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Do IT this week: Layering
Sales up as people forgo dining out, research shows
By Betty Lin-Fisher
Beacon Journal business writer
POSTED: 06:24 p.m. EST, Dec 16, 2008
People are eating out less these days.
They're still eating — just at home.
And the beneficiaries are grocery store chains such as Acme Fresh Market, Giant Eagle and Buehler's Fresh Foods.
As other sectors of the economy are laying off workers and cutting back production shifts, the grocery-store industry seems to be financially stable.
According to North Carolina-based marketing research firm Sageworks Inc., privately held grocery-store sales were up 5.7 percent in 2007 and are up 7.9 percent in 2008, while privately held restaurant sales were up 4 percent in 2007 and 2.2 percent in 2008.
Area grocery executives are also reporting healthy sales.
But the industry still is operating at its traditionally low profit margins.
''The overall business is up as people are eating out less,'' said Jim Trout, vice president of merchandising and sales for Acme Fresh Market.
But Trout added, ''It's still tough.''
Officials at Acme and Buehler's, both private companies, declined to reveal financial details, citing competitive reasons. Both report a significant increase in store brands, or products sometimes called generic or private-label brands.
''We are absolutely seeing more consumers become value-conscious. There's an increase in private-label [sales]. They are leaving brands to go to private labels. They can save money, 20 percent less than the brand names,'' said Trout.
Acme has 15 locations in Summit, Portage and Stark counties and one in Parma in Cuyahoga County.
Buehler's customers often pick private-label brands over name brands in blind taste tests, said Mary McMillen, director of consumer affairs. Buehler's has 13 locations in Northeast Ohio, including stores in Medina, Stark and Wayne counties.
While sales in some categories of store brands, particularly in pantry staples, tend to grow during tough economic times, that growth primarily affects non-No. 1 brands, said Maribeth Badertscher, director of corporate communications for the J.M. Smucker Co. The Orrville-based food company best known for its jams and jellies also owns such brands as Jif peanut butter, Crisco oil, Pillsbury and recently acquired Folgers coffee.
Noting that recipes are handed down through generations, ''some feel that store brands may help them save a few pennies in the short-term, [but] we find that consumers continue to prefer our . . . No. 1 brands to preserve treasured family traditions and help create new ones,'' Badertscher said in an e-mail statement.
Smucker market data show that more meals are being prepared and served at home during the challenging economic time.
The grocery store industry is one of the best businesses to be in now, said Tom Jackson, president and chief executive of the Ohio Grocers Association, which represents large and small store owners.
''People are not eating out as much. They're certainly not going out for the expensive meal as often and now I call it circling the wagons around the kitchen. They're doing things together. They're doing more cooking at home. I think it actually improves the family time and family life,'' said Jackson.
Shoppers are more savvy and are watching advertised discounts, said Trout and McMillen.
''They're planning their purchases a little more carefully. They're building their lists around the ads and specials,'' McMillen said.
Jackson said while sales totals might be affected because of cheaper brands, profit might not necessarily go down because margins are similar in all economic climates.
Giant Eagle officials at the company's Pittsburgh headquarters declined an interview request for this story. Officials e-mailed a statement saying that customers are saving during the tough economic conditions by using the company's ''Fuelperks'' program to earn savings on gasoline purchases through groceries and gift cards, as well as using double coupons, weekly specials and store brands. Company officials declined to answer further questions.
Trout of Acme said consumers often change their buying habits during tough economic times.
''If times are good, the mix changes. It's not tenderloin, it's ground beef,'' he said.
McMillen said Buehler's is also seeing an increase of non-Buehler's shoppers during the holidays looking for special items, such as gift baskets, meat-and-cheese trays and fresh baked goods.
Prepared foods, such as rotisserie chickens and soups to go, continue to see higher sales, Acme and Buehler's officials.
In October, Buehler's introduced a Click, Load & Go program, where customers can order groceries online and arrange for a pickup at the store. Even with the cost of $7.95 per order or $24.95 per month, the service is growing with new and repeat customers, said McMillen. It is currently only available at the Medina River Styx store.
The holidays put consumers in a spending mood, executives said. During the holidays, ''people are still willing to spend on quality because if they're going to do it, this is the time of year. If you're going to buy a spiral-sliced ham, you're going to buy the best,'' said McMillen.
Stores adjust inventory depending on demand, said Jackson of the Ohio Grocers Association.
''People have to eat. They don't have to eat steak, but they certainly can eat ground beef,'' Jackson said. ''You're probably going to see more macaroni and cheese, more chicken, more lower-end items rather than some of the fancy turkey-breast recipes or beef-roast recipes.''
Betty Lin-Fisher can be reached at
330-996-3724 or blinfisher@
thebeaconjournal.com.
People are eating out less these days.
They're still eating — just at home.
