PHILADELPHIA -- Facing attacks from alternative formats in traditional nonfood departments, Big V Supermarkets, Florida, N.Y., counterattacked with strategies to keep its nonfood competitive.
The chain, which operates 31 stores in New York, Connecticut and New Jersey under the ShopRite banner, began an every-day-low-price policy and applied category management to what it considers nonfood power categories.
The retailer was spurred to action when a Super Kmart Center opened directly opposite a ShopRite store in Kingston, N.Y., that already was battling other trade classes located along a 5-mile strip.
Big V's strategy allowed it to face off more effectively against the "leading-edge competitors including Wal-Mart, Pet Nosh, Party Box, Office Max, RX Place and other category-killer discounters," said Dominick Guarneri, the chain's director of general merchandise, health and beauty care and pharmacy, during a presentation at the Food Marketing Institute's annual GM/HBC conference here last month. The notion of a large supercenter being built across the road was "somewhat unnerving," Guarneri told a workshop entitled: "The GM/HBC Arsenal and Category Management." Through category management, developed by its co-op wholesaler, Wakefern Food Corp., Elizabeth, N.J., the chain remerchandised the following categories in its 55,000- to 65,000-square-foot stores: greeting cards, party goods, reading and pet, stationery, home and office, photo, audio/video, baby, cosmetics and hair care. The replanogrammed sets were recast with top-selling, faster turning velocity items.
While most chains have taken an aggressive position on these in-line departments as well as in supporting promotional activity, Guarneri said, food retailers must "protect our franchise in these categories from competitive attacks, and increase sales and spacing." For this reason, Big V has started everyday-low-pricing and expanded presentations in batteries, lightbulbs, automotive and blank video tapes. The move will "entice our customers to continue to purchase these items at our stores. There's no reason for a shopper to leave our supermarket and go elsewhere for these categories. Our objective is not to have them do that," Guarneri said.
Image departments such as greeting cards, party goods, reading centers, photo shop, pet supplies and prerecorded audio and video have the greatest effect on nonfood sales for a supermarket, he added.
"When properly sized and highlighted, these sections will have the greatest impact on customer perception of the general merchandise offering for the entire store," he said.
Recent successful general merchandise promotions at Big V included a bargain book blowout that generated over $85,000 in sales in a four-week period. The chain may repeat the promotion early next year. A first-time truckload sale of 130 Avanta brand refrigerators retailed at $399 sold out completely. The refrigerators carried 20% margins and were supplied by Wakefern.
The appliances were merchandised in-store by the checkouts and under a tent on the parking lots of two Big V stores in a seasonal outdoor-living campaign during July and August. The mix also included gas barbecue grills, swimming pools and white resin chairs, of which 5,000 were sold during the promotion. Guarneri pointed out that in the past 10 years supermarkets have taken a tremendous hit in nonfood. During the decade, supermarkets' market share in nonfood has dramatically dropped from 28% to 19%. Meanwhile, mass merchants have gone from a market share of 17% to 27%. Even in the pet category, superstores now have a 26% share of the market, Guarneri added.
But Big V has decided to fight back against the large pet supply warehouse outlets invading the East Coast. It is enlarging its pet supply centers into 40- to 60-foot-long sections from smaller 16- to 20-foot sections. Stores with the revamped section have so far registered an 81% sales increase and a 47% higher unit movement, while the average sale has jumped 22% higher, Guarneri reported.
The larger pet accessory offering has transformed the section into "a destination for pet owners, drawing their attention to our stores and away from these other retailers," Guarneri said.
