Dive Brief:
- Save A Lot has launched a new pricing promotion that links meal ideas with the high prices shoppers are paying at the pump.
- The discount grocer’s “Fuel Your Family” promotion markets 10 bundles of ingredients — like spaghetti, pasta sauce and garlic bread — for less than the price of 2 gallons of gasoline.
- The promotion highlights rising price sensitivity among consumers as inflation and fuel costs go up, and the determination by discount retailers to capitalize on the opportunity.
Dive Insight:
As grocery and gas prices continue to rise, discount grocers like Save A Lot see a chance to draw price-sensitive consumers away from traditional food retailers and into their stores.
Case in point: Save A Lot’s latest promotion, which directly connects the company’s low prices with one of the biggest financial strains consumers are experiencing right now. All of its meal deals are $8 or less, which falls just below the current average price for 2 gallons of regular gasoline as tabulated by the motoring and travel membership organization AAA.
Those meal deals include tuna pasta with vegetables for under $4, grilled cheese and tomato soup ingredients for under $5, and sloppy Joes fixings for less than $8. Breakfast, lunch and dinner options are included. Save A Lot, which created a humorous decision tree to highlight its various options, noted that store prices and fuel costs vary by region.
The discounter, which is selling off stores and transitioning to a role of wholesaler and marketing company, has turned up the volume on its low-price marketing recently. In addition to its latest meal promotion, the company launched an unconventional ad campaign and music video last summer that touted its value prices and remodeled stores.
Earlier this month, Save A Lot named industry veteran Trey Johnson, who previously worked as an executive vice president with The Save Mart Companies, as its new chief merchandising officer.
Although supermarket operators like Albertsons say consumer spending in their stores has been strong so far this year, there are signs that discount grocers are starting to pull in more spending. Data from IRI shows that the amount spent per trip at grocery stores declined 0.6% during the first quarter of this year, while at Walmart it rose 3.4% and at dollar stores it rose 8.7%.
According to foot traffic data from Placer.ai, visits to Aldi stores rose 8% in March compared to the same month last year, while visits to Lidl stores rose 11.9% over the same period. The rise in traffic at both discount grocers highlights growing consumer interest in both companies, though Placer did note that both chains’ rapid store expansion helped boost those results.
