Ralphs Bucks Slump in Plain Wrap by Using Madison Avenue Methods

In the penny-pinching days of double-digit inflation, generic products blossomed on supermarket shelves across the nation. But the decline in inflation has signaled a similar, steady decline in consumer interest in the plain-wrap products.

Compton-based Ralphs Grocery Co., however, says it has bucked the trend by promoting its plain-Jane goods with some of the same Madison Avenue techniques that have helped make many name-brand grocery products household words.

What’s more, the chain has gone to unusual lengths to place its telltale blue-and-white generic label on some unusual items.

The company, for example, has a “generic flag” flying in front of its corporate headquarters on West Artesia Boulevard. Ralphs stores also sell a generic toy truck and a teddy bear for $7.95 each, and the company has distributed free generic bumper stickers (labeled “bumper sticker”) and a generic greeting card, offering the sender a checklist of holiday greetings, plus congratulations for a birthday, anniversary or even a sex-change operation.

Ralphs’ success in marketing generic products may or may not be unique among Los Angeles grocers; spokesmen for two major Southern California supermarket chains--Vons and Boys Markets--declined to discuss the topic.

Nevertheless, it is an unusual twist that Ralphs has successfully been able to use Madison Avenue tactics to promote plain-wraps--a $2-billion category that between 1980 and 1983 doubled its market share nationwide with virtually no advertising or promotion.

Ralphs, whose 126 grocery stores stock 500 generic goods among about 25,000 name brands, has been heavily advertising its generics, saying the plain-wrap goods can save consumers “up to 50%” over name brands.

“The key to our success has been maintaining our quality standards” and offering a wide variety of products, said Al Marasca, executive vice president of marketing. “Whenever we show a plain-wrap product we also show the savings over the leading brand. What we have found now is that in most cases, the plain-wrap product is the leading seller in the item category in which it competes. As people started trying these new products the momentum built.”

Generics, grocers say, initially proved more popular among college-educated, affluent and upwardly mobile shoppers than among financially hard-pressed consumers. Yet although well-heeled shoppers continue to buy basic generics such as paper products, aluminum foil, coffee filters and cat litter--all of which continue to hold more than a 5% share of their product categories--the finicky Yuppies have soured on many food products whose taste or physical appearance fall below their expectations.

“As inflation has slowed down, people became less and less aware of saving with generics,” said Alan Miller, a vice president at Selling Areas-Marketing Inc., a New York research firm. “Another important factor is that (brand name) manufacturers began to fight back with . . . more (cents-off) coupons” and with lower-priced lines of products.

Although Ralphs officials declined to disclose figures on annual sales of generic products, Marasca acknowledged that not all of the store’s generics have been a hit with consumers.

Generic coffee was taken out of Ralphs stores after the product languished on shelves. The problem? Officials say consumers apparently preferred their coffee packaged in tin cans rather than plain-wrap paper bags.