And the beneficiaries are grocery store chains such as Acme Fresh Market, Giant Eagle and Buehler's Fresh Foods.
As other sectors of the economy are laying off workers and cutting back production shifts, the grocery-store industry seems to be financially stable.
According to North Carolina-based marketing research firm Sageworks Inc., privately held grocery-store sales were up 5.7 percent in 2007 and are up 7.9 percent in 2008, while privately held restaurant sales were up 4 percent in 2007 and 2.2 percent in 2008.
Area grocery executives are also reporting healthy sales.
But the industry still is operating at its traditionally low profit margins.
''The overall business is up as people are eating out less,'' said Jim Trout, vice president of merchandising and sales for Acme Fresh Market.
But Trout added, ''It's still tough.''
Officials at Acme and Buehler's, both private companies, declined to reveal financial details, citing competitive reasons. Both report a significant increase in store brands, or products sometimes called generic or private-label brands.
''We are absolutely seeing more consumers become value-conscious. There's an increase in private-label [sales]. They are leaving brands to go to private labels. They can save money, 20 percent less than the brand names,'' said Trout.
Acme has 15 locations in Summit, Portage and Stark counties and one in Parma in Cuyahoga County.
Buehler's customers often pick private-label brands over name brands in blind taste tests, said Mary McMillen, director of consumer affairs. Buehler's has 13 locations in Northeast Ohio, including stores in Medina, Stark and Wayne counties.
While sales in some categories of store brands, particularly in pantry staples, tend to grow during tough economic times, that growth primarily affects non-No. 1 brands, said Maribeth Badertscher, director of corporate communications for the J.M. Smucker Co. The Orrville-based food company best known for its jams and jellies also owns such brands as Jif peanut butter, Crisco oil, Pillsbury and recently acquired Folgers coffee.
Noting that recipes are handed down through generations, ''some feel that store brands may help them save a few pennies in the short-term, [but] we find that consumers continue to prefer our . . . No. 1 brands to preserve treasured family traditions and help create new ones,'' Badertscher said in an e-mail statement.
Smucker market data show that more meals are being prepared and served at home during the challenging economic time.
The grocery store industry is one of the best businesses to be in now, said Tom Jackson, president and chief executive of the Ohio Grocers Association, which represents large and small store owners.
''People are not eating out as much. They're certainly not going out for the expensive meal as often and now I call it circling the wagons around the kitchen. They're doing things together. They're doing more cooking at home. I think it actually improves the family time and family life,'' said Jackson.
Shoppers are more savvy and are watching advertised discounts, said Trout and McMillen.
''They're planning their purchases a little more carefully. They're building their lists around the ads and specials,'' McMillen said.
Jackson said while sales totals might be affected because of cheaper brands, profit might not necessarily go down because margins are similar in all economic climates.
Giant Eagle officials at the company's Pittsburgh headquarters declined an interview request for this story. Officials e-mailed a statement saying that customers are saving during the tough economic conditions by using the company's ''Fuelperks'' program to earn savings on gasoline purchases through groceries and gift cards, as well as using double coupons, weekly specials and store brands. Company officials declined to answer further questions.
Trout of Acme said consumers often change their buying habits during tough economic times.
''If times are good, the mix changes. It's not tenderloin, it's ground beef,'' he said.
McMillen said Buehler's is also seeing an increase of non-Buehler's shoppers during the holidays looking for special items, such as gift baskets, meat-and-cheese trays and fresh baked goods.
Prepared foods, such as rotisserie chickens and soups to go, continue to see higher sales, Acme and Buehler's officials.
In October, Buehler's introduced a Click, Load & Go program, where customers can order groceries online and arrange for a pickup at the store. Even with the cost of $7.95 per order or $24.95 per month, the service is growing with new and repeat customers, said McMillen. It is currently only available at the Medina River Styx store.
The holidays put consumers in a spending mood, executives said. During the holidays, ''people are still willing to spend on quality because if they're going to do it, this is the time of year. If you're going to buy a spiral-sliced ham, you're going to buy the best,'' said McMillen.
Stores adjust inventory depending on demand, said Jackson of the Ohio Grocers Association.
''People have to eat. They don't have to eat steak, but they certainly can eat ground beef,'' Jackson said. ''You're probably going to see more macaroni and cheese, more chicken, more lower-end items rather than some of the fancy turkey-breast recipes or beef-roast recipes.''
Betty Lin-Fisher can be reached at
330-996-3724 or blinfisher@
thebeaconjournal.com.
Comments
Click here to post your comments
Posted 07:09 PM, 12/16/2008
"Gotta eat!"
