It’s not just Walmart that’s taking out full-page newspaper ads to compare its receipts with its competitors’. The same kind of ad war is also happening in a mid-sized Southern city that’s suddenly becoming a whole lot more competitive.
Kroger and the new-in-town Publix are battling it out in Knoxville, Tennessee, with a series of newspaper ads that illustrate the lengths that grocery stores will go to, to capture the attention – and dollars – of customers who now have many more choices. Shortly after Publix’s arrival in town earlier this month, Kroger took out a full-page ad in the Knoxville News Sentinel. It featured a Kroger receipt next to a Publix receipt for the same items, showing that a customer would have saved nearly 20% by shopping at Kroger. Publix fought back with its own ad a few days later. “Not everyone is thrilled that Publix is in Knoxville,” Publix’s response read. “Kroger is now running ads highlighting cherry-picked prices to try to convince you not to shop at Publix.”
“You’ll discover Publix often has lower prices than Kroger,” the ad goes on. “So while Kroger struggles to convince you that they’re cheaper, we hope you’ll come see us at Publix.” Kroger followed up with another receipt-comparison ad, featuring the subtle headline “Serving Knoxville Since 1956.” In 1956, Publix didn’t exist outside of its home base of central Florida.
The showdown in this city of less than 200,000 residents is a case study of sorts, about what can happen when a once-dominant grocer finds that its once-loyal customers have a lot more options. Kroger had already lost its number-one position in Knoxville to Walmart, and is tied for second place with Food City, according to a Metro Market Studies report. Trader Joe’s also recently opened its first store in town, and Whole Foods and Costo are on their way. So with these new big-box and specialty competitors, the last thing Kroger needed was another grocery store to compete with, for an even smaller share of the grocery market.
But Publix saw an area ripe for its approach, which is “to offer the best shopping experience possible for our customers,” a spokesperson told the Knoxville News Sentinel last year, after Publix announced its intention to expand into Knoxville. “We don’t feel that the competition in (Knoxville) quite meets the standards that we have.” And the chain’s emphasis on customer service and an appealing shopping experience has been well-received in Knoxville so far.
“People have been really pleased with their experiences,” said Katie Van Dyke, of the Knoxville-based Coupon Katie website. “They have a great coupon doubling policy and are the only store in town that accepts competitor coupons. The store is nice and bright and the cashiers are really friendly.”
Yet, she continued, “I am seeing mixed reader reviews on pricing though. Some readers have been shocked at how high Publix’s regular prices are.” Publix is known for its extensive list of weekly buy-one-get-one free deals, but those deals are offset by generally higher prices on things that aren’t on sale. And Kroger says its ads are meant to reinforce just that. “We’re very proud of our pricing structure,” said Kroger spokesman Glynn Jenkins. “Kroger’s retail prices are competitive and lower than other retailers.”
Which, ironically, is the same argument that Walmart makes in its price-comparison ads against grocery stores just like Kroger. (read: “Always Low Prices. Always. (Sometimes.)”)
So, will all of the competitors be left standing, when the dust settles from this supermarket showdown? “Competition is good for a market,” Food City CEO Steve Smith told the News Sentinel. “The more competition there is, the more the customers benefit.” But other analysts say it can be difficult for so many stores to survive in a relatively small market, where Walmart is already gobbling up a good portion of the grocery dollars.
In the end, says Coupon Katie, “for local coupon users, Publix is a great addition to the quickly crowding Knoxville market. It offers one more store with great sales and a good coupon policy.”
And one more source of new income for the local newspaper, for as long as the ad war rages on.
