Superior Supermarkets

1701 WordsNov 8, 20087 Pages
PROBLEM STATEMENT Superior Supermarkets (SS) must decide whether or not to pursue an everyday low pricing (ELP) strategy at its three Centralia MO locations. Strategic Issues & Marketing Mix Pricing: Current prices are reflective of a high-end branding strategy. SS everyday (non-promotional) prices are approximately 10% higher than Harrison (Hr) and about 7 percent higher than Grand American (GA) and Missouri Mart (MM). Subsequently, higher prices have become a competitive concern due to their declining market share in Centralia. The negative growth rate, based on 1995 to 2002 figures from Figure 2, is -0.53%. Product line: SS are supermarket stores. The stores’ products may be divided into 5 categories: 1) grocery (including…show more content…
Customer: The median age of the Centralia population was 35 years; the median household income was $36,000; and 80% of residents had a high school education or more. Expectations/Minimal Threshold to purchase: Reasonable prices, convenience, quality produce/meat, overall variety of foods (taken from Exhibit 6); products must be consistently available and reasonable customer service is expected. Market size= 41000 residents or 13,500 households (US Consensus 2000). Competition: Main competitors with market share (%) and growth rates, respectively, include: GA -13%, -6.36%, MM -27%, 0.97%, Hr -22%, 11.82%, and other stores -15%, -3.50%. The four main stores (SS, GA, MM, Hr) accounted for 85% of all food sales in Centralia. Size: GA has 1 store 39,800sq. ft, Hr has 1 store 50,000sq. ft, MM has 1 store 120,000sq. ft. There are a total of 148 supermarkets operating in Centralia. Strategy: MM is the food sales volume leader of Centralia and offers more general merchandise, accounting for 60% of its floor space. Hr captures the business of most of the middle- and upper-income groups in Centralia with annual incomes in excess of $40,000. The store focuses on ELP and is considered clean, orderly, attractive and well-managed. GA is considered the most modern store in Centralia and has the finest fixtures and décor –its wide aisles make it relatively easy to shop. Competitor’s strengths: Increased floor space, attractive

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