There’s More Than One Way to Win on Value in US Grocery

Four imperatives to win on value

Value is one of the biggest drivers of brand promotion in grocery. That makes it a powerful generator of sales, too: A grocer’s promoters tend to spend 26% more than shoppers with a neutral view of its brand, according to Bain research.

However, winning on value doesn’t have to involve unsustainable price investments that try to match the giants of everyday low pricing (EDLP) on all fronts. Few grocers could remain profitable doing so. Instead, executive teams can seize the value opportunity by making the following moves.

1. Clarify who your most important competitors are now amid today’s flux

That’ll determine how much flexibility exists for a more multi-faceted approach to pricing, especially at grocers that aren’t competing so directly with pure EDLP players.

2. Ensure base prices are sharpest on the products that matter most to shoppers (and AI)

Focus on items that are bought frequently and drive store traffic. Grocers must also anticipate where pricing is becoming more transparent due to shoppers using AI tools.

3. Use a range of supporting levers to further improve pricing perception

Most grocers will need to supplement their base price strategy with one or more of the following: promotions, coupons, loyalty rewards, and private brands. With promotions, it’s the quality, not the quantity, that counts. Frequent low-quality promotions can damage pricing perception.

4. Communicate value clearly and consistently to customers

Some grocers offer fantastic value but don’t shout about it enough. Others undersell their value credentials by telling a confusing story to shoppers. From in-store signage to digital channels, the value message needs to be as sharp as the pricing.