A number of higher-end grocery stores, such as Whole Foods Market, Publix and Harris Teeter, are trying to woo cost-conscious consumers as they search for bargain prices or cut back on luxury spending, The Tennessean reports.

All three stores said they are offering more discounts on basic food items from milk to produce and touting store brands as cheaper alternatives.

"I think the main message retailers are getting loud and clear is value for money is more important to more shoppers than it was a year ago," said Bill Bishop, chairman of Barrington, Ill.-based food and retail consultant Willard Bishop. "They've got to figure out how to deliver greater value for money."

Whole Foods may face the biggest challenge.

"It's kind of a sign of the times we have more consumers looking for value than ever before," said Ron Paul, president of Technomic Inc., a Chicago-based research firm. "The 'whole paycheck' image gives them a poor price image and they are starting to fight back."

Nashville Prices Stable
In June, the latest month with complete data, consumer food prices increased 5 percent nationally compared with a year ago, according to the U.S. Bureau of Labor Statistics.

But in the Nashville area, based on a supermarket survey by The Tennessean last week, prices of a market basket of 16 basic items remained flat compared with prices two months ago. Consumers would have spent $39.71 for the grocery cart of goods in mid-June and $39.22 for the same items last week, the survey found. Prices at several area stores were checked and then averaged for each item.

Some costs rose over the two months, though. The average price of boneless chicken breast increased 12 cents a pound, a dozen eggs were up a nickel, and cheddar cheese increased 32 cents a pound.

"It's hard on people," said Jan Housman, 54, who clips coupons and looks for deals on food.

In a recent survey by the Arlington, Va.-based Food Marketing Institute, about
37 percent of shoppers said lower prices are the top reason they pick one store over another -- a consumer-choice factor that rose by 6 percentage points compared with a similar survey last year.

Supermarkets are taking note. Lakeland, Fla.-based Publix offers more "buy one, get one free" deals as well as coupons that let consumers get a private-label item for a penny after purchasing a certain amount of other merchandise.

Harris Teeter recently launched a "Budget Stretchers" program with savings on bread and "buy two, get one free" incentives.

"The troubles with the economy are migrating up the income scale," said Stephanie Hoff, an analyst at Edward Jones in St. Louis.

"We're responding to the economy. We realize customers are trying to cut back and save where they can," Publix spokeswoman Brenda Reid said.

"Every day is a battle for everybody in the industry because prices fluctuate so frequently. We have to stay abreast of what our competitors are doing, what prices they are charging, and price our products competitively," Reid added.

Whole Foods' Stock Falls
Whole Foods Market Inc., the largest U.S. natural-foods grocer, has seen its stock fall nearly two-thirds in value since hitting a 52-week high above $53 a share many months ago. On Monday, the stock closed at $19.73 a share on Nasdaq.

Sales prospects for the fourth quarter look iffy. Last week, the grocer said fourth-quarter profits would be far less than stock analysts had anticipated as the supermarket chain watches its sales growth stall at many stores amid soaring utility and fuel costs, and other pressures on consumers.

Whole Foods operates two stores in Nashville -- one it built new in Green Hills and a Wild Oats outlet it took over and has renamed in Cool Springs. It also has a store in Memphis that still carries the Wild Oats name.

"You have to eat, but Whole Foods is an aspirational store, so they're more hurt in this environment than traditional grocery stores," said Edward Aaron, an analyst at RBC Capital Markets in Denver. "Those perceptions are definitely hurting the results."

Revenue in the three months ended July 6 rose 22 percent to $1.84 billion for Whole Foods, but sales growth at stores open at least a year slowed to 2.6 percent from 6.7 percent the previous quarter. Some analysts had estimated same-store sales growth would increase about 6 percent.

"A 2.6 percent (result) is really worrisome," said Hoff, the Edward Jones analyst. "The trend could last for a while. This number is below some of the mainline grocery stores, which suggests a (market) share shift."

Value Tours are New
Meanwhile, Whole Foods started its value tours this summer, calling some of its employees "value gurus." They tell shoppers how to save money by looking for store brands or buying in bulk more frequently.

Some Whole Foods Market customers remain skeptical, though.

"I'm mortified by the expense here," said Bill Lane, 68, of Forest Hills, who sampled some organic cookies at a Whole Foods last week. "It's hard not to come and spend $100."

In-house value guru Bergmann, who said he spends about $400 a month at Whole Foods for himself and his wife, counters that many of the items priced higher in Whole Foods' aisles are specialty foods with higher-quality ingredients.