IGA Australia Launches Supa Valu Discount Stores

IGA stores are known worldwide for tailoring their services and offerings to meet the needs of their communities. As independents, it's not just what we do best—it's also our way to differentiate against any chain competitor that comes our way. But what happens if your store is in an economically depressed area and what your shoppers need are the dramatically low prices they find at deep discounters like Aldi and Costco? How do you compete with the chains that are branded and well-known as the low price leaders? The IGA Australia solution is simple: you take what the deep discounters do and do it better. 

Two IGA Supa Valu stores recently launched in New South Wales, Australia—the first in Doonside, a Sydney suburb, and the second in Ballina, which is in the Northern Rivers region. “These are the first two store formats of their kind in Australia, part of IGA’s Network of the Future,” an IGA Australia spokesperson says. They offer independent competition to large discount grocers, which keeps the brand at the front of shoppers' minds.

What makes these stores different? Besides the low prices, which, thanks to their bulk discounts allow the IGA Supa Valu stores to go head-to-head with discounters like Aldi and Costco on price, they have a variety of stock, from the unique and local products found at other IGA stores throughout the country to quality meats and bakery products. “We buy in bulk, so you don’t have to and so that shoppers can save big," says the spokesperson. "We have pallets of items so that we will always have enough stock of the things you need.”

Those pallets add to the warehouse-style format, which includes wide aisles and a middle aisle, called Valu Alley, featuring significantly discounted items. “The center aisle isn’t about making you buy in bulk or providing strange special offers—it is about providing the lowest prices on the brands you love,” the spokesperson says.

A Valu Alley assortment at Supa Valu in Ballina.

Developed by Romeo’s Retail Group, Ritchies IGA, and the wholesale distributor Metcash Foods, the team are planning to open six more stores across Sydney. “We are looking at more sites in western Sydney, north of Sydney and also down south,” Joseph Romeo, owner of Romeo's Retail Group, says.

And while the new store format certainly mimics those larger discount chains, the charm and local offerings that IGA shoppers love remain in these Supa Valu stores, like their meat and deli departments, which feature hot roasted chicken, rump steaks, beef sausages, and more.

Bulk beef sausages and beef rump steak were on sale last week at Supa Valu IGA in Ballina.

As their website says, "Yes we are a large store providing SUPA DEALS right across the store, but that doesn’t mean we trade off other things that are important to you. Like offering great service and we’re SUPA big on supporting local suppliers and our local community. We look forward to sharing some SUPA big smiles when we see you in store."

That commitment to service and specialized offerings is what makes IGA Australia's Supa Valu stores stand out from other warehouse stores and deep discounters, and those same points of difference are what IGA CEO John Ross sees as making IGA work in the growing cost plus format in the U.S., where retailers set shelf pricing for every item in the store at their cost (the item, transportation, and warehousing costs and labor to get it on the shelf) and then simply charge shoppers an additional 10 percent of their total basket at checkout.

"We see 'cost plus' as a viable pricing strategy for independents in the right markets here in the U.S., but we also want to see it done the IGA way—with a continued commitment to high quality service and offerings," Ross says of the new cost plus model IGA USA is exploring. "The mistake a lot of discounters made in the past is assuming that value-based consumers don't care about quality and service. In my mind, everything we do should be about respecting the shopper. Why shouldn't every shopper have access to high quality products? Why shouldn't every shopper be treated well in our stores? Sure it will be a no frills store, but if it's clean, well laid out, has choices when it comes to national and private label products, and differentiates on service and high quality offerings like fresh meat, that could be an extremely attractive option for independents, wholesalers, and shoppers alike."

Click the above image to hear Supa Valu IGA shoppers share what they think of the prices at the store. 

It's certainly working for the IGA Australia market. Shoppers are loving value and assortment at the IGA Supa Valu stores, with one telling Yahoo! News, “I travel all the way from Kings Langly [another suburb] with my sister at least twice a week,” and another saying, "I absolutely love it and that’s the reason I keep coming back.”