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    FRESH FOOD: Perishables Case Study: Triple threat

    Price Chopper is deflecting competition by backing its fresh reputation with a program that gives associates three chances to dump substandard product.

    Price Chopper, the local stalwart in the hotly competitive Kansas City market, isn't afraid to gamble. The 43-store operating group is parlaying that fearlessness[m]as well as a rock-solid confidence in its own fresh-buying merchandising skills -- into market share gains and per-store volume increases against world-class retail rivals.

    The program, known as "Price Chopper's Triple Inspected Guarantee," gives buyers, inspectors, and store clerks permission to reject any produce or meat items they think don't make the grade, period. This public stance is touted in the form of a guarantee to consumers that they'll always get the best in fresh from the Price Chopper banner.

    The program, initiated in May, adds to an arsenal that includes cutting-edge store design and neighborhood-centric marketing models, to keep Price Chopper winning rounds in Kansas City's relentless retail slugfest. The group's five-family nucleus -- the Balls, Cosentinos, McKeevers, Queens, and Brewers/Noltings -- continues to repel attacks from supercenters and discounters that have flattened local conventional grocers in other markets.

    Acceptable risk

    Springboarding from a platform of competitive prices and superior service, the to-market strategy of the Associated Wholesale Grocers member group relies on dominance in fresh produce and meat. Living up to that strategy has entailed some tough decisions and competitive risks.

    With in-house butchers in each store, for example, Price Chopper has continued to largely shun the movement into case-ready merchandising, in favor of a hands-on presentation that emphasizes quality and selection.

    When it comes to fresh produce, its departments have long prioritized variety and a selection that takes full advantage of many seasonal and limited-distribution items.

    "For several years we have taken advantage of our cooperative's buying power, expertise, and contacts to offer customers the 'first fruits' of seasonal produce, and very select specialty produce," says Rick Haberland, Price Chopper's senior group sales manager. Now, in addition to being the first to market with many nontraditional items, Price Chopper is dedicated to offering the "pick of the crop" in terms of high-end quality, when available.

    But Price Chopper won't stand pat. Not long ago its perishables executives determined that they needed to do more to make it clear that the stores do more than just talk the talk about high-quality produce. It was time to put Price Chopper's money where its fresh was.

    The group had initiated a broad quality control program three years ago, reaching across all stores, "with a particular focus on the freshness and appeal of our produce and meat offerings," recounts Haberland. "This year we upgraded that effort with the Price Chopper Triple Inspected Guarantee, a program that takes differentiation to a higher level."

    Rolled out in late May, the program put forth the type of quality pledge that's often considered risky business for retailers if the products don't live up to the promise, but it was a risk that Price Chopper was willing to take.

    As opposed to merely relaying a potentially meaningless quality proposition, "Our Triple Inspected Guarantee makes an ongoing quality promise to customers that our produce will be the finest possible, inspected for quality first in the field, then in our produce distribution center, and finally at store level," says Haberland.

    At the heart of the program is the license given to employees to jettison products at each of those three points of inspection. "Regardless of the commitment or cost, our quality assurance (QA) inspectors, produce buyers, produce warehouse employees, and store employees are absolutely empowered to reject or destroy unsuitable items."

    Price Chopper has been able to maintain its high-quality standards and fulfill its QA guarantee, thanks to a laser-focused management commitment to compliance, adds Haberland. Consequently, the banner group has effectively increased its overall market share through a strategy that capitalizes on its ability to purchase large lots of specialty and top-quality produce for a single market.

    "We're large enough to purchase entire offerings of select items," notes Haberland, "but flexible enough to market the items uniformly and across the brand."

    High-visibility promotions play a large part in conveying the Triple Inspected Guarantee to metro Kansas City shoppers, including the key elements of television and radio, print, and in-store advertising.

    Driving loyalty

    The chain ran a series of television and radio spots to introduce the campaign for its first three weeks, and then supported that run with four weeks of radio, regularly reinforced by broadcast advertising schedules, point-of-sale materials -- including ceiling hangers, aprons for produce staff, and buttons for all front-line staff -- and promotional information in Price Chopper's 1 million-print weekly advertising circular.

    "Having the freshest, best, and most unique fruits and vegetables consistently are key benefits for our customers, as well as for our employees, who take their roles seriously and conscientiously," says Haberland.

    The program is proving to be a highly effective customer loyalty driver and a tangible differentiator, he adds, pointing to internal market data reflecting an increase in Price Chopper's overall market share and individual store sales volumes, "no doubt [due] in part to the quality of our perishables."

    But for Haberland, the long-term value of initiatives such as the Triple Inspected produce program is that they go a long way toward "creating an even greater brand bond with our customers."

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