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What's in Store: Texas tacticians
Value focus boosts United's sales
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
responsibilities.
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.