(UPDATED COVERAGE, 12:45 p.m.) Schnuck Market Inc., which runs 105 Schnucks grocery stores in the Midwest and South, is cutting prices on 1,700 popular items throughout the store, but bananas are the only fresh produce item involved in the cuts.  

The retailer rolled out the Peace of Mind Pricing program Jan. 16.

St. Louis-based Schnuck recently surveyed consumers on how to meet their needs and “everyday low pricing” (similar to Wal-Mart’s “everyday low prices”) on most-purchased items topped the list. The use of “everyday low prices” is based on that consumer feedback, not a response to Wal-Mart, Schnucks’ spokeswoman Lori Willis said. The program is part of a new business model that follows on discounts Schnucks has applied for several years, Willis said.

Willis said bananas are the only fresh produce product included in the discount program because they are among the most popular items mentioned in customer surveys, Willis said. A typical Schnucks store carries 45,000 to 50,000 stock-keeping units, she said.

Bananas “are the highest-volume product, the ones that are in the carts every week,” Willis said. “It doesn’t mean (discounts) won’t be extended to other items down the road.”

Traditional supermarkets are facing stepped-up competition not only from Wal-Mart, but also from general merchandisers and drugstore chains such as Target Corp. and Walgreen Co., which have expanded fresh food offerings, industry consultant Phil Lempert said.

The increased competition is forcing traditional retailers to think differently especially when it comes to value, said Lempert, who runs SupermarketGuru.com.

“Schnucks is one of the great retailers out there, and in order to stave off their shoppers heading to other locations to buy foods, they need to keep competitive,” Lempert said in an e-mail. “By highlighting these staples like milk, which typically can be bought less expensive at drug chains, they keep their customers happy in their stores.”

In early 2010, Wal-Mart expanded its “everyday low prices” across most food categories. In mid-January, Wal-Mart vowed to reduce prices on fresh fruits and vegetables as part of a broader effort backed by first lady Michelle Obama to sell healthier foods.

Privately-held Schnucks operates stores in Illinois, Indiana, Iowa, Missouri, Mississippi, Tennessee and Wisconsin.

Schnucks launches Peace of Mind campaign