Grocery wars.

• Author: Rundles, Jeff
• Position: RUNDLES [wrap up] - Column

About 30 years ago a supermarket price war broke out in Denver, and it always struck me as one of the all-time blunders.

Back then I always shopped at Safeway because it was the closest supermarket to my house. Safeway went on a big marketing blitz saying their prices were lower than the competition, and they were offering some pretty sweet deals. I don't remember the specifics, but I recall that the promotion worked, and that the stores--mine at least--were packed.

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Unfortunately, the day they launched the initiative it snowed something awful. In the price-cutting furor, Safeway had apparently failed to adequately staff the stores. Shelves were empty, the floor was a mess from people tracking in the snow, and the upshot was that when the promotion was over fewer people shopped Safeway than had before. I switched to King Soopers and didn't go back into a Safeway for years.

The grocery landscape in those days was far different than it is today, we had Safeway, King's and Albertsons, and that was pretty much it. Today we have those players, although Albertsons has apparently fallen off drastically, and added to the mix are Target Super Centers and Wal-Mart on the giant end of the scale, and Whole Foods Market and Sunflower Farmers Market in their own strategic niches. King's dominates with a nearly 39 percent market share, with Safeway and Wal-Mart each enjoying significant shares, 19.6 percent and 19.1 percent, respectively.

In early December, Safeway, apparently stung by falling market share, launched a price war with a campaign it is calling Everyday Low Prices, lowering prices from 10 percent to 44 percent. It occurred to me that the campaign was very Wal-Mart in its approach--and that is probably not by accident--what with all the yellow sticky notes and the prices crossed out with a marker and replaced with the new lower costs. News reports said the major competitors were eager to follow suit or had, they said, actually beaten Safeway to the price-cutting punch, just without the fanfare.

The beneficiaries will be all of us who buy groceries--at any of the stores, majors and minors alike. As my wife said, "Isn't competition wonderful?"

I wonder. The answer is "yes" in the short term. But wars...