Grocery grousing

Albertson's is cutting prices.

That generated good buzz for the chain.

Except, Albertson's only is making those cuts in selected markets.

The buzz beyond those selected markets? Not so good.

I'm not sure why the chain didn't anticipate the news spreading beyond those selected markets. Newspapers, television, radio, Web sites, blogs -- tons of media picked it up, prompting people outside the selected markets to ask why they won't get the breaks.

All that has led to an interesting online discussion by RetailWire's Brain Trust, a panel of retail experts.

Yes, retailers factor in competition, cost of transportation, and other market-specific characteristics into their pricing strategies. Both Dan Rafferty, president of Rafferty Resource Network, and Charles Walsh, president of OmniQuest Resources Inc., make the point.

This problem has been around forever. Price zones are an important tool for retailers to be able to squeeze pennies of profit out of operations, wherever they can. What's new is the increasing attitude of entitlement in our society. The whiners noted above completely disregard the variations in cost to serve different markets, the balance of competition, etc. They are also probably ignorant about the price zones that exist within a given geography. Unfortunately, entitlement bloggers get a lot of attention. (Rafferty)

Zone pricing isn't new, it is in fact vital to the profitable operation of a regional to national retail chain for reasons that we all understand. The consumer has benefited from the competitive nature of the retail industry and it's long run of moving food prices ever downwards. To complain that the price of a gallon of milk in an LA Albertsons is lower than my store in Boise is as ridiculous as complaining that the price of a gallon of gas in those two towns is different and that this is somehow unfair. Really people, grow up. (Walsh)

But the "whiners" and "grow up" comments seem a little harsh. I would think Albertson's could've anticipated this problem. So, apparently, did Camille Schuster, president of Global Collaborations Inc., who weighed in with this comment:

Unless an ad specifies a local area, nothing is local anymore for a chain with today's technology.

George Anderson, editor in chief and associate publisher for RetailWire, sums his views up with a "customer's always right" sort of tone:

It seems to us that when a retailer has a larger number of consumers who have a sense of entitlement, stores have one of two choices: 1. Address the needs (including perceptions) of those consumers. 2. Not worry about what the customer thinks and watch them walk to the nearest store that wants them bad enough to cater to their childish desires.

With United Supermarkets converting one of its Amarillo stores to an Amigos United -- its store brand that carries more Mexican and Latin American products -- an online discussion by the RetailWire Brain Trust seems relevant.

Reader comments posted to a Houston Chronicle story last week caught the attention of the Brain Trust, a group of people in the retail and marketing biz.

The article covered the opening of a Supermercado de Walmart at Spring Branch. There are, and will be, other Supermercados, and a Hispanic-themed Sam's Club, called a Mas Club, will open this summer.

The formats put emphasis on Hispanic products in the inventory and make other changes, like printing signs in Spanish and English.

One reader commented:

"What a bunch of hooey. they have to have thier own 'Sam's Club'? The
current ones arent good enough? This is really sad. I guess every other ethnic
group will want their own Sams Club. Since I am Irish-American, I want a
Paddy-O'toole's warehouse. Filled with beer and potatoes."

Some others roughly followed the same vein.

"I'm looking for a ... Caucasian Superstore to cater to whites."

The Brain Trust discussion nails down Walmart's reasoning with its own.

"Retail can be a bridge between cultures, and I think Walmart is doing a
much better job here than they had in the past. It's not like they converted the
whole store to Spanish-only. It's not like they converted a store in rural Iowa
to this format. Do people protest the Korean grocer? The Indian market?"

"If a business chooses to provide a shopping environment, products, signage
or anything else to cater to a customer -- seems like it is smart business to
me."

And, check out the comment of one Houston account executive:

"Not many Houstonians are going to bat an eye at Wal-Mart opening a store
that caters directly to the Latin element. Fiesta has been doing it since 1972
and operates 49 massive stores in Texas, 29 of which are in Houston. It's where
we go to get fresh corn tortillas and Tamarind flavored anything. ... So maybe
the question should be 'What makes Wal-Mart so sure it can compete with the
already saturated market of Latin-Centric purveyors in Houston?' I'm sure the
answer is the same way they dominate every market ... huge buying power,
efficiency of scale and low low prices."

Amarillo also already has grocers that provide a product mix aimed at Hispanic customers. United Supermarkets will try to tap into that market when the remodeling of its store at East Interstate 40 and Grand Street is completed and opened under the Amigos United banner.

I'm looking forward to seeing what's there that I can't get at the so-called "regular" stores.