Premium Essay

Superior Supermarkets

In: Business and Management

Submitted By maikeyboy
Words 1216
Pages 5
Superior Supermarkets Memo

Memorandum

To: James Ellis, President of Superior Supermarkets

CC: Randall Johnson, District III Manager of Superior Supermarkets

From: Matthew Clemente

RE: Potential Everyday Low Pricing Strategy

Date: April 9, 2010

The challenge presented to the President of Superior Supermarkets James Ellis and his district manager Randall Johnson is whether or not to implement an everyday low pricing strategy to the Superior Supermarkets stores in Centralia, MO. Superior Supermarkets’ current pricing strategy is a high-end branding strategy, giving them the highest prices in Centralia. With their declining market share the past seven years (they currently have 23% market share in 2002, down from 31% just three years ago; see Exhibit 2) Superior Supermarkets looks to increase their rising revenues from the past three years (Exhibit 4), regain their past successful market share and maintain their already successful contribution margin. To accomplish these three goals, there are several alternatives that Superior Supermarkets could employ to help them retake the market in Centralia. The three locations of Superior Supermarkets in Centralia certainly give them precedence in location, but their market share should certainly be higher with the various options of location they give their customers. However, customers in Centralia are certainly price-sensitive and a new pricing strategy must certainly be considered to give Superior Supermarkets the best strategic position in this region of Missouri. A lot of valuable information can be inferred upon from Superior Supermarkets telephone survey results, which interviewed 400 Centralia residents. As seen in Exhibit 6, although Superior Supermarkets is ranked as the most convenient food store in Centralia and among the best in store service, they are ranked last in terms of most reasonable…...

Similar Documents

Premium Essay

Superior Supermarkets Everyday Low Pricing

...Superior Supermarkets (SS) is a division of Hall Consolidated, a privately owned wholesale and retail food distributor. Hall distributes food and related products to some 150 company-owned supermarket units and about 1,100 independent grocery stores in the U.S. through 12 wholesale distribution centers. Superior is the smallest of the three supermarket chains owned by Hall, with sales of $192.2 million in 2002. Sales of three Centralia stores were $14,326,700 in 2002. Randall Johnson, the District Manager for the Centralia stores, has recommended that they implement everyday low pricing (ELP) since Superior’s prices are higher than the competition at a time of growing price consciousness, and that the price differential could cause them to lose market share. Problem Statement Superior Supermarkets (SS) must decide whether o not to pursue an everyday low pricing (ELP) strategy at its three Centralia MO locations. Analysis Three viable alternatives have been found. Alternative #1 is to do nothing. Do not adopt ELP and keep the current promotional budget. If market share continues to decline, at the growth rate of -0.53% or greater, this alternative would be deemed unsuccessful. Conversely, if market share remains stagnant or improves, this strategy would prove to be prudent. Alternative #2 is to implement a ‘limited ELP’ model. By marginally increasing the amount of loss leaders, the model could attract price-conscious customers at the margin. Under this model, the......

Words: 708 - Pages: 3

Premium Essay

Hi-Value Supermarkets

...HiHi-Value Supermarkets: Everyday low pricing General Overview NOTE***I included not only information specifically designed for the slides but also extra information that I will speak about. The information in parenthesis is what I will verbally add to my part of the presentation so don't worry about putting in the actual case presentation PPT. SLIDE: The Meeting > In early April of 2006, several members of Hall Consolidated meet with the District Manager of 3 Superior stores in Centralia, Missouri. (The agenda of this meeting was to disuss the districts progress and to address any issues related to the 3 stores.) > The District Manager proposed EDLP for his 3 stores. (The DM thought this was appropriate because he noticed their prices were higher compared to their competitors in the Centralia area. He also realized that consumers were becoming much more price conscious. Sales were also below quota for the 1st quarter of 2006.) > The EDLP strategy had been briefly discussed in August of 2005. (Although, they discussed the EDLP stratgey prior to the quarter meeting in 2006, they continued on with their current strategy) SLIDE: The Company > Hi-Value Supermarkets is a privateloy owned wholesale and retail food distributor. (HVS is a division of Hall Consolidated) > It is the samllest of the 3 supermarket chains owned by Hall Consolidated. > It was the number 1 or number 2 ranked supermarket chain in each of its trade markets.(This is measured......

