The Untold Truth Of Save-A-Lot

Even if you don't shop at Save-A-Lot, you've probably at least driven by a few of these small scale grocery stores that are sprinkled throughout the landscape of the United States. They aren't known for having full-service delis or pharmacies the way the bigger stores like Albertsons and Kroger are. In fact, their whole model has been pretty bare bones for the past four decades and that's exactly the way they like it.

That model of having smaller stores with a limited selection of brands and items has served Save-A-Lot well. They're known as a cost-effective place to shop, and often can be found in communities undeserved by the larger grocery chains. All is not entirely well for Save-A-Lot though, and in recent years they've struggled with expanding competitors and corporate shakeups. But the Missouri-based grocery chain isn't going down without a fight. Let's take a look at the untold truth of this grocery store that's all about giving people the basics at low prices.

If you're new to shopping at Save-A-Lot, you won't make it too far down the first aisle before you notice something a little different: You won't recognize most of the brand names. Sure, you might see a few familiar brands like Hershey's Kisses or Banquet frozen dinners, but how about Lecour's Finest Creme Betweens? Have you ever heard of Kiggins Hoot'n Honey cereal?

Part of the secret to keeping their prices so low is selling only the most purchased items and selling their own brands. "We carry one size and one variety of each item," Save-A-Lot communications manager Dan Kimack said. "If it's a can of whole-kernel corn, it's going to be one size and one variety, and it's going to be the most popular size and variety."

Make no mistake about it — limited brands doesn't mean limited items. In fact, there are more than 100 brands in the store that the chain can count as its own. So while Save-A-Lot may not have 15 national brand varieties of oatmeal to choose from, the limited variety they do carry ensures a lower bill upon checkout.

If Whole Foods is marketing itself to higher-income shoppers obsessed with organic produce, Save-A-Lot is at the other end of that spectrum. The particular demographic that Save-A-Lot is going after are the shoppers many grocery chains overlook — folks on a fixed income who don't want to comb through 20 aisles at Walmart for groceries.

"I'm on disability and really have to watch how I spend my money," shopper Betty Duffey told the Tampa Bay Times. "At Publix, I'd spend $200 a month for groceries. At Winn-Dixie, I'd spend probably around $150. But at Save-A-Lot, I'll spend $80 for the same amount of food."

Save-A-Lot's stores are often in lower-income neighborhoods where many of their shoppers have incomes under $35,000 and depend on having a grocery store that doesn't require a 10-minute drive. "Our goal is to be a neighborhood grocery store, which means we serve people who live within two to three miles of the store," company spokesperson Chon Tomlin said.

And when a store closes, it can be especially hard on residents of the area who depend on it. "It is disappointing to lose a grocery store that serves a large neighborhood," county economic development manager Dianna Cantler said after the 2018 closure of a Save-A-Lot in Johnson City, Tennessee. "Once again, the North Side community will be a food desert, with nothing within a walkable distance."

Save-A-Lot wasted no time in establishing its grocery store foothold in the United States and had amassed more than 50 locations in its first three years of business. But most of those locations were in the Midwest and eastern part of the country. The company has expanded into the north and as far west as Colorado, but making itself a staple of West Coast shoppers has been largely unsuccessful. (Californians won't likely be abandoning their beloved Trader Joe's anytime soon.) 

Save-A-Lot wanted to give West Coasters a shot at grabbing their low-priced cereals and other products with funky names, but it simply didn't pan out. The initiative began in 2015, and by early 2017, the company announced that it would be shuttering all of its California and Nevada locations, saying it would be "better served by investing in areas where its brand equity is already well-established." That's polite talk for "you don't want us; forget you then!" 

It's probably a safe assumption that Aldi opening 45 stores in California around that same time didn't exactly set out the welcome mat for Save-A-Lot. "I'm not saying we won't ever go there, but there's a time and place for everything and this wasn't the time," then-CEO Eric Claus said.

Part of Save-A-Lot's strategy for keeping prices low and appealing to its customer base has been cutting out in-store options like the full-service deli or pharmacy. The company attempted an experiment with adding a pharmacy  — sort of — in 2010 when it signed a deal with pharmacy mega-chain Rite Aid to start co-branding certain locations.

Rather than invite Rite Aid to take up residence somewhere in an existing Save-A-Lot, it worked the other way around with the grocery chain moving into the front of Rite Aid stores, and existing Rite Aid pharmacies keeping their spots in the back. The locations were primarily in South Carolina, and offered a smaller selection of goods than a typical Save-A-Lot.

At the time, industry experts were optimistic about the corporate mashup. Grocery store analyst Gary Giblen wondered, "If a combination store can work by adding nonfoods to a supermarket, why shouldn't a smaller combo work adding a supermarket to a nonfoods store?" 

The experiment wasn't destined for greatness however, and Rite Aid faced a restructuring and financial troubles in the years that followed. Out of the initial 10 Save-A-Lot/Rite Aid combo stores, it appears most of them are now out of business. 

From Save-A-Lot's earliest beginnings until the mid-2000s, founder Bill Moran was the head guy in charge. That changed though, when Moran retired from the company in 2006. Since then, the company has had trouble retaining a CEO for any length of time.

Moran's replacement Bill Shaner led the company for just five years before being replaced by Walmart executive Santiago Roces. A 2011 announcement said Roces would aid in accelerating Save-A-Lot's plans to more than double their number of locations, resulting in more than 2,400 stores by the end of 2015. But by January 2013, Roces was long gone and the company still had around 1,300 locations — some 1,100 off its lofty goal.

Roces lasted two years with Save-A-Lot before being replaced by Ritchie Casteel in 2013. Thankfully, Casteel stuck with the company and led it to new horizons — only kidding! He was out by early 2016, when former Red Apple CEO Eric Claus came in. 

So why has Save-A-Lot's CEO office been a rotating door the past decade? Supermarket consultant David Livingston told the St. Louis Post-Dispatch in 2013 that he suspected they were hoping a turnaround specialist could right the ship. "But they have a massive amount of debt," Livingston said. "And they have some retail concepts that don't seem to be resonating with the consumer. So just having some new people in there isn't going to change that fact."

By choosing to carry items like its own brand of Capri Sun called Splash Out!, Save-A-Lot is able to offer customers near identical products at a fraction of the cost they'd pay for a national brand. But it's not just the selling of its own brands that keeps prices low. Other factors are certainly at play in Save-A-Lot's recipe for customer savings.

For starters, those smaller stores mean that each location needs fewer employees to run the operations. Around 20 employees are needed at each store, versus Publix where stores might have hundreds of employees. It's the "lean efficiency" model that Save-A-Lot spokesperson Chon Tomlin said helps in keeping prices low.

Save-A-Lot also puts serious focus on making sure that unnecessary packaging doesn't result in an item's price ballooning. Because the company owns many of its distribution centers, they're able to do a lot of packaging without having to rely on shrink wrap. Products go right from their manufacturer to Save-A-Lot's distribution centers in the item carton case. This simplified system translates to lower costs for shoppers.