Safway is launching a $100 million ad campaign that completely ignores that staple of nearly all supermarket advertising -- price. The embattled chain says it is trying to shift to a "brand-focused identity," changing its tagline from "Giving Our Best" to "Ingredients for Life."
Like other supermarket chains, Safeway's growth has been stalled and its profits have plunged, due partly to increased competition from Wal-Mart's Superstores, which have taken a huge chunk of the grocery business away from supermarkets. Dollar stores have also been expanding their food offerings.
Increasingly, supermarkets must either move upscale with a "lifestyle" approach -- like Whole Foods and Trader Joe -- or face steady erosion from the discounters.
Kroger and Albertson's, the chains most similar to Safeway, have been trying to promote a shopping "experience" without abandoning price. Kroger, for example, bills itself as "Right Store, Right Price."
Safeway and other chains don't have a lot of flexibility on the price issue in the markets where they are unionized. Wal-Mart stores are non-union and pay their employees considerably less than the older chains.
Safeway has opened 183 new stores in recent years while closing 214. It says that by the end of this year it will have 450 "lifestyle" stores around the country.