Words: 369 - Pages: 2

Premium Essay

Superior Supermarkets. “Everyday Low Pricing”

...Business, University of Windsor Title of case: Superior Supermarkets. “Everyday Low Pricing” Key person and his / her position in the organization: James Ellis Senior V.P at Hall Consolidated and President of Superior Markets Key issue or decision that must be made: Should Superior Supermarkets implement the everyday low pricing strategy? If so, should this strategy be adopted across-the-board for all products or just certain categories? Basic facts of the case: Superior Markets is a division of Hall Consolidated, a privately owned wholesale and retail food distributor. Hall Consolidated was formed in 1959 and initially included a number of wholesale food operations and produce companies. The Superior Supermaket chain was acquired in 1975. Superior operates conventional supermarkets in trade areas that serve small cities and towns in the South Central United States. Centralia is the primary trade area in Scott County, which is located in central Missouri. Four grocery chain stores accounted for 85% of all food sales in Centralia in 2002. Three of the chains – Harrison’s, Grand American, and Missouri Mart – operated one store in Centralia, and Superior Supermakets operated three. Sales in the three Superior stores were divided as follows: grocery (50%), fresh meat, poultry and seafood (20%), produce (18%), seasonal and general merchandise (7%), bakery and deli (5%). Company officials believed that Superior stores offered a more limited......

Words: 1837 - Pages: 8

Premium Essay

Supermarkets

...Super Power for Supermarkets ICSA researcher Gillian Westbrook takes a closer look at the power of supermarkets In the current recessionary times, it seems that price wars for food are going to be an increasing part of the retail landscape. To gain competitive advantage, retailers respond by reducing prices, a strategy that suggests to the shopper that the retailer is making less profit on their goods than in previous times. Consumers are pleased to save a few euro on their weekly shop, and are probably blissfully unaware of just who is taking the hit for the price reduction. Farmers, however, know only too well from whom the margins are being sought. Producer margins have been eroding year on year, leaving many farmers reflecting on how the economics of their business seemed more attractive thirty years ago. The relationship between farm-gate price and the rising high levels of retail and supply concentration are not mutually exclusive and should not be underestimated. There have been many factors that have impacted on farm-gate prices. BSE for example, occurred at a time when there was a major shift in EU retail concentration and very likely created opportunities for retailers to exert their power over suppliers. Various aspects of market consolidation and issues concerning food safety have all had serious detrimental consequences to the farmer. Unlike BSE, however, the matter of eroding farm-gate prices and the power of the retailers to control prices has received limited...

Words: 2221 - Pages: 9

Premium Essay

Superior Supermarkets

...Superior Supermarkets Everyday Low Pricing In: Business and Management Superior Supermarkets Everyday Low Pricing Superior Supermarkets (SS) is a division of Hall Consolidated, a privately owned wholesale and retail food distributor. Hall distributes food and related products to some 150 company-owned supermarket units and about 1,100 independent grocery stores in the U.S. through 12 wholesale distribution centers. Superior is the smallest of the three supermarket chains owned by Hall, with sales of $192.2 million in 2002. Sales of three Centralia stores were $14,326,700 in 2002. Randall Johnson, the District Manager for the Centralia stores, has recommended that they implement everyday low pricing (ELP) since Superior’s prices are higher than the competition at a time of growing price consciousness, and that the price differential could cause them to lose market share. Problem Statement Superior Supermarkets (SS) must decide whether o not to pursue an everyday low pricing (ELP) strategy at its three Centralia MO locations. Analysis Three viable alternatives have been found. Alternative #1 is to do nothing. Do not adopt ELP and keep the current promotional budget. If market share continues to decline, at the growth rate of -0.53% or greater, this alternative would be deemed unsuccessful. Conversely, if market share remains stagnant or improves, this strategy would prove to be prudent.    Alternative #2 is to implement a ‘limited ELP’ model. By marginally increasing......

