Supermarket Price Wars Heat Up

The Los Angeles Times reports Groceries to cost even less as supermarket price war intensifies

The region’s big grocers, already having trimmed prices for much of the year, are gearing up for a new round as they seek to win back budget-minded customers who have migrated to discounters such as Wal-Mart Stores Inc. and Target Corp.

Vons will announce today that it is lowering the prices of about 5,000 items — about 15% of the store — at its 274 stores in the region.

Ralphs is also launching what it calls a “significant” reduction in produce prices and other often-purchased goods. Both chains said the simultaneous launch was a coincidence. And both are starting to use yellow signs and price tags to highlight the changes in their stores.

“It is almost like the old gas wars,” said shopper Richard Rorex of Apple Valley. “People are lowering prices to get my business.”

“I am noticing a 10% to 30% reduction on my register tape each time I go to the store,” said Rorex, who mentioned that he had found lower prices at Stater Bros., Vons and Albertsons in recent weeks.

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The chains are getting some help in their efforts from a steep price decline in many food commodities, including milk and grains, as well as reductions in shipping expenses because of a drop in oil prices from highs in 2008.

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Of the top five (grocery chains by market share in SoCal), only Stater Bros. and Trader Joe’s have gained share in the first quarter of 2009 compared with the fourth quarter of 2008, Shelby Report said.

About 6 months ago I was in Trader Joes, looking at beer, at I saw their “Simpler Times Lager” for $2.99 a 6-pack. One of the employees was standing right there and I asked him about it.

He said “We know the economy is tough right now so we wanted to put out a good beer that people could easily afford. It’s very drinkable and, at 6.2%, it still does the job.”

Amen. Another reason I’m a big fan of Trader Joe’s.