Save-A-Lot : An Extreme-Value Retailer

Presented ByB.v.aditya(1225111306)Md fayaz(1225111332)

CONTENTSIntroductionCase AnalysisAnswers to QuestionsConclusion

INTRODUCTONSave-a-Lot is an exemplar of the retail

category known as an extreme value food retailer. The case describes the target market, location, merchandising, buying and operations strategies of extreme value food retailers and also identifies some trends. The Save-a-Lot case illustrates the increasingly popular extreme value food retailer category.

In 1977,Bill Moran started a assortment concept to give small grocery stores a way to compete.

Cont..It has 1200 stores across United states which

is spread across 18,000 sq feet and having approximately 2100 Sku’s .

It has 4-million weekly shoppers.It offers a assortment of various types that

serves the grocery stores so as provide a better quality merchandise to the customers.

Retail stratergyRetail target market -- Value and convenience

oriented psychographic segment(looking for good value, name , quality merchandise at low prices).

Retail format----retail mix offered 1. Nature of merchandise and services offered-assortment for daily needs and value services like frozen shrimp.

2.Pricing policy--lower then there competitors by decreasing operating costs.

3.Advertising and promotion programs--no advertising allowance and placing the merchandise on the shelf and using frozen shirmp as promotional tools.

Cont..Competitive AdvantageSave-A-Lot offers a very limited supply of high-quality

private label merchandise at extremely low prices. Their merchandise is offered to consumers at significantly lower prices than conventional supermarkets, with limited customer service levels, appealing to price conscious and lower income consumers. Save-A-Lot uses multiple bases for competitive advantage including unique merchandise and its strength in vendor relations. The combination of these sources of competitive advantage makes their strategy sustainable.

Elements in the strategic profit model1.Spread only over 18,000 sq feet2.2100 sku’s of popular items.3.Editted assortment format 4.No advertising allowance.5.Controlling operating costs.6.Spread over inexpensive real estate and staff

in store is limited.7.Don’t charge for bags.

+ &- of limited assortment from consumer point of view+’sSAVE-A-LOT's product mix includes high-quality custom

brands, select national brands and fresh produce, meats and dairy products.

Extreme value also means delivering savings in an efficient, shopper-friendly store environment. That efficiency begins at the warehouse. SAVE-A-LOT's more than 1,100 locations are supported by their own dedicated distribution network. SAVE-A-LOT's comparatively small average store size, wide and uncluttered aisles, and "bag-your-own" facilities create a quicker shopping experience for the consumer.

Consumer doesn't get confused with the varities of products offered to them and make choice immediately.

Up to 40% Cost Savings

-’si. Customer may not be always satisfied with

the offerings of retail.ii. Always finding the same product customer

may get bored and switch to other retail stores .

+ & - of limited assortment from retailers point of view+’squality testingLeading the Way in Extreme Value. relocations from neighborhood centers.The chain is also in the process of retrofitting

stores with new exteriors and interior.Save-A-Lot is one of the nation’s leading retailers

for Banquet, Sara Lee and Totino’s products.-’si. Supply shortage ii. Meeting the changing needs of customer

Advantages of license stores. Save-A-Lot supplies much of these stores

with its exclusive branded products, but the licensed owners have the freedom to sell other non-Save-A-Lot products at their stores.

distribution of licensed stores is spread across the contiguous United States.

Operation within the government rules and regulations.

Increased exposure in the market place.

DisadvantagesLicense has to be renewed at regular

intervals of time.Royalty payments for a license and audit

provisions are difficult.Less Operational ControlExposure to LiabilityIncongruous Marketing Campaigns.Less Per-Unit Revenue