Meijer Feeding Worried Customers This Christmas

(MoneyWatch)  Retailers who combine food, general merchandise and value have been surviving the recession better than most, but even Wal-Mart and Costco haven't been as creatively aggressive in using that formula to promote their stores as has Grand Rapids, Mich., based Meijer.

With stores in Michigan, Ohio, Indiana, Illinois and Kentucky, Meijer has recently benefited from trouble at Sears Holding, which reduced the threat from Sears and Kmart. But it has been getting socked by the expansion of Wal-Mart and Target in the markets where it operates. In response, Meijer has become more food oriented, expanding service and gourmet operations as it builds in better apparel, housewares, electronics, pet products and sporting goods. Even when introducing fancier products, though, it promotes value -- for example, placing wine near the prepared dinners it displays to offer a less expensive but elegant alternative to eating out.

More pointedly, Meijer has taking pains to convince customers that it understands when and where they need a break. For instance, as gas prices marched upward over the past couple of years, the retailer introduced a service that notified customers by cell phone shortly before it increased fuel prices at its store-run pumps in an effort to address the gas price concerns of customers in the drive-everywhere Midwest. Also, as drug chains, discounters and supermarkets lowered prices on generic prescription drugs, Meijer decided to provide the antibiotics most often prescribed for children free of charge, an initiative it positioned as a service to families pressed by increasing medical costs and bigger insurance contributions.

Now word comes that Meijer is providing a twist on a typical holiday promotion. As the season culminates, it is offering shoppers five-percent-off coupons for their next grocery purchase when they spend $100 on general merchandise, including apparel and housewares. Shoppers who spend enough can get up to four coupons in any single trip, then combine them for a maximum 20 percent savings on their next visit. Checkouts have been churning out the coupons since the program began on Nov. 30, said Meijer spokesman Frank Guglielmi, and will continue to do so as the late holiday shopping period peaks on Dec. 24. Consumers can redeem the coupons through Dec. 31.

Grocery promotions usually involve rewarding customers who buy a lot of food with a seasonal gift, classically a turkey. However, with the auto industry -- a key Midwest employer -- planning furloughs and outright layoffs, Meijer is falling into line with this season's trend of practical holiday giving. It is sending a message to folks who may be celebrating the holiday season while wondering how they'll continue paying for groceries that it -- not Wal-Mart, not Costco -- best understands their worries.