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Kroger on Friday unveiled a new Lower Prices campaign.
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Kroger (KR) unveils Lower Prices campaign on 3,500 items, ends double couponing

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NEWPORT, Ky. - Kroger on Friday unveiled a new Lower Prices campaign that will bring an end to double-coupon promotions but reduce prices on 3,500 items in its 110 Cincinnati and Dayton stores.

Kroger's fuel points campaign will continue, but the money it now spends on double coupons will now be tripled and reinvested in price reductions. Vice President of Merchandising Scot Hendricks said it amounts to a multi-million dollar annual investment by Cincinnati's largest grocery competitor.

"Price is certainly a top concern when our customers are deciding where to do their shopping," Hendricks said. "We're going to hang our hat on our three big emphasis areas of the fuel, the low price and the faster checkouts."

The company made the announcement at 10 a.m. at the Newport Kroger Marketplace, with a banner that said "New! Lower prices on products." Examples of price reductions include Soy Milk, reduced by $1.40, a three-pound bag of onions, down $1, and a Kroger 24-pack of water, down 71 cents.

Hendricks said the discounts will take effect Monday, Feb. 4, accelerating a trend toward lower pricing that Kroger has been implementing in its stores since 2008.

Hendricks said the low-price initiative is not a reaction to Walmart's current Cincinnati advertising campaign, in which the Arkansas-based retailer invites shoppers to compare prices on their grocery receipts to Walmart pricing. He said the company has tested the strategy in other cities, but couldn't provide details on what impact it had on market share.

Kroger has been gaining share in many of the markets where it competes against Walmart, touting a customer-centric strategy that has grown share by 200 basis points in the last five years. Hendricks said Kroger has grown market share in Cincinnati in the last 12 months, but not as rapidly as its national growth rate.

Kroger runs a risk of losing customers "hooked on double coupons" but they can reduce that risk "if they can communicate what they're doing clearly to people and it's backed up" by noticeably lower prices, said Jim Hertel, managing partner of Willard Bishop, a Barrington, Ill. –based food retail consultant.

"One of the things that happens in a double coupon environment is you're kind of letting manufacturing coupons dictate your prices," Hertel added. "This is a move that will allow them to gain more control over where they're investing from a couponing standpoint."

Click below or go to http://www.wcpo.com/generic/money/business_news/Krogers-new-lower-prices-campaign to see examples of Kroger's new low price ads.

Example of new low prices ad from Kroger

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