Supermarkets are being squeezed, and that is driving new sponsorship activity.

Facing increased competition from national dollar stores, supercenters and e-commerce sites, supermarkets are using sponsorship to promote one key differentiator: their local positioning.

Traditional supermarkets experienced the largest decrease in market share among all grocery store formats in 2013, according to Willard Bishop, a consultancy for the retail and CPG industries.

One key reason: lingering fallout from the Great Recession.

“We’re seeing a hallowing out of the middle class and the challenges that poses for traditional supermarkets. Companies that serve the upper end are doing very well, and companies that serve the value end are doing very well. Almost every regional supermarket chain is running into trouble,” said Jim Hertel, managing partner with Willard Bishop.

Exemplifying those struggles, Roundy’s Supermarkets (Milwaukee); Rainbow (Minneapolis) and other traditional supermarket chains have posted a two-to-four percent year-over-year decline in average transactions, he said.

THE MOST ACTIVE SPONSORS IN THE SUPERMARKET CATEGORY
THE MOST ACTIVE SPONSORS IN THE SUPERMARKET CATEGORY

Nineteen percent of properties with a sponsor in the supermarket category report a partnership with a Kroger Co. brand. 

Sponsorship Hot Buttons In the Supermarket Category
Supermarkets use sponsorship to accomplish the following two objectives:

Demonstrate local roots. Regional supermarket chains are increasingly using sponsorship to demonstrate their local roots and offset competition from national chains.

“Supermarkets want to position themselves as home town companies, and many trade on it. A partnership with a local sports team or community event is a great way to demonstrate local roots,” said Hertel.

Supermarkets frequently activate sponsorship to support local nonprofits.

Quality Food Centers’ new partnership with the WNBA Seattle Storm affords presenting status of the team’s 50/50 raffle, an on-site fundraiser in which a local nonprofit raffles tickets to an upcoming game. The winner receives 50 percent of the funds with the nonprofit receiving the rest.   

The Storm will host the raffle at 17 home games, each in support of a different nonprofit.

“We conduct the program to raise money for local nonprofits, and QFC loved the idea,” said Nate Silverman, Seattle Storm vice president of marketing partnerships.

The Storm also has a partnership with Fred Meyer. The retailer uses the tie to promote its community awards program, around which it donates a percentage of each purchase to a designated nonprofit.

The team promotes the charitable giving program on TV inventory, in-arena signage and digital assets.

Fred Meyer and QFC are both owned by The Kroger Co.

Drive store traffic. While demonstrating community involvement is priority number one for most supermarkets, many use sponsorship to drive store traffic.

Supermarkets accomplish that task in a number of ways ranging from the sale of presale tickets to vendor cross-promotions. 

Kroger leverages its sponsorship of the Columbus Zoo and Aquarium by serving as the exclusive sales outlet for the zoo’s Conservation Series wine. The zoo promotes the retailer on placards placed next to bottles of the wine and other messaging at on-site bars and restaurants.

The retailer also sells discount tickets for the zoo at 125 stores across central Ohio, a benefit the zoo promotes across its media buy.

“Properties need to be ready to put programs together that drive people into stores. Otherwise retailers won’t have a reason to continue the investment,” said Justin McKinniss, head of strategic partnerships at the Columbus Zoo and Aquarium. 

Kroger has sponsored the Columbus Zoo for more than 30 years.

WHERE SUPERMARKETS SPEND MONEY
WHERE SUPERMARKETS SPEND MONEY

WHERE SUPERMARKETS SPEND MONEY IN SPORTS
WHERE SUPERMARKETS SPEND MONEY IN SPORTS