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What's in Store: Texas tacticians

Value focus boosts United's sales

United Supermarkets is considering aggressive seafood
    promotions for 2009. - Photo courtesy of United Supermarkets
By Christine Blank
February 01, 2009

United Supermarkets, a chain of nearly 50 stores throughout Texas based in Lubbock, is increasing its sales in tough economic times by focusing on frozen seafood items that offer a value for shoppers.

It is particularly successful with the cost-savings initiatives in its United Supermarket format of 38 stores, which cater to lower- and middle-income shoppers. In its Market Street format of nine stores, United focuses primarily on middle- to upper-income customers, who are primarily interested in buying fresh seafood, meats and produce, says Scott Nettles, United's director of meat and seafood.

About a year ago, United partnered with seafood supplier Seattle Fish in Albuquerque, N.M., to produce a line of frozen shrimp products for its 
supermarket customers.

The shrimp is sold in various sizes and is available cooked, peeled and de-veined or in the shell. Frozen tilapia and catfish fillets round out the 4-foot frozen seafood sections in many United stores. "We have very little shrink and higher turns with these products than in the fresh departments," says Nettles.

Seattle Fish also supplies the United stores with frozen tilapia fillets from Mexico, which typically retail for between $3.99 and $4.99 a pound.

"What we have done with seafood in our lower-income stores is focus on smaller shrimp or catfish or frozen tilapia. We have been able to offer less expensive products and have not seen an erosion in sales," says Nettles. In fact, seafood sales in some United stores increased 10 percent in 2008.

"In our lower-income stores, where the cost is lower for 
[frozen] seafood, we have been able to grow our fish sales" 
adds Nettles.

The retailer also boosts sales through aggressive promotions and price points.

"We devote a good portion of our protein page [in United's circular] every week to our fish. We have not let up on promoting fish," says Nettles.

United and Market Street consistently hold events that increase interest and excitement in the seafood departments. Demos are frequent, especially leading up to the holidays. A December contest among United and Market Street stores rewarded seafood departments and stores that sold the most shrimp party trays and included demos and decorated island displays.

"The key is to get the store director involved and not just the seafood director. We have team members who dress up, corresponding with the holiday theme," says Nettles.

Order forms for seafood party trays are conveniently placed on the demo tables. "If someone is having a party or an office party, they can call the seafood manager directly and order the trays," 
he adds.

In another innovative promotion in a few stores, shoppers are encouraged to leave their business cards at the seafood department, and a random drawing is held for a free 2-pound bag of shrimp. Participants agree to sign up for a United seafood e-newsletter, which includes recipes and articles on seafood preparation as well as a list of seafood specials for the week.

"We have the marketing department build the newsletter for us, but we have the best success when the seafood manager takes an interest and sends it out. It is more personal," notes Nettle.

Another boon for United Supermarkets' seafood departments is its prepared seafood items, which allow customers to grab a gourmet-style fish or seafood entrée and simply cook it at home.

"We are doing well with our crusted items, such as Tortilla Crusted Tilapia and Mediterranean Crusted Salmon," says Nettles. The grab-and-go items, which also include Potato Crusted Cod, sell better during the middle of the week when people are busy with work and other 

The success of its refrigerated, prepared items has enabled United to reduce the amount of fresh fillets offered in the case and add more grab-and-go entrées over the past year.

United also changed pricing on some of the prepared items, generating more profits. Instead of selling a 5.5-ounce portion of crusted salmon for around $9.99 a pound, United is selling them as portions for $2.50 to $3 a piece.

"When you sell them by portions, you can promote them at two for $6, for example. It has helped us pick up those units and gives us a cheaper image," says Nettles.

Despite all of United's promotional efforts, Nettles acknowledges it is a difficult operating environment for all seafood retailers. He is looking at new and more aggressive promotions early this year.

"Demand is slowing, because the economy is driving people to cheaper proteins. You have to get it [seafood] hotter on ads and you have to take less gross," 
says Nettles.

To spur fresh seafood sales, the supermarket chain will partner with Seattle Fish on tuna fillets and salmon fillets.

Nettles admits the retailer will sometimes take a loss. "We will have to run better price points in the ad, and just take worse margins," says Nettles.

United may price salmon fillets as low as $3.99 a pound instead of an average of $6.99 a pound or more, just to get shoppers back to the seafood department.

"With some of the promotional money that is used to push beef, we are going to try salmon. We are going to remind our customers that we have got fresh seafood in our stores," says Nettles.


Contributing Editor Christine Blank lives in Lake Mary, Fla.


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