Business

Retailers playing value game

As everyone knows, cash-strapped consumers are cutting back.

In response, stores are inundating shoppers with messages to fit their newly found frugalness.

Target is pushing the “Pay Less” half of its decade-old “Expect more, pay less” tagline. Subway is touting a $5 footlong. Even Wal-Mart, already the giant of low prices, has launched new TV ads reminding customers of the values it offers.

But for shoppers, all the extra marketing may not mean much. They want stores to show them the discounts.

Shopping at Wal-Mart last week, Raleigh resident Karin Long said she hadn't even noticed the new flashy orange “Unbeatable prices” signs adorning nearly every aisle.

“I don't even look at them,” she said, shaking her head. Pointing to the price tag on a shelf of canned vegetables, she added, “This is the sign I look at.”

Of course, many retailers have long promoted their low prices (think Kmart's Blue Light specials), and people have always liked saving money.

But it hasn't been as crucial for so many people in a long time.

“It has a lot to do with our need to be in control,” said Candace Corlett, a retail industry analyst for WSL Strategic Retail. “People are saying, ‘I can't control the big things, so I'm trying to control the little things.'”

For retailers such as Target, shoppers who focus mainly on price can be a problem because they don't spend as freely on items that make big money for the stores.

Long associated with chic fashion, Target is now putting more emphasis on prices.

The chain's weekly sales circular is featuring bigger pictures of fewer items and bigger, bolder type emphasizing values. Signs in stores have been changed to make deals more visible.

“We are striking a balance,” said Target spokesman Joshua Thomas. “If you walk into your Target store, it's still fun, it's still highly stylized, it's still cool and hip. We're just being more direct with the low price.”

In its latest earnings call, Target said it is trying to match Wal-Mart's prices, at least on certain items.

Even as its profits remain strong, Wal-Mart is taking the offensive against the legions of competitors suddenly touting value and has launched a new batch of 15-second TV ads.

The spots feature shoppers talking about Wal-Mart's low prices, $4 prescription drug plan and all-under-one-roof convenience.

“The challenges people are facing are pretty unprecedented,” said Greg Rossiter, Wal-Mart spokesman. “We don't doubt there are competitors out there who like to be in that position with consumers, but the reality is that's a natural and well-established position for us to be in.”

Beyond the big stores, retailers of all sizes are getting into the value game:



Tween Brands recently announced it would convert its Limited Too stores to its Justice brand, which targets “tweens” and has lower prices and higher profits.



Bed Bath & Beyond scored one of the few back-to-school successes by applying its wedding registry technology to back-to-school shopping.

Customers walked through the store with a scanner gun, scanning the products they wanted and had them shipped to the store closest to the student's college dorm.



Whole Foods Market, which is not exactly known for its low prices, is trying to show customers that it too has deals. Stores are offering free “Shop on a Bargain” classes.

“We all shop on a budget,” said Carrie Le Chevallier, who helps lead the class at the Raleigh Whole Foods stores. “There's pretty much no one who doesn't nowadays.”

  Comments