Words: 324 - Pages: 2

Premium Essay

3 Kinds of Supermarkets

...international school of business | The Necessities of Supermarkets | Applied Research | | | | Applied Research Project | Introduction In this contemporary life, people cannot survive without supermarket which is interrelated to the whole thing of people’s lives, such as food and clothing line. A supermarket is a outward appearance of grocery store, a self-service store offering a wide variety of food and household merchandise and organized into departments. The supermarket characteristically comprises meat, fresh produce dairy, baked goods departments, along with shelf space reserved for canned and packaged goods as well as for various non-food items such as household cleaners, pharmacy products and pet supplies. Most supermarkets also sell a variety of other household products that are consumed regularly, like alcohol, medicine, clothes and some stores sell a much wider range of non-food products. A supermarket is larger in size and has a wider selection than a traditional grocery store also selling items typically found in a convenience store but is smaller and more limited in range of merchandise than a hypermarket or big-box store. In this paper we divided supermarkets of the worlds into three categories: * Convenience stores also called corner store, a small store that stocks a range of everyday items such as groceries, toiletries, alcoholic soft drinks and tobacco products. * Regional supermarket, a superstore which is bigger than 3000......

Words: 3433 - Pages: 14

Premium Essay

Red Supermarket

...Reed Supermarkets – Action Plan Prepared by : Rishi Ranjan Reed Supermarket – Case Analysis Problem Statement : Meridith Collins, VP of marketing of Reed Supermarkets, is asked to increase the current market share of 14%(2010) to 16% by 2011.The following constraints are evident : 1. The market is fragmented with multiple players. 2. The operating margin is merely 2.1%, no scope of any error. 3. No investment plan for increasing the no. Of stores. Options available: 1. Increase margin/increase revenue – It will increase profitability. 2. Introduce Niche products – Healthy food items, organic products. 3. Increase operating efficiency – It will lower the operating cost. 4. Loyalty programs – It will help in retaining the customers. 5. Introduce mid-range products – It will attract non-affluent consumers. 6. Make tie-ups with corporate houses/ partners – It will add to the consumer base that may remain loyal. 7. Convert to Dollar store/ open dollar stores as a separate brand – New brand. 8. Introduce private labels – New range of products. Recommendations: 1. Closure of Dollar Special service – As per the given data, the Dollar special products were being offered at a price 44% lower than the average price which was not generating money at all. Infact it was creating a loss of 80%.Also this Dollar scheme had hit the image of Reed (Quality product seller). 2. Reed customers were older and affluent players, so Reed should extend its services further to......

Words: 619 - Pages: 3

Premium Essay

Superior Supermkts

...Case; Superior Supermarkets “Everyday Low Pricing” Company background; * Superior supermarkets is a division of Hall Consolidated, a privately owned wholesale and retail food distributor, Hall formed in 1959 and distributed food and related products to 150 company-owned supermarket units, operating under three supermarkets chain names through 12 wholesale distribution centers in US, its sales in 2002 were 2.3 billion *The three Superior supermarkets are located in Centralia-Missouri, Everyday Low Price Policy; A retailer charges a constant lower everyday price for merchandise with few, if any, price discounts, this practice differs from a “Hi-Lo” price policy, whereby a retailer charges higher prices on an everyday basis, but then runs frequent promotions. The Goal of the Superior Markets new approach “Everyday low price”; 1-Superior’s prices were higher than the competition 2-Superior could lose market share due to the price differential and accordingly losing its second position “Market challenger”. Everyday Low Pricing Implementation Considerations; *All of the Hall executives acknowledged that Superior Supermarkets were rightly perceived by shoppers as having the highest prices *Whether or not to adopt this pricing strategy across-the board for all products or just certain categories? *The pricing itself and how much it should be lower? As the studies showed that their market-basket prices were always 7-10% higher than other......

