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In Pennsylvania, the Patriot-News reports that a new 132,000-square-foot Wegmans is shaping up as new and formidable competition in the Harrisburg market for Ahold-owned Giant Food, which dominates the food business there. Giant got aggressive even before Wegmans opened, lowering the prices on 10,000 items at about 20 area stores. And the expectation is that Giant will continue to fight back against Wegmans, refusing to go down quietly in the face of such impressive competition.

Indeed, Giant has experience with competition, with Weis Markets being a tough competitor in many communities. Dennis Curtin, a spokesman for Weis tells the Patriot-News that when it has competed wit Wegmans in the past, it has fared "very effectively" in terms of prices, convenience of locations and the quality of its private-label offerings.
KC's View:
My first reaction to this story was that lowering prices may not be the best way to fight against Wegmans, since that isn’t necessarily what that legendary retailer is known for.

But then I thought back to the time I had a chance to moderate a focus group near Washington, DC, that was made up of people who shopped at Wegmans regularly. We wanted to find out what they liked best about Wegmans. The fresh foods? The sales help? But it ended up that almost to a person, they said they liked the prices.

This astounded me, until I drilled down a little bit. They said that in center store, they found the grocery prices to be highly competitive. In fresh foods, they said, they got s much more value for the money that they considered the prices to be excellent.

This was interesting, because that’s not how I would have interpreted an endorsement of Wegmans’ prices. You say you like the prices, I immediately think “cheap.” But that’s not how consumers necessarily think…and we al have to be willing to drill down to find out what really matters to shoppers.

You can bet your bottom dollar that Wegmans knows. The question is whether Giant has done the same kind of research. If it is, the battle in Harrisburg ought to be very interesting.