TAMPA, Fla. -- Less than a year after Kash n' Karry discontinued a company owned and operated video rental program, the retailer has put in 12 racked, revenue-share departments. The 12th Trader Bay section opened last month in a new 36,000-square-foot store in Brandon, Fla., and more are being considered, said Ron Dennis, president of the chain.
"Video rental is a viable market and a big business," said Dennis. "It can capitalize on one-stop shopping. Where we have the options in space, we are looking to expand the departments." The first department was installed in February, Dennis said. The small live departments occupy 300 square feet of floor space, containing 1,500 to 1,600 titles, he said. They are positioned up front near the service counter.
The departments are serviced by Home Cinema, St. Petersburg, Fla., a company owned by John Colinda. At one time, Colinda supplied Albertson's rental sections in the Florida division and he owns several video specialty stores in the Tampa Bay area, said local sources. Colinda did not return calls for comment.
So far, the new rental departments "are doing very well," said Dennis, a former divisional vice president with Boise, Idaho-based Albertson's. "Having come from Albertson's, where video rental was a success, I felt it was a category we should be in," Dennis said.
Kash n' Karry plans to expand the video rental program to other stores, although Dennis declined to provide any further details. "We're exploring all opportunities because video rental is a viable option that I think we can do a better job of serving the customer with," he said.
Video industry sources said the retailer's original plan was to put in 20 rental departments. The chain has 100 stores and had 60 in-line rental departments until it ended its in-house program last fall. The old nonlive departments ranged from 48 to 60 linear feet with as many as 2,000 rental units per store.
Last summer, Bob Highsmith, Kash n' Karry's vice president of sales and marketing, told SN that the chain could get a better payback out of using the space for other products. He also said competition from big specialty stores and the cost of remodeling the departments was a factor in the decision to get out of rentals.
The retailer stayed in the video sell-through business, primarily with the big event titles, like "Space Jam" and "Hunchback of Notre Dame." However, when SN visited several Kash n' Karry stores in March, sell-through merchandising was constrained by concerns about shrink, according to store personnel and other local observers. At the time, SN found Albertson's to be the leader among Tampa Bay area supermarkets in sell-through merchandising and in video rental activity.