What's wrong with a "3 for $5" sign? Plenty, says grocery chief. And he wants to fix it.

Fri. October 23, 2009; Posted: 05:04 PM

Look up the PowerRating of SVU and see how it has performed over the past week as well as the current proprietary PowerRating.

Oct 23, 2009 (Pioneer Press - McClatchy-Tribune Information Services via COMTEX) -- SVU | Quote | Chart | News | PowerRating -- The supermarket sign says "3 for $5." What's wrong with that?

Plenty, says Supervalu's new chief executive, Craig Herkert, who says it "demonstrates three points that we're working to eliminate" at America's No. 3 grocer.

The parent company of Cub Foods is aiming for "straightforward prices that are easily understood." On Tuesday, Herkert told analysts as he discussed a 42 percent drop in third-quarter profit that a recent 3-for-$5 promotion shows the problem.

First, he said, "The customer has to do the math to figure out that one item sells for only $1.67."

Second, "The sign implies that you need to buy three to get this price, and I can assure you that not many people want to buy three of this item at one time."

And

third, "The price the consumer sees is $5, which does not scream 'value' in today's economy," Herkert said.

Dave Brennan, a marketing professor at the University of St. Thomas, said he "wholeheartedly" agrees.

"He's absolutely right in terms of perception," Brennan said. "Do it directly, so the customer understands what the proposition is and can make a decision."

Then why are such deals so commonplace?

"Retailers are not thinking about the customer," Brennan said. "They're thinking about themselves, and the possibility of selling more -- but in a lot of cases what it's doing is that it prevents or limits customers from buying these individual items."

Herkert is just five months into his reign at Eden Prairie-based

Supervalu, and he's facing a sackful of challenges. But already, the former Wal-Mart executive has made it clear he believes in tackling the little stuff, not just the big issues, as he tries to get Supervalu back on track.

To see more of the Pioneer Press, or to subscribe to the newspaper, go to
http://www.twincities.com. Copyright (c) 2009, Pioneer Press, St. Paul, Minn.
Distributed by McClatchy-Tribune Information Services. For reprints, email
tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax
to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave.,
Suite 303, Glenview, IL 60025, USA.

For full details on Supervalu Inc (SVU) click here. Supervalu Inc (SVU) has Short Term PowerRatings of 5. Details on Supervalu Inc (SVU) Short Term PowerRatings is available at This Link.

More News: Market Updates | Stock Alerts | All Trading News | Stock Index

Archives

Feedback

Email Article Link

Close X

RELATED SITES

Please call 1-213-955-5858 ext. 1

Tax Relief Bank Levy Wage Garnishment

Disclaimer:

The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.

It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.

The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302

All analyst commentary provided on TradingMarkets.com is provided for educational purposes only. The analysts and employees or affiliates of TradingMarkets.com may hold positions in the stocks or industries discussed here. This information is NOT a recommendation or solicitation to buy or sell any securities. Your use of this and all information contained on TradingMarkets.com is governed by the Terms and Conditions of Use. Please click the link to view those terms. Follow this link to read our Editorial Policy.