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FLORAL'S ROI HAS YET TO BLOOM, SAY RETAILERS

CHARLOTTE, N.C. (FNS) -- A panel of retailers called for floral to become a separate department with specific goals and budgets meant to maximize sales, turns and profits -- while operating within the produce structure and addressing store and overall corporate goals.Speaking at the general session breakfast at the Super Floral Show here, the three panelists conceded that floral's continued domination

CHARLOTTE, N.C. (FNS) -- A panel of retailers called for floral to become a separate department with specific goals and budgets meant to maximize sales, turns and profits -- while operating within the produce structure and addressing store and overall corporate goals.

Speaking at the general session breakfast at the Super Floral Show here, the three panelists conceded that floral's continued domination by the produce department means floral remains "a second-class citizen" among departments in supermarkets.

"Floral and produce can each learn from the other. Both are fresh items requiring quick turns and rotation, so they should be able to help each other achieve multiple sales through tie-ins and cross merchandising," said Keith Horder, consultant and former Safeway group produce director.

Still, "there are definitely opportunities for floral outside the produce department today." Bruce Peterson, senior vice president and general merchandise manager, perishable food team, Wal-Mart Stores, Bentonville, Ark., noted that while floral is a small part of today's total supermarket business, it can become a marketable, significant point in the overall image of the supermarket. At Wal-Mart, surveys show that today's consumers make purchases based on value, health and wellness, and indulgence factors.

"How we make floral [the consumer's] choice for some of these discretionary dollars is the real challenge," he said.

Steve Junqueiro, recently promoted to vice president of operations for Save Mart Supermarkets, Modesto, Calif., said his company believes in-house education helps to build staff commitment to the category. Weekly conferences and monthly meetings are designed to keep floral's profile within produce high in the minds of corporate executives, he explained. Working closely with suppliers also helps.

"We rely on our suppliers in helping us find the right florals, recognizing trends, and creating selling methods that work for our customers," Junqueiro said. He also indicated Save Mart uses focus groups to get some direction, "but ultimately we learn what works by what sells in floral."

He stressed that Save Mart strives "to know what sells," adding floral performs well for the chain as a category. "What we always are asking ourselves is: What does floral do for us in total market share?"

The panelists agreed the future of floral's growth depends on closer working relationships among growers, suppliers and sellers to help consumers view floral as an important, ongoing element in their lives. Whether presented as a self-service or full-service unit, floral should be positioned as a signature consumable category that promotes floral buying as a natural, regular shopping routine for U.S. consumers as it has long been in Europe, the group said.

"In America, it is still considered only a special-occasion purchase where flowers are concerned, and we need to change that thinking," stated Peterson.

Junqueiro identified color identification and theme development as key factors for cross-merchandising success, noting that "category merchandising has now been translated to floral."

Peterson raised his concern that the 18 to 35 age group seems to know very little today about floral. That's a terrible void, since "they should be earmarked as our future floral buyers."

While baby boomers, Hispanics and others seem to get lots of information, he finds the younger buyers are being overlooked by the floral industry with the types of information, promotions and suggestions that zero in on what floral can bring to their everyday lives. Junqueiro agreed.

"Young people definitely want more information about everything. So better-trained in-store associates are a logical step in this direction," he said.

Horder received the biggest laugh of the session when he observed that all the plans won't do any good until upper-level management receives a more complete view of what is entailed in floral's return on investment.

"Floral education may need to get as basic as answering the serious question from produce and supermarket managers of why they can't sell floral cheaper once the blooms fall off."

Following the seminar, SN spoke with Peterson and Junqueiro about their views on the global impact of regulatory legislation that is already affecting furniture, apparel, toys, gifts and greeting cards, among other items.

The industry definitely needs to keep a close eye on global trade negotiations as they may affect the supermarket industry and certainly the floral industry, both told SN.

The retailers indicated they are frequently in Washington lobbying for the industry, especially on pre-notification rules of shipment arrivals. While no specific regulations involving floral are currently pending in Washington, both feel the produce and floral industries should be on the alert should some regulations on imports be introduced.

TAGS: Walmart