Walmart may call itself the "Low Price Leader," but the nation's largest grocer, The Kroger Co., says it's making its own stand on pricing, significantly lowering the costs of thousands of items in its Knoxville-area stores starting Wednesday.
"These are not items that are on sale just this week; they are new everyday low prices," said Kroger Nashville spokeswoman Melissa Eads.
Middle and East Tennessee Kroger shoppers are getting a break that the chain's customers lost in other markets where the new lower prices have been introduced, though — the double coupon policy will remain in effect here. In the other markets, the lowering of prices was accompanied by discontinuation of the policy of doubling the value of manufacturers' coupons at Kroger stores.
"We're not changing anything as far as coupons go," Eads said. "We will still double the value up to 50 cents on manufacturers' coupons."
As for the price cuts, they've been selected to apply to many items that shoppers regularly buy, Eads said.
"We're trying to make sure the mix is items you would find in a shopping cart on an everyday basis, items that are meaningful to our customers," she said.
The reductions include "a significant number" in produce, natural foods and organics, the company said, adding that its natural-food sales have more than doubled in the past four years.
"The trend accelerated with the highly successful launch of the Simple Truth line of products, a Kroger exclusive," Kroger said. "Kroger is rewarding natural foods and organic customers as part of this initiative."
Eads said the price cuts are not in response to Wal-Mart's recent price-comparison TV ads that purport to show lower prices at the discount chain's stores.
"Our intention is to improve the shopping experience all the way around," she said. "We continue to try to find ways to give our customers more value."
As for competitors, "We always face competition," Eads said. "That hasn't changed a lot over the past 10 years. They make us better."
Financial analysts who follow Kroger said the move falls in line with what's happening in the grocer space.
"It's just the nature of the industry," said analyst Jeff Thomison with Hilliard Lyons in Louisville, Ky. "Kroger has done it in several markets. But competition is the reason for most moves like this."
But Jim Hertel, a food-industry consultant with Willard Bishop in Barrington, Ill., said the price cuts' focus on natural and organic foods might be in response to Walmart's recent push to build up its business in those products.
"Kroger has been very smart and aggressive about managing their price position in the marketplace," Hertel said. "They have been very aware, especially against Wal-Mart.
"But the question is whether Kroger is doing this because of a competitive need, or an opportunity to boost natural and organic food sales," he said. "Wal-Mart has announced that it is going to get much more active in natural and organics, so that could be part of the impetus for this — sort of a pre-emptive move."
Kroger's Nashville Division includes 90 stores in Middle and East Tennessee, southern Kentucky and north Alabama, Eads said.
The new lower prices have previously been introduced in markets such as Cincinnati, which is Kroger's headquarters, as well as Memphis, Louisville and Atlanta, Eads said. Stores in Michigan and Texas also have switched to the lower prices.
Besides the price cuts, Kroger offers savings on gasoline and generic prescriptions, and sends out weekly "loyalty mailers" based on customers' shopping habits. The grocer also runs weekly specials and offers digital coupons.
PRICING CHANGE EXAMPLES
• Lettuce that was $1.29 a head is now 99 cents.
• Fresh peaches were $1.99 a pound; now they're 99 cents.
• Roma tomatoes were $1.29 a pound; now they're 99 cents.
• Butterball turkey bacon shows a huge drop: It was $3.19 for a 12-ounce package; it's now $1.99.
• General Mills cereals that were $3.28 are now $2.99, including Honey Nut Cheerios (12.25 ounces), Lucky Charms (11.5 ounces) and Cinnamon Toast Crunch (12.2 ounces).
• Betty Crocker Fudge Brownies (18.3 ounces) was $2.35, now two for $3 ($1.50 each).
• Kibbles & Bits Beefy Bites dog food (16 pounds) was $11.99, now $9.99.
• Lysol Lemon All Purpose Cleaner (32 ounces) was $2.69, now $1.99.