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FUTURE WORRIES

Video has always been a natural but uneasy fit in supermarkets.ws and the excitement it brings, but when push comes to shove, they tend to be more comfortable with traditional food categories.Lately there's been more pushing than in the past as questions have been raised about the long-term viability of video rentals. The result is an increase in concern by video executives about management support

Video has always been a natural but uneasy fit in supermarkets.

ws and the excitement it brings, but when push comes to shove, they tend to be more comfortable with traditional food categories.

Lately there's been more pushing than in the past as questions have been raised about the long-term viability of video rentals. The result is an increase in concern by video executives about management support for the category.

"In my operation, upper management support is great, but store management support varies wildly," said Randy Weddington, video specialist at Harps Food Stores, Springdale, Ark.

When the national media run negative stories about video, like one about Blockbuster in a recent issue of Forbes, video executives have to reassure management that the category still has a strong future.

"You have to re-educate them and you have to show them the other side of the story," said Clifford Feiock, video coordinator at Nash Finch Co., Minneapolis. "The Forbes article represented a view that is pretty distorted and you have to give them a more realistic view to make judgments from."

But all this concern about video's future comes at a time when some retailers are expanding into the business. "The competition -- the Wal-Mart Supercenters, Longs Drug Stores and others who have not been renting videos -- is bringing in video to build up their business," said Rick Ang, buyer at Video Mart, Sacramento, Calif., which racks video departments in 17 Bel Air Markets in the Sacramento area.

Here is what the roundtable participants said about management support for video:

SN: Our retailer survey this year revealed an uptick in concern about upper-management support for video -- and that survey was taken before the news about Stop & Shop and Dominick's getting out of the rental business was reported. How do you see this commitment within your organization?

WEDDINGTON: In my operation, upper-management support is great, but store management support varies wildly. Some managers are incredibly supportive of it and the others could care less. It's hard to turn them around. SN: Why is that some at store level care less?

WEDDINGTON: Part of it was because of the soft rental year we had in 1995. That has disillusioned some of them. I don't think some were ever enthusiastic in the first place. For others, it's personality conflicts. Every situation is different.

SN: Can upper management help give video a push in those situations?

FEIOCK: With Nash Finch, our situation is a lot like other wholesalers. Right now our main emphasis is on updating technology in our operation. We're spending a great deal of money and time, and our focus is really on furthering our company rather than furthering video. That's not to say that video is less important, but it's a side issue right now.

The technology updates should be positive for video as it makes point-of-sale information more available direct from the store. We don't have that information now and the other supermarkets do. Video is still recognized as a solid contributor to the overall bottom line profits of our company. When compared to other departments on a contribution per square foot basis, video still ranks right up among the leaders.

SN: Does upper management see video as a profit center or a traffic draw?

HEMBREE: We look to video for profit. A consumer draw is one thing, but you have to make money. We have a dedication in our upper management to video. But if it ever starts losing, then you're going to see that drift a little bit and we will look at the possibility of a bank or a pharmacy or whatever. And then, we all agree that we need to be in video, but we're not sure what form it will take five to 10 years from now.

At store level, it's just like any other department. When a store manager doesn't understand something he tends to shy away from it and that holds true for the meat department or the bakery or whatever. Our company has only been in video for four years and many of our managers haven't had any experience with it. It reminds me a lot of our floral departments about 10 years ago. We had floral departments, but we really didn't dedicate ourselves to them, so in turn, they were just fair. SN: Does your company see video as a big growth factor?

FEIOCK: I think you'd be foolish to say there's a big growth factor there any longer, at least not in the present rental format. What I hope everybody is looking at is, the market is changing and there are a lot of new opportunities coming down the road that we can evolve our present stores into. They are very adaptable. So there are growth opportunities coming. They are not here now, but something will be just around the corner.

SN: Jeff, Copps has been in video the longest of the group. How is your management support?

OLSON: I agree with some of what they said here. Support from upper management is real good in our company. Store manager support is pretty strong, but video is a different type of animal in the grocery store. It's not the same as selling peas, meats or bakery products. It needs to be looked at differently. It's an entertainment section. So it needs to be handled in a different way.

When it comes to video, some encouragement and passing along of information to store managers is more important than it is in some other areas because it's so different. SN: What effect do negative articles in national business publications, like the one Forbes ran recently about Blockbuster's future, have on upper management? When those stories hit, do you have to reassure top management that video is going to stick around?

FEIOCK: Very definitely, I do. You have to re-educate them and you have to show them the other side of the story. The Forbes article represented a view that is pretty distorted and you have to give them a more realistic view to make judgments from.

ANG: I agree. Our upper management tends to get involved in that kind of headline panic. They take the view that they want to stay ahead of the trends. In our situation, I think we've been in it for so long -- video has been on autopilot -- that upper management tends to more or less forget about it and the reason why they put it in.

SN: How does video rental compare as a profit contributor? ANG: It's a good profit contributor. The percentages may not be there compared to other products in the store. Video, in our situation, comes in about 25% to 30%, which isn't terrible, but it's a little bit less than some other nonfood areas. It can drop off the more you coupon it and draw away from it.