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    Energy, Food Prices Rise — So Do Food Merchandising Opportunities

    It's all over the news: soaring gasoline prices that have doubled over the last year, a by-product of sharply increased energy prices that also are driving up food prices at retail.

    It's all over the news: soaring gasoline prices that have doubled over the last year, a by-product of sharply increased energy prices that also are driving up food prices at retail.

    There is a silver lining: people still have to eat, and according to a National Retail Federation survey conducted by BIGresearch, consumers still plan to spend about 40 percent of their tax rebates on goods and services, with an increasing percentage of it going to food.

    Cautious shoppers just may need a little direction.

    "Success will come to retailers who define themselves by who they sell to and how they sell them, not by what they sell," Todd Hale, senior vice president, Consumer & Shopper Insights Nielsen Homescan & Spectra wrote in a recently issued report, U.S. Retailing & Consumer Trends.

    In the report, Hale suggests retailers invest in resources to re-invent themselves, stay on top of consumer trends, segment shoppers to uncover opportunities, and understand shopping in and out of their stores.

    Hale advises grocers competing with mass merchandisers and club operators to sell gift cards or develop other joint promotions to provide shoppers with incentives to shop their stores.

    Many in the grocery business, including Stop & Shop, Kroger, Shaw's and others are actively marketing their supermarkets' loyalty programs and now include gasoline price rewards, which are very appealing to shoppers.

    Whole Foods is offering concrete shopping advice in the form of a series of in-store tools called "Value Shopping Tips, Tours, and Top Sellers" to help shoppers stretch their food budget. These tips include: shop the specials; purchase seasonally; consider private label goods; buy bargains and store them for future use as well as creatively use leftovers; and shop the bulk grocery bins for extra savings.

    Private label may be a hidden boon to grocery retailers and permit more latitude to provide incentives to shoppers. Hale notes that a greater use of private label merchandise can afford both retailers and manufacturers the opportunity to strengthen consumer loyalty to a particular chain while giving the manufacturer the opportunity to try new formulations without tampering with the core brand. Such a tactic will provide operators with an increase in "share of wallet and share of mind." And with more consumers entertaining at home rather than eating in restaurants, the in-home publicity could be the beginning of a grassroots marketing initiative.

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