CHANDLER, Ariz. -- Bashas' Markets here is in an aggressive expansion mode with video rentals.
With two departments that opened last month and another planned for November, the chain will have added a total of 24 departments within a year, said Bill Glaseman, video specialist. This includes the 14 departments in Mega Foods stores acquired by Bashas'. The chain will add four more departments by January, he said.
All of Bashas' principal competitors in the area -- Fry's, Albertson's, Smith's, Kroger and Safeway -- also have strong commitments to the video rental category, putting departments in all new stores, he noted. But Bashas' video expansion is more than a reaction to competition. "It's part of Bashas' overall strategy of what the video department is supposed to do: bring people in to rent and then bring them back to return."
Bashas' now has 93 stores and 53 video rental departments, Glaseman said. All these stores have banks along with video. The chain also has an ongoing sell-through program mostly using in-and-out shippers. Sell-through is bought separately from rental by the chain's general merchandise department, he said.
All the new departments are live inventory in about 500 square feet, with 2,000 rental units, 25% of which are new releases, he said. Mega Foods stores continue with the nonlive merchandising used by the previous management.
Rental rates vary by store, he said. For example, the Mega Foods departments are at $1.49 for new releases and 59 cents for catalog. Typical Bashas' rental rates are $1.99 for new releases and 99 cents for catalog, "but stores are up and down from that depending upon location and competition."
Bashas' suffered through the same downturn in rental revenues that the overall industry did earlier this year, although not as severely, he said. Then, "we saw an uptick this summer."
Rental revenues are now up for the year. "As I look at the reports, I see some stores that are considerably ahead of last year and some that are just about even. So I would say that the overall picture is satisfactory," said Glaseman.
Upgrading the Mega Foods departments played a role in the improved numbers. This involved cleaning out many old titles, selling them off in a tent sale, and bringing in more new releases, he said. "Now they are operating the way we feel they should be.
"The stores and the customers are very happy that the new releases are being presented weekly, as they should be. Also, they have very good service personnel who take good care of the video departments," he said.
Meanwhile, Glaseman is monitoring video industry developments, like the digital video disc. "We don't know where that is going, but I am taking a good strong look at it anyway. It's going to be quite a while before it becomes a real factor, but if it does, we will be there," he said.