Tallmadge, OH
Posted 07:18 AM, 12/17/2008
Walmart is the only place to buy groceries "not on sale" in the area these days. Acme & Giant Eagle have gone through the roof on their pricings. Remember too that many non-chain in the area restaurants still offer early bird specials for about $6 and they are a bargain too. So don't quit eating out just because of the economy.
akron, oh
Posted 09:19 AM, 12/17/2008
Oh sure buy at walmart thats really great. Good job Old man. Thats just great. Stick it to the Americans buy from Walmart
Akron, OH
Posted 09:22 AM, 12/17/2008
Way to be accommodating, Giant Eagle. It's not enough that you jam Steelers merchandise into my area stores, but you can't even answer a few questions and instead go with a scripted company line?
Akron, OH
Posted 09:27 AM, 12/17/2008
Grocery stores fare well in lean times:
Yea, price fixing will do that.
Posted 09:36 AM, 12/17/2008
Gas prices have been dropping, but do you see Acme or Giant Eagle lowering their prices? Even Marc's prices have gone out of sight. Hey, don't bash WalMart for having items made in China ... have you checked out Target, Michael's, Pat Catan's, JoAnn Fabrics, Dollar General and the major department stores ... items made in China all over the place!
Akron, OH
Posted 09:49 AM, 12/17/2008
How can grocery stores lower their prices when they are already making single-digit margins on many items? Charity stops with the Salvation Army bell ringer outside the stores. These guys need to make money.
Posted 11:33 AM, 12/17/2008
Jason: Oh really? Well, I purchased a grocery item at WalMart for $1.25 and found it selling at Acme for $2.79 ... same size, same brand, same item. Don't tell me their profit margins are in the single digits!
Fredricksburg, VA
Posted 12:21 PM, 12/17/2008
You guys are complaining about food prices, look at all the Deer you see walking around North Akron. Deer meat is some of the best meat out there health wise, and it taste great, especially when ground up and used in Spaghetti or Lasagna with a little Italian Sausage. It only cost $45 - $55 to fully butcher a whole Deer depending on size. This will feed a family of 5 for about 45 days. God used Ravens to feed Elijah, and here you guys have Deer walking through your neighborhood and your not taking advantage of it.
Posted 12:24 PM, 12/17/2008
Some retailers will price gouge and no even blink an eye. Up to us to be wise shoppers.
akron, oh
Posted 01:17 PM, 12/17/2008
@Lois- GE and ACME also pay much better wages and offer benefits. I shop there to help there employees make a decent wage.
Plus Walmart is always full of fat chicks packed into those tight pants.
Posted 01:45 PM, 12/17/2008
Man Acme is a rip off.
Posted 01:45 PM, 12/17/2008
I never got benefits working at Acme by the way.
Posted 02:52 PM, 12/17/2008
Acme pays high school wages to their employees even after graduation. And the union still collects the union dues from these kids!
Akron, OH
Posted 03:16 PM, 12/17/2008
Everyone wants to bemoan the cratering economy in this area. If you want to make a difference, shop at Acme, Beuhler's, Heinen's, Kreiger's, etc and shop locally.
......, Oh
Posted 06:19 PM, 12/17/2008
Archie:
I'm not sure where you got your info
Giant Eagle only pays their workers minimum wage.
It takes you years to make a decent wage, and I don't think $11.00 after 19 years of service is a good wage!
......, Oh
Posted 06:20 PM, 12/17/2008
And Archie.
Fat chics in tight pants?
That's funny, you must have been looking,how else would you have known. Jeeeesh
......, Oh
Posted 06:22 PM, 12/17/2008
Lois you're correct!
why pay $1.99 for cake mix at the Acme when I can get it for 89 cents at Walmart.
Orrville, Oh
Posted 09:24 PM, 12/17/2008
Foreign and Domestic investors (money marketers) in Futures market and grocery retail businesses scam Fathers disqualified for affirmative action with white skin, Union workers, consumers, taxpayers, and Americas grandchildren. Fund unemployed and low-income workers, casino, keno, and lottery losers, waitresses that pander for life for $2.00 per hour, volunteers without wages, and nonunion parasites willing to work for fewer wages than they can afford life. Paying for the more stock dividends (money) Foreign and domestic investors market quarterly in the wholesale and retail price of food with food stamps. That gets only food. With money derived from wages or independent business profit!
Posted 01:39 AM, 12/18/2008
Why are all those cans thrown in a box-is that a scratch & bent box or are they restocking the shelves? People have to eat, to have gasoline, to have electricity and heat so they can charge what they want and they do.
Posted 06:35 AM, 12/18/2008
Attention Shoppers, Stop being so lazy and give your perishable items you don't want to the cashier.As long as there are lazy shoppers and scumbag shoplifters around we all will continue to have high grocery prices.
akron, OH
Posted 08:54 AM, 12/18/2008
acme??
Posted 04:02 PM, 12/18/2008
Yes Acme started on the Canal.Right Stevie ?????
