Walmart is trumpeting the success of its “Walmart Challenge” ad campaign, but one competitor isn’t taking the challenge lying down. It’s fighting back with its own series of ads, pointing out that price isn’t everything.
“Our butchers cut and grind our beef several times throughout the day every day, right in the store, so it’s always fresh for your family,” reads a new ad from the Milwaukee-based Pick ‘n Save grocery chain. “At Walmart they don’t even cut their beef in the state of Wisconsin.”
Ouch! And the ad goes on: “Good luck finding a butcher there at all to help you.”
Other ads in the series include digs like, “Try finding ANY fresh seafood at Walmart… but don’t hold your breath,” “When everything’s about cutting costs, the shopping experience suffers,” and “We believe your family deserves good food – not just cheap food.”
Walmart launched its price-comparison ad campaign earlier this year (read: “Always Low Prices. Always. (Sometimes.)”), and now runs the ads in more than two dozen individual markets. Its ads in Milwaukee take Pick ‘n Save head on, showing actual receipts from the two stores side by side, to illustrate how much an average shopper can save buying the very same items at Walmart.
“Price leadership is at the center of our strategy,” said William S. Simon, President and CEO of Walmart U.S. He says Walmart’s ads “clearly show the price separation Walmart offers with competitors in grocery and drug… Keep in mind, these are actual baskets the customer has purchased, not just a key item comparison.”
Still, some shoppers have taken issue with the Walmart ads (read: “Challenging The ‘Walmart Challenge'”), saying the price comparisons fail to take things like sales, coupons and the overall shopping experience into account. Pick ‘n Save’s own ads represent one of the more notable pushbacks coming directly from a competitor itself.
The Pick ‘n Save ads are “designed to change the discussion from price only to more about total value,” said Bob Mariano, Chairman and CEO of the grocery chain’s parent company, Roundy’s. “The overall focus is on freshness and experience, which is a big differentiator between our stores and the supercenters.”
It’s shaping up to be a real food fight, as Pick ‘n Save defends its dominance on its home turf. The chain lost nearly 10% of its market share in Milwaukee over the past year to discount chains like Walmart and Costo. “It’s going to be a lot of fun, and the winner is going to be the consumer,” a local supermarket consultant told the Milwaukee Journal Sentinel. But others aren’t so sure. “We’re going to have companies fall on their face,” another retail consultant tells the paper.
Mariano contends that Walmart is just looking to boost foot traffic, so it can afford to offer “everyday low prices” on groceries as long as its customers spend money on other things. But grocery stores don’t have the luxury of losing money on groceries, when that’s all they sell. Many Supervalu-owned stores like Albertsons, Cub Foods and Jewel-Osco have been targets of the “Walmart Challenge” ads. Largely as a result of this increased competition, Supervalu recently reported free-falling profits, closed dozens of stores and fired its CEO (read: “Stuff Could Be Cheaper at Supervalu-Owned Stores – If You Can Find One”).
So for many grocers, joining an ad war with Walmart may be the only option – since, for them, the real Walmart Challenge could be their very survival.
August 21 update: Walmart returns fire.
I totally agree. Walmart’s quality is so lacking that I gave up shopping there and actually drive past a Super center to get to a Kroger. Walmarts Fruit and vegetables are such poor quality they are almost already bad when you buy them. I constantly purchased milk already on the verge of spoilage the moment I got it home. It would only last a day and I end up dumping out most of it. I even complained to the Heath Department as I couldn’t believe they were keeping the milk at the proper temperature if it was already spoiled a week before the “use-by date”. I was afraid someone would get sick. I now only go to Walmart if my Kroger doesn’t have it.