Words: 706 - Pages: 3

Free Essay

Supermarket

...crashing cymbals. Shelf stackers dissolved into the chaos. A boa constrictor’s victim, trapped in the reptile’s stomach, would have had more room to breathe than here; it truly was as busy as a hive full of bees rushing to make honeycombs for their queen. All the while, the bakery and rotisserie battled it out with each other to grab customers; they reached out in smoky tendrils of alluring aromas. Freshly baked bread, hot and crisp, mesmerised countless... but who could resist the delectable taste of honey roast chicken, tender and succulent? Elsewhere, employees scurried around about like squirrels readying themselves for winter – customers’ every need were tended to with the standard impassive, teeth baring smile. Deep within the supermarket, a small child dragged his feet along the polished marble as he was pulled along; shiny, smart trainers screeched piercingly against the flooring. The boy whined noisily...

Words: 273 - Pages: 2

Free Essay

Publix Supermarkets

...Publix Supermarkets – The American Dream History: Publix Supermarkets is a company that only within the last 80 years has become what it is today. George W. Jenkins, the late founder of Publix Super Markets, was born on Sept. 29, 1907. He grew up in Harris, GA, where he worked in his father's general store until 1925 when he headed to Tampa FL drawn by the prospect of getting into the real estate industry. Instead, he began working at Piggly Wiggly grocery, after being with the company for just a few months he was already managing the store. He was then transferred within the company to manage their largest store in Winter Haven. After 4 years he decided to resign so he could open his own store, following in his father’s footsteps. This was the beginning of something great. On Sept. 6, 1930, George opened his first store, which he called Publix Food Store located in Winter Haven, Florida. Five years later, he opened a second store in the same town. Realizing he needed to truly follow his dreams he decided to close these two stores to open the store people called his “dream store”, the first Publix Super Market, on Nov. 8, 1940. “A food palace of marble, glass and stucco, this store included innovations such as air conditioning, fluorescent lighting, electric eye doors and terrazzo floors” (Publix.com). In 1945, he was able to purchase a warehouse and 19 All American stores from the Lakeland Grocery Company. He began replacing these small stores with his larger......

Words: 3707 - Pages: 15

Premium Essay

Supermarkets

...What’s wrong with Supermarkets www.corporatewatch.org.uk Strip lights, endless queues of strangers and shelves of packets, fake smiles from bored checkout assistants isn't there a better way to get our food? Supermarkets wield immense power over the way we grow, buy and eat our food. They are shaping our environment, our health and the way we interact socially. These changes have gone unchallenged because consumers have been sucked into superstore lifestyles, persuaded that the opportunity to select from six different brands of cut-price oven chips at three in the morning represents choice and value. What’s Wrong With SUPERMARKETS But the tide may be turning. Unease at the true cost of supermarket food is spreading among consumers, who are beginning to join forces with the farmers and workers who have always known that supermarket 'choice' is a bad deal. This booklet aims to help campaigners get to grips with the reality of supermarket domination and argues why we must start looking for alternatives. Researched and written by Lucy Michaels and the Agriculture Project at Corporate Watch What’s wrong with Supermarkets www.corporatewatch.org.uk What's Wrong with Supermarkets? Overview: Supermarkets sweep up 2 3 10 11 The supermarkets we know today started in Britain with the Cooperative Movement in the 19th century. This was a group of independent local retailers controlled by its consumer......

Words: 14175 - Pages: 57

Premium Essay

Supermarket

...The high street has a restricted measure of shops though the web has no imperatives on the quantity of competing business than can endeavour to win business far from you. Likewise, commercial centres that offer direct to purchaser also (e.g. Amazon) will be in direct competition with you as well and with their superior purchasing force will frequently have the capacity to undermine your costs. Separating yourself from the horde of rivalry requires a considerable measure of advertising, a commendable client administration model and a sensible estimating procedure. Juggling every one of the three and hitting the nail on the head keeping in mind the end goal to augment your benefits is a great deal of diligent work. In this present day universe of innovation the Internet is likely one of the greatest and most huge creations to have happen well… ever. Business would be foolish to disregard it as a channel with a considerable course to advertise. Be that as it may, whilst there is a ton of cash to be made online there are a few negatives as well. It merits considering both the upsides and downsides of online retail (think sites, online commercial centres like Amazon, and examination locales) versus a conventional 'blocks and mortar' approach with the goal that you realize what you are tackling and can arrange your business as needs (Business 2 Community, 2015). In Books, the business sector keeps on fluctuating by sub-class, with the nature of distributed having a critical effect...

