Hughes Markets Inc. will begin offering a 5% discount on most of its goods Wednesday to people 65 and over, in what the company is touting as the nation's first across-the-board supermarket discount program for senior citizens.
The program is the latest sign of increasing business interest in one of the fastest growing population segments in the United States. Airlines, movie theater chains, car rental companies and hotels are among the service industry firms offering discounts to senior citizens. A number of supermarket chains across the country also offer senior citizen discounts on a few goods.
Los Angeles-based Hughes said it will offer the 5% discount on most items in all 52 stores. Hughes said the discount program will not apply to advertised specials, alcoholic beverages, tobacco products, postage stamps, items purchased with coupons and certain dairy items that--by law--cannot be discounted.
"We decided to do this because there is a need to do something special for seniors," Chairman Roger Hughes said. "Seniors have financial needs. Most are on a fixed income when they reach the age of 65. I'm sure this will appeal to (senior citizens) who are not our customers now."
Program participants must obtain a Hughes "Premier Check Out Card."
Hughes has not been known as a low-cost leader in the Southland supermarket scene, and the discount program is designed to bolster the chain's image, said Gary M. Giblen, a PaineWebber food retailing analyst in New York.
The seven major chains operating in the Los Angeles area frequently offer conflicting reports and advertising claims on comparison pricing. A recent independent survey by the nonprofit California Public Interest Research Group concluded that Hughes had the fourth lowest prices among six major chains--ranking behind Lucky, Vons and Albertson's.
However, Hughes says it is impossible to assess the accuracy of the survey because it has not shared its raw data with grocery chains.
If Hughes--ranked sixth in revenue among Los Angeles-area grocery operators--is able to attract more customers from the over-65 group, it could gain on its competitors, Giblen said.
"The cliches about the 'age wave' are true," Giblen said. "The older segment of the population is growing, and a broad-based, price (discount) approach has not been tried."
Nationwide, those 64 and older made up 12% of U.S. shoppers in 1982 but now account for 15%, according to the Washington-based Food Marketing Institute. In contrast, those between 25 and 39 accounted for 38% of shoppers in 1982 but are now 25% of U.S. buyers.
The percentage of older people in the population is growing because the birth rate has been dropping and the huge baby boom group--those born between 1945 and 1965--is moving into middle age and beyond.
Some supermarket chains have already made modest efforts to lure older buyers. Grocery operators in Ohio, Texas, Virginia and Missouri have offered discounts on pharmaceuticals, coffee and bakery goods, Food Marketing Institute spokeswoman Karen Brown said.