• by Sarah Mahoney  @mahoney_sarah, May 15, 2008

Hoping to capitalize on rapidly rising food and gas prices, Bi-Lo, the Southern supermarket chain, is launching a new marketing campaign. The company, which began a rebranding effort last fall, is offering an extended version of a gas gift card program it has been experimenting with for the last two years, in various markets.

"We thought the current rising prices in both fuel and food was a great opportunity to expand the program, with enhancements," says John Gianakas, VP/marketing of the Mauldin, S.C.-based chain. "Consumers can win a free gas card with just eight tokens now, instead of ten. And there are now many ways to get them, from specially priced Coca-Cola products to certain purchases in the deli department."

In a recent Chattanooga, Tenn. store test, he says, more than 260 shoppers managed to pick up enough for the free gas card in just one shopping trip on the promotion's first day.

While such promotions drive home the concept of value, he says the chain didn't want to miss a chance to stress product quality as well. So it's launching new TV ads that focus on product auditions, with a picky assistant manager turning thumbs-down on all but the finest goods. In one case, the loser is a too-skinny chicken. "Our rotisserie chickens have to feed a family of four," he says, "and no offense, but you couldn't feed four supermodels."

"Don't worry," he consoles another reject. "I'm sure some store out there wants wilted lettuce."

"We thought it was a good time to be funny. We wanted to convey our core values with humor, and these audition spots let customers know how high our standards are--not just in produce, but across all departments," says Gianakas.

The ads were created by Erwin-Penland, which is part of Hill Holliday.

Bi-Lo's main competitors are Wal-Mart, which he says is in direct competition with 80% of its 250 stores, and Food Lion.