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Giant Eagle Price Cuts, Round Two

PITTSBURGH -- On the heels of a well-publicized price reduction strategy it implemented last November, Giant Eagle here unveiled a second round of price cuts on more than 1,200 additional items yesterday.

The 219-store chain's spokesman, Rob Borella, told Progressive Grocer the move illustrates Giant Eagle's intent to continue to deliver on a promise it made six months ago.

"In November, when we announced the first round of price reductions, we made two things clear," Borella said. "One, that the move was a result of our ongoing efforts to maximize internal operating efficiencies and pass those savings on to our customers, and two, that we were going to continue taking costs out of our system to pass those savings on to customers in form of lower prices."

Guided in part by a new batch of consumer insights, Borella said Giant Eagle approached the second wave of price reductions in a slightly different way than it did round one. "Since November, we conducted additional research with a smaller group of customers and asked them to tell us where we have opportunities to improve." Pricing was an area that was identified "loud and clear," Borella said. He added that since that time, the chain has seen marked improvements with its everyday pricing image among focus group panelists.

Based on that customer feedback, the chain concentrated its efforts for the second round on a more defined set of products, while instituting deeper percentage reductions on many of individual items. "Our customers will also find that approximately half of the items being reduced further in the current pricing action were initially lowered in the November initiative," Borella noted.

The latest round of everyday lower prices will affect a variety of national brand and Giant Eagle brand product categories that shoppers commonly purchase, Borella said, including cereal, condiments, baby food, canned goods, pasta, juices, frozens, and dairy products. The products will be flagged on the shelf with "New Lower Price" tags.

For the previously mentioned categories, Borella said the price reductions were taken "at an even deeper discount on a percentage basis than we did in November, so now we're looking at average reductions in the 10 percent range for the April round."

"What we hear repeatedly is that [customers] really like us for promotional pricing, Giant Eagle Advantage card specials, and fuelperks! promotional rewards," said Borella. He added that the enhancements to value should be viewed as part of the company's overall effort to continually improve the shopping experience. "Our goal is to be the best food retailer in our markets. Continuing to improve everyday value is a key strategy in our efforts to attain this overall goal."

While any one customer's savings will depend upon individual purchases, the result of these additional reductions alone should save Giant Eagle customers approximately $35 million annually, according to Borella. He said that with the second round of EDLP reductions, consumers will net cumulative annual savings of approximately $70 million.

The chain will take its new message to the airwaves beginning today, with an updated communication plan that includes radio, television and newspaper advertising, circulars, and in-store signage.

Some examples of the everyday savings Pittsburgh-area customers can expect are listed below. The item is followed by the everyday new price and, in parentheses, the everyday former price:

Similac Advanced Concentrate* $3.49 ($3.77)

Capri Sun 10 Pack Juice* Two for $4 ($2.87)

Chunky Clam Chowder* $1.98 ($2.42)

Ragu Pasta Sauce* $1.94 ($2.15)

Mrs. T's Pierogies* Two for $4 ($2.18)

Miracle Whip Salad Dressing $2.99 ($3.41)

General Mills Cheerios* $3.11 ($3.88)

Philadelphia Cream Cheese $1.70 ($1.89)

Giant Eagle, one of the nation's largest retailers and distributors, has more than $5.2 billion in annual sales and operates 138 corporate and 81 independently owned and operated stores throughout western Pennsylvania, Ohio, north central West Virginia, and Maryland.

--Meg Major
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