Safeway appeals to shoppers with Savings Club discounts


Charlotte Brooks saved $2 on a $50 shopping tab at a Safeway Store in Ellicott City recently.

She did it using her membership card in the Safeway Savings Club, a new enticement for shoppers that Brooks sees as a convenience more than a monetary benefit.

"I am definitely not a coupon person," said Brooks, an arts teacher shopping at the Safeway in the Normandy Shopping Center in Howard County last week. Instead of clipping coupons for products before entering the store, she used her card to get discounts on certain advertised items.

The discounts of up to 20 percent are subtracted automatically when the items pass over an electronic scanner at the checkout counter.

Brooks, who cheerfully checked out two bags of groceries, said the Savings Club put her in a "better situation" to meet her shopping needs and probably will convert her to regular Safeway shopping.

"I try to comparison shop and buy in bulk," she said. "But I don't shop labels, and coupons are really just for the name-brand products."

Her comments would be music to the ears of Safeway officials, who began expanding the Savings Club program locally a month ago, hoping it would appeal to shoppers who -- like Brooks -- would willingly abandon discount coupons and perhaps even other food chains to shop at Safeway stores.

Officials of the Oakland-based supermarket chain say that, by using the card, customers can save on a list of nearly 50 products that are on sale weekly. For example, on the most recent list of items on sale, Doritos Tortilla chips are priced at 84 cents for a 7-ounce bag for regular shoppers compared with 75 cents for club members.

The program, which is possible because of the company's $10 million investment in International Business Machines scanning equipment, is being targeted strictly at Safeway's eastern division, where Safeway competes head on -- usually in second place -- against local industry leader Giant Food.

The eastern division includes the Baltimore, Washington and Richmond areas. The savings club program was piloted last year at two Safeway stores on the Eastern Shore, and was recently expanded to 12 stores in the Baltimore area. Officials were unable to say how many customers had joined the membership program thus far.

Safeway plans to eventually offer Savings Club memberships at all of the company's 147 eastern division stores.

Safeway spokesman Jim Roberts shied away from saying Safeway was targeting Giant with its new campaign.

"What we're doing is trying to offer our existing customers an additional way to save some money, while we also try to attract new customers," Roberts said. "We'd be happy to win customers from anywhere."

Predictably, Giant officials downplayed Safeway's new effort.

Pete Manos, Giant senior vice president of food operations, said Safeway's Savings Club is no different than Giant's super special or bonus special programs, where Giant offers discounts on bulk goods and items larger than standard size.

"In total, if you put our programs against theirs, you're going to come out better at Giant," said Manos.

Both Safeway and Giant will also continue to offer computer generated coupons at the checkout counter as well as honor clipped coupons at double their value.

Giant pilot-tested a frequent-buyer program two years ago in Waldorf and four Virginia stores. The program featured uses of a plastic card similar to Safeway's, but did not offer the immediate discounts that Safeway's Savings Club does. Instead, the Giant program triggered rebates that were mailed to the customer, who could then redeem them for cash or merchandise.

The program fizzled, and it's creator, Citicorp, is currently redesigning it to be more effective.

Programs such as Giant's pilot and Safeway's club represent attempts by food retailers to give customers more "bang for their bucks," said Jeff Metzger, publisher of the food industry trade publication, Food World.

He said the Savings Club should help Safeway differentiate its stores in the minds of consumers who are confronted by a "fog" of retail chains selling similar merchandise even though their main lines may be groceries, drugs or clothing.

Variety discount stores such as Wal-Mart and K mart, as well as warehouse stores and drug emporiums, blur the distinctions between retailers, Metzger said.

Safeway's program may give the food chain something unique in the market and foster greater customer loyalty, he said.

"The key is whether they're committed to it in the long term," Metzger said.

"I wouldn't call it [Savings Club] a test," said Roberts. "We're committed to this, it's just a question of implementing something in stages as opposed to doing it all at once."

Besides the weekly discounts, membership in the Savings Club prompts monthly mailings that include coupons that can be redeemed only at Safeway stores.

Store officials say this is an added benefit not only for the customer, but for Safeway, which will be able to monitor customer shopping habits and communicate directly to manufacturers who may want to capitalize on soaring sales or boost flagging ones by issuing coupons directly to Safeway customers.

Roberts said manufacturers will not have direct access to club members.

With the monthly mailings, Safeway officials are promising that club members will be kept abreast of food festivals, member sweepstakes, club giveaways and contests.

As Safeway asks in its promotional material: "What's a club without a little fun?"

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