ATLANTA -- Kroger Co., the leading supermarket chain here, took the high road on pricing the hot sell-through movie "Jurassic Park."
The Atlanta Kroger marketing area, which leads the local market in total grocery share and in supermarket video departments, advertised "Jurassic Park" at $17.99, well above MCA/ Universal Home Video's minimum advertised price of $14.95. Meanwhile, A&P was at $16.98 and Bi-Lo stores in the area were at $14.99, but other prominent chains, like Publix, Winn-Dixie, Cub, Food Lion and Ingles, didn't have the title at all as of street date and store employees did not know of any plans to carry it.
SN was in Atlanta checking stores on the Oct. 4 street date for "Jurassic Park" to see how the title was being priced and promoted in a highly competitive market.
However, in many parts of the country, including Atlanta, retailers put the title out for sale early, violating the gentleman's agreement between stores and studios. "Jurassic Park" has a suggested retail price of $24.98.
The "Jurassic" experience in Atlanta reflected two industry trends, according to industry observers. For one, supermarket chains can mark up a video title enough to make a decent profit, relying on impulse sales from their heavy traffic patterns. But it also showed that many retailers have a long way to go in accepting sell-through video -- even stores with rental departments stocking "Jurassic Park" did not carry it for sell-through. The retailers are comfortable with all-audience family and children's titles, but shy away from those like the PG-13 rated "Jurassic," the observers
"Jurassic Park" was handled differently by individual Kroger divisions, each of which runs distinctive video programs. For example, the Louisville division had priced the title at $14.95 and promoted it with an impressive full-page color ad in its circular. The Atlanta division's circular featured "Jurassic Park" in a comparatively small black-and-white strip on the back page. Few of the Atlanta stores visited by SN went any further merchandising the title than a shipper and some dinosaur decorations. Some smaller stores didn't have the title by Oct. 5. But one Kroger store in the Louisville division that SN visited in New Albany, Ind., on Oct. 2, two days before street date, featured elaborate "Jurassic Park" displays, even though the product was not out for sale. In a promotional area outside the video department, the store had a 10-foot high wooden "Jurassic Park" dinosaur cutout, with a sign touting the title's availability on Oct. 4. Two-foot inflatable dinosaurs and the distinctive triangular "Jurassic Park" signs hung from the ceiling. A 6-linear-foot area of the sell-through section stood empty, decorated with posters and other point-of-purchase materials, awaiting the movie's arrival.
"The supermarkets in our area have the opportunity to be more aggressive in promoting sell-through video," said Phillip Carroll, field sales representative in the Atlanta branch of Ingram Entertainment, La Vergne, Tenn. "Some cross promotions with rebate products, such as Jell-O for 'Jurassic Park,' require creative marketing to work effectively. "However, the studios are only beginning to take advantage of the tremendous potential of cross promotion within supermarkets here in the Atlanta market." Kroger is the dominant supermarket video player in the Atlanta area, added David Linder, field representative with the Ingram branch. "Other supermarkets will boost their traffic count by bringing A titles at a low price, trying to be competitive. But they will have the titles for a few weeks and then they will be out of the video market again," said Linder. Overall, electronics retailer Best Buy drove price competition on "Jurassic Park" here, much as it did in the rest of the country. Its $13.77 advertised price was well below the $14.95 minimum advertised and forced nearby competitors to cut their prices. Under most studios' minimum advertised pricing policies, retailers who advertise a video below MAP are not eligible for co-op funds on that ad. However, retailers can advertise at MAP or above and then price the video lower in stores. Some companies, like Best Buy, are willing to sacrifice the co-op funds for the impact of the market-leading prices. "The entry of Best Buy has caused a surge downward in local pricing," said Carroll of Ingram. "At $13.77, they are now the one to beat." One Best Buy store SN visited was in a highly developed, highly competitive shopping area on Pleasant Hill Road in Duluth, Ga., northeast of Atlanta in suburban Gwinnett County. Its extensive sell-through video department includes almost 9,000 units in more than 300 linear feet.
Within a mile of that store, Wal-Mart, Sam's and Kmart each had cut its prices on "Jurassic Park" from the $14 range to $13.76; Target went with $13.77. A Circuit City store a few miles away had cut its price to $13.77 from its advertised price of $14.95. None of the supermarkets in the vicinity, including a Kroger store, had "Jurassic Park" in stock. Of the entertainment specialty retailers in the area, Blockbuster Video was at $16.98, Suncoast Motion Picture Co. was at $16.99, Tower Records was at $15.99 and Camelot Music was at $16.99. Among other retailers, Toys 'R' Us and Revco had the title priced at $14.99, Drug Emporium was at $15.99 and Sears, at $18.99, had the highest price observed in the market. Elsewhere in the area, a Super Kmart Center in Gainesville, Ga., had "Jurassic Park" at $14.88, a price lower than the $14.95 advertised nationally by the chain on Sunday, Oct. 9. A Wal-Mart Supercenter in the same town was at $14.95, the price advertised by Wal-Mart. Among specialty stores, Fox Video in Oakbrook, Ga., had "Jurassic Park" at $17.95, Movie Stop in Atlanta priced it at $17.95 and a Video Wonderland store in Norcross, Ga., offered the title for $16.99 with a free rental. Another sell-through title heavily promoted at about the same time as "Jurassic Park" was "The Nightmare Before Christmas," a Tim Burton film on Disney's Touchstone label. The title streeted on Friday, Sept. 30, with a suggested retail price of $19.99. But the title was not well represented in Atlanta area supermarkets. Kroger had "Nightmare" priced at $16.99, while the other supermarkets checked by SN did not carry it at all. Among other classes of trade, the Best Buy on Pleasant Hill Road had "Nightmare" for $11.98, with the nearby Wal-Mart dropping to $11.45 from the $12.75 price seen in other stores. Sam's was at $12.11, lower than the $12.39 price in a Sam's store in another town. Kmart was at $12.75.