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Price Chopper takes savings to the ‘xtreme’

BY Allison Cerra

SCHENECTADY, N.Y. — Price Chopper is calling out products that tout value through a new display concept.

The company said its Xtreme Values concept will showcase deeply discounted items in specially merchandised areas of Price Chopper stores. The concept will feature Price Chopper’s private-label brand, Clear Value, along with "an ever-changing assortment of opportunity buys, limited-edition products, lesser-known brands, truckload sales and closeouts, as well as not-seen-before deals on corporate and national brand products."

Xtreme Value sections launched in Connecticut earlier this month in five stores located in Southington, Bristol, Vernon, Newington and Windsor. At this time, Price Chopper said, there are no plans to expand Xtreme Values to the chain’s other 123 locations in the Northeast.

"Xtreme Values brings the fun and excitement of a treasure hunt to the Price Chopper shopping experience," Price Chopper CEO Jerry Golub said. "Connecticut customers have proven that they recognize the outstanding quality of our fresh foods, as well as the value offered by our AdvantEdge card discounts, double coupons, corporate brand products, digital coupons and Fuel AdvantEdge promotion. Xtreme Values gives them one more compelling reason to shop at Price Chopper."

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Fundamentals, not M&A, could drive Rite Aid shares back up, analyst says

BY Alaric DeArment

NEW YORK — A takeover by Walgreens is "highly unlikely," but Rite Aid shares could stay past the $2 mark due to the company’s fundamentals, an analyst said Thursday.

Guggenheim Partners analyst John Heinbockel wrote in a report that he had increased his price target for Rite Aid shares from $1.60 to $2.25 due to projected higher EBITDA, 3% to 4% growth in the Camp Hill, Pa.-based chain’s core business, a $57 million benefit from generics and a $35 million benefit from the continued dispute between Walgreens and pharmacy benefit manager Express Scripts. Heinbockel also said the Walgreens-ESI dispute could strengthen Rite Aid’s Wellness+ loyalty card program as an increase of 6 million scripts and 1 million incremental pharmacy customers would increase participation in the program by 2% to 48 million.

"Our optimism stems entirely from fundamentals and not from potential M&A," Heinbockel wrote. "In our view, a strategic transaction is highly unlikely. This largely reflects the absence of logical buyers at acceptable prices. We find it difficult to make the case that WAG should spend $8 billion or more to acquire RAD."

Rite Aid’s shares hit a four-year high of $2.06 Wednesday following the release of a report by Credit Suisse analyst Edward Kelly speculating that Walgreens "may" seek to acquire Rite Aid. A similar report in November 2011 by analysts at Susquehanna Financial Group had a similar effect. Kelly himself put the odds of an acquisition at 1-in-3.

But Heinbockel wrote there would be numerous hurdles to the merger. For example, Walgreens has often paid extra for good locations, but may be "uncomfortable" with Rite Aid’s real estate. Meanwhile, upgrading existing stores would cost anywhere between $1 billion and $2 billion, in addition to the $8 billion purchase price. Furthermore, Walgreens is relatively inexperienced when it comes to large-scale acquisitions and integrations, compared with CVS/pharmacy, which has successfully integrated more than 1,000 Eckerd stores, almost 1,000 SavOn-Osco stores and 400 Long’s stores.

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Tide promotes latest product with Hispanic consumer outreach

BY Allison Cerra

CINCINNATI — Procter & Gamble is supporting the recent launch of Tide Pods, the brand’s three-chamber unit dose laundry detergent, by tapping singer and actor Jencarlos Canela to show Hispanic consumers how the product is unlike any other laundry product on the market.

Tide said Canela will surprise people at laundromats in Miami and Los Angeles to show them how the laundry process can be consistent since measuring dosage is not necessary, the company said. Consumers will have the opportunity to meet Canela on April 3 at a laundromat in Los Angeles.

"I’m very happy to represent Tide and to be able to reach my friends for the launch of this innovative product," Canela said. "At home, we’re already using Tide Pods, the future of laundry, and I noticed that is very easy to use because with one single pac you can obtain in your clothes brightness, cleanness and fight stains; everything in the palm of your hand."

Tide Pods now are on shelves nationwide in a variety of sizes and three scents.

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