With the Energy Passage Act approved last year, supermarkets expect sales of more expensive energy-efficient lighting products to turn a corner soon.
The new federal regulation mandated that inefficient incandescent bulbs be eliminated in favor of more energy-efficient lighting. To better educate consumers, manufacturers have to now emphasize the lumens per watt (the amount of light bulbs produce), as well as watts and life of the bulb on its packaging.
"What people don't realize is that energy bulbs are becoming the new regular bulbs. And while some may be unwilling to pay for an energy bulb,
under the Energy Policy Act the cheap bulbs will eventually disappear and shoppers just won't have a choice," said Kim Botkin, the nonfood director, Gerland's Food Fair, Houston. "Just as people have said bread used to be a nickel, they'll start saying they can remember when bulbs once were cheaper, too," he added.
But most retailers surveyed by SN say that shoppers been resisting the higher-priced bulbs in favor of standard soft-white bulbs, especially four-packs on sale.
Jeff Manning, vice president of general merchandise for Bashas' Markets, Chandler, Ariz., said that energy bulbs "are a turn off because shoppers aren't satisfied with the value relationship."
"Customers have responded slowly to energy bulbs," confirmed Dave Shepherd, nonfood buyer for the Fort Wayne, Ind.-based Scott's Food Stores division of Supervalu, Minneapolis. "[They're] priced around $3 to $5, compared with under $3 for regular bulbs. They last longer, but there's still resistance to these higher price points," he said.
GE Lighting, Cleveland, hopes to stimulate its energy-efficient lighting with several promotions next year. One will include a free flashlight, penlight and three-piece screwdriver set with the purchase of energy-efficient products.
In general, lightbulb sales remain healthy for grocery stores. For the 52 weeks ended June 22, food channel lightbulb sales increased 6.7% to $461.5 million, while unit sales increased 3.2% to 192.6 million from a year ago, according to Information Resources Inc., Chicago. While mass merchandisers kept pace with a sales increase of 6.9% to $478 million and a unit sales jump of 10.4% to 205 million in the period, the drug channel's lightbulb sales slipped. Sales declined 1.6% to $111.7 million with unit movement down 4.4% to 46.2 million.
Gerland's devotes under 10% of display space to its energy bulbs, which account for about 5% of its 12-foot lighting section's sales. The chain relies on price-point promotions featuring its most popular selling unit to increase volume.
"A four-pack of soft-white bulbs featured from 99 cents to $1.49 still is our best promotion," said Botkin.
Kim Schell, general merchandise buyer/merchandiser at Nash Finch Co., Minneapolis, views energy bulbs as a popular home center item. Although he sees shopper demand for energy bulbs building, Schell noted that the home centers advertise these items heavily.
In a bid to spark heavier lighting center traffic, Nash Finch retailers mount frequent bulb promotions to build awareness beyond four-pack specials, he said. Department margins overall run between 25% to 45%.
"We have something going at least once a month, from four-packs of long-life, efficient-type soft-white bulbs and floods, to appliance and decorator bulbs. Mixing up advertised features works better than constantly repeating the same product," Schell stressed.
During hot pricing promotions, Schell avoids running low-end bulbs, concentrating instead on name-brand, long-lasting 40-, 60-, 75- and 100-watt bulbs. "These are run either with a $1-off coupon, or at a reduced price of 99 cents to $1.49 compared with the regular everyday $1.99 to $2.49 range," he explained.
Price-point promotions also dictate lightbulb sales activity at the 12- to 16-foot lighting centers at Carr Gottstein Foods, Anchorage, Alaska, according to Gary Schloss, vice president of general merchandise.
"Lightbulbs are still loss leaders for grocery and hardware stores, and shoppers always look for the lowest possible price for a good bulb," added Schloss.
Energy-efficient bulbs sales are slow "because people still want a brighter light bulb. They'll kind of look at that and think 'energy efficient,' and then it doesn't burn as brightly as the other bulbs," said Schloss.
According to manufacturers, however, the newer technology in energy-efficient bulbs offer higher lumen output with longer life and use less wattage.
Energy-efficient selections make up about 10% of Carr's lighting section. New home construction in Carr's marketing areas include more baths with vanities that use globe lighting, which has spurred sales for these bulbs in the chain.
"We also do a big job with spot and flood lights in the winter, and margins are 5% to 10% better on energy efficient and specialty bulbs," said Schloss.
At Scott's Food Store, energy-efficient bulbs now account for around 10% of department sales, but sales are building, noted Shepherd.
"[Consumers] are definitely aware of energy-efficient bulbs I just don't think the price points are for them," he added.
Energy-efficient bulbs take up about 15% of shelf space in Scott's 8- to 12-foot lighting sections. "Four-packs of 40-, 65-, 75- and 100-watts of soft-white bulbs are still our best movers," he added.
Scott's everyday shelf price for a four-pack of soft-white bulbs is $1.99, dropping to two packs for $3 during promotions.
The retailer tries to stimulate department traffic every couple months and quarterly with an endcap sales event for energy-efficient bulbs and other selections.