Wegmans Adopts EDLP Policy
ROCHESTER, N.Y. - Wegmans Food Markets has adopted an everyday low price policy on 4,000 popular grocery items, and now the Rochester, N.Y.-based chain is getting the message out to its customers.
Details of the program were explained to Wegmans customers via a videotape mailed to households participating in the chain's Shoppers Club frequent shopper program. It was packaged in a chartreuse sleeve that urged viewers to "Open. Watch. Save."
In the five-minute video, company president Danny Wegman explained the program, using one of his favorite foods -- Peter Pan peanut butter -- as an example. Wegmans normally sold Peter Pan for $2.29 a jar, but frequently had it on sale. "Some of our customers might miss out on the specials because they were on vacation," Wegman said. So Wegmans has lowered the price to $1.89 every day. Sales of peanut butter have increased as a direct result, Wegman explained, using a Magic Marker and sketchpad to illustrate the rising sales.
According to Wegmans' Web site, the EDLP approach will simplify the work for store associates and the buyers in perishables categories, like yogurt, where shoppers stock up on the brand that is on sale, resulting in excess inventory and lower expiration dates for the other brands.
Wegmans also promises to continue its weekly ads, and says it will run its Shoppers Club specials for longer periods of time, but will eliminate buy-one-get-one-free items. "The 'Savings Summary' on your receipt tape may be smaller (since we've lowered the regular price). Your total grocery bill will also be smaller," the Web site explains to shoppers.
While Wegmans has high hopes for its EDLP program, it remains to be seen how successful it will be in the chain's newest marketing area of New Jersey. There, market leaders ShopRite, Pathmark, A&P, and Acme draw shoppers in with hot weekly specials, and have recently begun offering one-day sales to attract more customers. The former Edwards division of Ahold used EDLP but wasn't successful; its stores were eventually converted to the Stop & Shop banner, which uses the traditional high-low pricing.
Details of the program were explained to Wegmans customers via a videotape mailed to households participating in the chain's Shoppers Club frequent shopper program. It was packaged in a chartreuse sleeve that urged viewers to "Open. Watch. Save."
In the five-minute video, company president Danny Wegman explained the program, using one of his favorite foods -- Peter Pan peanut butter -- as an example. Wegmans normally sold Peter Pan for $2.29 a jar, but frequently had it on sale. "Some of our customers might miss out on the specials because they were on vacation," Wegman said. So Wegmans has lowered the price to $1.89 every day. Sales of peanut butter have increased as a direct result, Wegman explained, using a Magic Marker and sketchpad to illustrate the rising sales.
According to Wegmans' Web site, the EDLP approach will simplify the work for store associates and the buyers in perishables categories, like yogurt, where shoppers stock up on the brand that is on sale, resulting in excess inventory and lower expiration dates for the other brands.
Wegmans also promises to continue its weekly ads, and says it will run its Shoppers Club specials for longer periods of time, but will eliminate buy-one-get-one-free items. "The 'Savings Summary' on your receipt tape may be smaller (since we've lowered the regular price). Your total grocery bill will also be smaller," the Web site explains to shoppers.
While Wegmans has high hopes for its EDLP program, it remains to be seen how successful it will be in the chain's newest marketing area of New Jersey. There, market leaders ShopRite, Pathmark, A&P, and Acme draw shoppers in with hot weekly specials, and have recently begun offering one-day sales to attract more customers. The former Edwards division of Ahold used EDLP but wasn't successful; its stores were eventually converted to the Stop & Shop banner, which uses the traditional high-low pricing.