Hi Value Supermarkets

Topics: Supermarket, Grocery store, Price Pages: 11 (3328 words) Published: February 4, 2014
Case Summary:

In 1975, Hi-Value Supermarkets became a division of Hall Consolidated, a privately owned wholesaler and retail food distributor. Hi-Value Supermarkets is considered to be the smallest of the three supermarkets chains owned by Hall Consolidated, with a small store distribution for its category. Hi-Value was the number one or two ranked supermarket chain in each of its trade markets (as measured by market share).

Hi-Value is known as “most convenient”, having three stores in Centralia compared to its top competitors only having one each. Hi- Values three are major competitors are: Harrison’s, Grand American, and Missouri Mart. The three major competitors in Centralia contain stores all subsequently larger in size than those of Hi-Value. The four major supermarkets in Centralia make up 85% of all food sales, with the remaining 15% stemming from smaller, independent grocery stores and convenience stores. All 3 major competitors contain a feature attributes and a unique position in the market. Because of Hi-Value Supermarkets having three locations throughout Centralia, they provide a level of convenience that the competition simply cannot mimic without substantial investment.

Although Hi-Value Supermarkets does offer the highest level of convenience, there overall prices are the highest. Residents of Centralia prefer a lower price factor mainly due to the average income, which falls between $35,000 and $74,999. Price is the most important store determinant for the residents, which poses a problem for Hi-Value. With price being the most important store determinant for the residents, the current situation poses a problem for Hi-Value.

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

Problem Definition:

The Primary Problem that Hi- Value Supermarkets face is that they are the highest priced in comparison market studies of supermarket competitors within the Centralia region. Endowed with proof in the Hi-Value Supermarket Shopper Interview Results (Exhibit 7) that when asked the question “Liked most about other regular 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 items and fresh produce.

Symptoms of this problem can be viewed within the 3% loss revenue within the first quarter of the 2003-year.

Situational Analysis:

Challenge:
The challenge for Hi-Value is weather or not to make the imperative decision to implement “Everyday low pricing” into their sales structure. And if implemented, decide if and how the decision will influence Hi-Value Supermarket’s brand image and positioning.

Company
In 1975, Hi-Value Supermarkets became a division of Hall Consolidated, a privately owned wholesaler and retail food distributor. Since then, Hi-Value has been serving trade areas in small cities and towns in the South Central United States. Hi-Value Supermarkets is considered to be the smallest of the three supermarkets chains owned by Hall Consolidated. With a small store distribution (for its category) of 20,730 square feet, Hi-Value have demonstrated an outstanding performance, achieving sales of $192.2 million in 2002 and reaching top rankings in market share scores.

Strengths
Hi-Value Supermarkets, in comparison to their competitors, counts with three strategically positioned locations in Centralia, Missouri, making them more accessible to their customers. This positions Hi-Value on top of the list of customer preferences regarding shopping convenience. Each one of those three...
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