Words: 2228 - Pages: 9

Premium Essay

Superior

...BACKGROUND COMPANY Superior supermarket is the one of division of Consolidated Hall. Consolidated Hall is a privately owned wholesale and retail food distributor. In year 1959, the Hall Consolidated was formed. In year 1970, the first retail grocery store chain was purchased. The superior supermarket chain was acquired in 1975.The Hall distributed food and related products to some 150 company owned supermarket units operating under three supermarket chain names through 12 wholesale distribution centers.By year 2002 also,1,100 independent store also supplied by Hall distribution in Unites States. In the year, the sales were $2.3 billion. In supermarket chain owned by Hall consolidated, Superior supermarket is the smallest compared to three supermarket chain in Hall consolidated. The superior gained with sales of 192.2 million in year 2002.In trade areas with small cities and towns in South Central Unites States, the superior served them conventionally. The median size is about 44,000 square feet in United States. So the superior is considered small because the areas of the superior supermarket just cover about 20,730 square feet. Even though the size is small, the superior was the number 1 or number 2 in ranking of supermarket chain in each of its trade measured by market share. The figure 1.1 below had shown the front view of superior supermarket. Figure 1.1: The view in front of Superior Supermarket. 2.......

Words: 2981 - Pages: 12

Premium Essay

Supermarket

...Supermarket Rain pouring, the cars wipe away their tears as they pull up into the parking spaces. People hurry into the supermarket with their hoodies up or carry something over their head to avoid getting wet. The supermarkets brightly lit, Christmas decorations were dotted everywhere. A big tree nicely decorated was lit on the far side of the supermarket with lots of lovely presents neatly placed underneath. Sleek, automatic, glass doors slid smoothly open, only to divulge a catastrophe of noise. Children wailed tills beeped, sound systems boomed. In comparison, the rumbling cars and chattering birds of the outside world were nothing. Inside the supermarket the scent of bread and fruit filled the air. All the while customers pushed and shoved as they tried to squeeze past one another trying to gain access to the many bargains and free bread being given out. The supermarket was as busy as a hive full of bees rushing to make honeycomb for their queen. Shelves that had been neatly stacked just a few hours ago were now all over the place. Fruit was squashed, milk was spilt. Clothes were out of place, jewellery was on the floor – miss-matched, shoes were with wrong pairs and hangers were chucked here and there. Elsewhere, employees scurried around about like squirrels readying themselves for winter – customers every need were tended to with a standard impassive, teeth bearing smile. Deep within the supermarket, a small child dragged his feet along the polished marble floor......

Words: 300 - Pages: 2

Premium Essay

Superior Supermarkets Everyday Low Pricing

...Research Documents The Research Paper Factory JoinSearchBrowseSaved Papers Search Home Page»Business and Management Superior Supermarkets In: Business and Management Superior Supermarkets Superior Supermarkets Memo Memorandum To: James Ellis, President of Superior Supermarkets CC: Randall Johnson, District III Manager of Superior Supermarkets From: Matthew Clemente RE: Potential Everyday Low Pricing Strategy Date: April 9, 2010 The challenge presented to the President of Superior Supermarkets James Ellis and his district manager Randall Johnson is whether or not to implement an everyday low pricing strategy to the Superior Supermarkets stores in Centralia, MO. Superior Supermarkets’ current pricing strategy is a high-end branding strategy, giving them the highest prices in Centralia. With their declining market share the past seven years (they currently have 23% market share in 2002, down from 31% just three years ago; see Exhibit 2) Superior Supermarkets looks to increase their rising revenues from the past three years (Exhibit 4), regain their past successful market share and maintain their already successful contribution margin. To accomplish these three goals, there are several alternatives that Superior Supermarkets could employ to help them retake the market in Centralia. The three locations of Superior Supermarkets in Centralia certainly give them precedence in location, but their market share should certainly be higher with the various...

Words: 331 - Pages: 2