Budget shopper lacks loyalty: Safeway CEO

Posted by Isobel Drake on 3rd August 2009

The CEO of Safeway, one of America’s largest supermarket chains, has recommended all supermarket operators focus on ‘everyday low prices’ rather than promotions in order to lure the budget consumer.

During last week’s quarterly conference call with investors, Chairman, President and CEO of the retailer, Steve Burd, suggested that loyalty amongst the budget consumer could no longer be driven by heavy promotions as they were channel surfing more often and showed a greater preparedness to shop around.

The budget shopper is “not very loyal at all” he contended, leaving retailers with the prospect of consumers simply coming into supermarket chains to purchase the items on special and nothing else. A situation that “would really hurt you from a P&L standpoint”, Mr Burd added.

Despite his upbeat opinion on the everyday low prices mantra, Mr Burd said that retailers must be prepared to invest time into such a strategy as, in the current situation, consumers may still be blinded by the bright lights of a sale.

“Investments in lower prices take time to gain sales traction,” he advised. “This is particularly true in today’s environment where our volume increases are more than offset by price investments, an unprecedented level of deflation in two of our largest categories and trading down.”