph.D.
11 years 9 months ago

Sweetbay appears to be underestimating customers and competitors. If you are going to emphasize price, you need to be the lowest price provider. The price market is owned by Walmart and the quality/service market is owned by Publix. How does Sweetbay expect to be positioned–as the almost low price alternative to Walmart or as the almost high quality/service alternative to Publix?

There is no longer a market for food retailers that everyone likes a little. There is only a market for food retailers that someone likes a lot. Sweetbay is positioning itself in “nowhere land.”

David Livingston
11 years 9 months ago

I think Sweetbay will eventually throw in the towel and move on. My guess is that most consumers already are well aware that Sweetbay’s prices are lower than Publix–and the consumer couldn’t care less. Unless Sweetbay is going to be lower than Wal-Mart, nobody cares.

People don’t shop Publix because of price. They go for the experience and customer service. As long as Sweetbay is run by a publicly held company rather than an employee owned company like Publix, Sweetbay is pretty much helpless. All Sweetbay can do at this point are lateral moves such as this. The result will be the same which is they are pretty much doing the same business as before.

Ed Rosenbaum
11 years 9 months ago

Sweetbay has their work cut out for them. They are not the first to go after Publix and they will not be the first to win the one-on-one battle. But let’s remember, there are other players in Florida even though Publix is considered the “home team.”

We also can’t underestimate Walmart. We have found some savings on certain items at Walmart and do take advantage of it.

People do not shop at Publix expecting them to be the lowest priced market. People shop at Publix for the warmth of feeling that it is truly “their neighborhood store” and the product they want will be there. That is what my wife thinks. Don’t even try to tell her she has to shop elsewhere. We know the managers by name and see them out in the community.

So bring it on Sweetbay. I promise you, Publix is more than up to the challenge.

Michael L. Howatt
Michael L. Howatt
11 years 9 months ago

I believe we are all in agreement that this is smoke and mirrors. A better strategy for Sweetbay would to be priced lower on “themed” items to make it a destination. Things such as, “Come to Sweetbay for your picnic, condiments, BFY, items” which are always lower. That would at least create a niche’ for them moving forward.

Bill Hanifin
11 years 9 months ago

The Florida grocery market needs more competition, period.

Publix has survived the failure of Winn Dixie and near disappearance of Albertsons, leaving them in sole possession of “quality grocery shopping” in Florida. As a result Publix has been allowed leeway by the market on their prices. Walmart clearly owns the price advantage as we know, but shopping at a Super Store is not for everyone.

Walmart has wisely created an alternate “personality” and has mildly encroached the Publix domain by opening some neighborhood stores which offer an enhanced shopping experience and quality fresh produce.

Sweetbay probably can’t compete on price with Walmart and I’m not sure if they are inclined/able to compete on the experiential level.

I’m not aware of the chain having locations in South Florida, a key population area, and am therefore unsure if anything they do would matter much to the Publix execs in Lakeland.

Bill Bittner
Bill Bittner
11 years 9 months ago

The EDLP verses Hi-Lo pricing models are always at odds with one another and price is always a tough factor upon which to base your image. Customers are great at taking advantage of retailers who are not efficient enough to win a price war. They will take advantage of the retailer who is giving away groceries and boost the retailer’s top-line while losses mount. As the retailer returns to a price level that allows them to stay in business, covering their operating costs, the customers will move to another retailer.

I think price alone cannot win customers. It takes a combination of good locations, good employees, and promotion programs (i.e. continuity programs) that encourage consumers to come back.

But as the article mentions, they did not compare Walmart. That is one company who has made price a critical factor and has won by using it.

Craig Sundstrom
11 years 9 months ago

I agree with the other commentators here that SB seems to be in that difficult position of being neither fish nor fowl (i.e. they lead in neither price nor service), but I don’t agree that it’s a mistake to try and capitalize on this: it’s a risk, sure, but what alternatives are there? (What I really got from this discussion, though, was how much non-Floridians must be missing out by not having a Publix nearby…it sounds like the a grocery Eden!)

Mark Johnson
Mark Johnson
11 years 9 months ago

Publix is not focused on less expensive. They are focused more on shopper marketing, insight and commitment to customer service. Price is not always king.

Mike Blackburn
11 years 9 months ago

Maybe the idea of this ad isn’t supposed to be a direct hit to Publix, but rather allow Sweetbay to compare itself to its better perceived competitor, while promoting its lower prices. Capture more of the lower-end crowd who may not shop Publix, because of the higher perceived pricing, creating the perception these shoppers are stepping up while still getting a bargain….

Justin Time
11 years 9 months ago

I think the point being missed here is that Sweetbay wants to compete in price, as a fresh grocer.

Walmart is NOT a fresh grocer. Publix has Greenwise Markets, and both Sweetbay and Publix can compete with Whole Foods on price, given they all have the same quality. Delhaize already competes this way in niche markets on the East Coast with Bloom and Hannaford against the likes of The Fresh Market.

All things equal, maybe Sweetbay is onto something. Only time will tell.


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