Hi Worth Supermarkets

Case Summary:

In 75, Hi-Value Supermarkets became a division of Area Consolidated, a privately possessed wholesaler and retail foodstuff distributor. Hi-Value Supermarkets is regarded as the smallest in the three supermarkets chains owned by Lounge Consolidated, with a small store distribution due to its category. Hi-Value was the primary or two ranked supermarket sequence in every of their trade markets (as assessed by industry share).

Hi-Value is known as " most convenient”, having three shops in Centralia compared to it is top competitors only having one each. Hi- Values three are major competition are: Harrison's, Grand American, and Missouri Mart. Three major competition in Centralia contain stores all consequently larger in dimensions than those of Hi-Value. The four main supermarkets in Centralia makeup 85% of all food sales, with the leftover 15% stemming from more compact, independent grocery stores and convenience stores. All a few major competition contain a characteristic attributes and a unique position in the market. Due to Hi-Value Supermarkets having three locations during Centralia, they supply a level of convenience that the competition simply cannot mimic with out substantial purchase.

Though Hi-Value Supermarkets does offer the best level of convenience, there general prices are definitely the highest. Occupants of Centralia prefer a lower price factor largely due to the average income, which will falls between $35, 1000 and $74, 999. Price is the most important shop determinant intended for the occupants, which postures a problem to get Hi-Value. With price getting the most important retail outlet determinant to get the residents, the current condition poses a problem for Hi-Value.

The main question described in the case is whether or not really Hi-Value should implement a low-pricing strategy. With the examination of Hi-Value's current state, it really is evident that their foreseeable future falls in among several courses of action that executives must examine and choose regardless of whether to integrate them. This process must be done in order to maintain a strong position inside their served market and successful future.

Problem Classification:

The Primary Problem that Hi- Value Supermarkets face is they are the maximum priced in contrast market studies of supermarket competitors inside the Centralia place. Endowed with proof in the Hi-Value Superstore Shopper Interview Results (Exhibit 7) that after asked the question " Enjoyed most about other standard store”, the number one answer provided was " Price”.

The cause of this is their commitment and value of high quality and limited variety of merchandise particularly in grocery products and new produce.

Symptoms of this problem can be looked at within the 3% loss earnings within the first quarter in the 2003-year.

Situational Research:

Challenge:

The challenge for Hi-Value is weather or never to make the imperative decision to implement " Everyday low pricing” to their sales composition. And if implemented, decide if and just how the decision can influence Hi-Value Supermarket's manufacturer image and positioning.

Company

In 1975, Hi-Value Supermarkets started to be a division of Hall Consolidated, a secretly owned wholesaler and full food distributor. Since then, Hi-Value has been serving trade areas in tiny cities and towns inside the South Central United States. Hi-Value Supermarkets is considered to be the smallest in the three supermarkets chains held by Area Consolidated. With a small retail store distribution (for its category) of 20, 730 sq ft, Hi-Value have demonstrated an outstanding performance, achieving product sales of $192. 2 million in 2002 and attaining top search positions in business scores.

•Strengths

Hi-Value Supermarkets, when compared to their rivals, counts with three strategically positioned locations in Centralia, Missouri, which makes them more accessible with their customers. This kind of positions Hi-Value on top of the list of buyer preferences with regards to shopping comfort. Each one of those three...

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