INDIANAPOLIS -- Blockbuster Entertainment, Fort Lauderdale, Fla., has sold a video rental department racking operation that serves 56 Winn-Dixie stores. Major Video Concepts, a leading video distributor here, has bought the operation.
The change, which took place at the end of June, could result in a wider expansion of Winn-Dixie's video rental program, industry observers noted. Winn-Dixie, based in Jacksonville, Fla., has more than 1,100 stores, and a limited number of them have video departments. Major is now Winn-Dixie's biggest video supplier. "We're highly committed to the supermarket segment of the industry," said Walt Wiseman, Major's president. Major is the third largest video distributor in the country, after Ingram Entertainment, La Vergne, Tenn., and ETD Entertainment Merchandising, Houston. "In the long run, supermarkets are going to be one of the survivors in the video business primarily because of the convenience factor," Wiseman said. "Supermarket volume will be less affected by video-on-demand or other new technologies than regular video stores because people will still go to the grocery store to pick up milk and bread."
Video rental departments are in three of Winn-Dixie's 12 operating divisions: Fort Worth, New Orleans and Tampa. They range in size from 300 to 5,000 tapes, with an average of 1,300 per store.
"Our plan is to fully develop the three districts that we are in, and then hopefully we will get in and do some of the other districts for Winn-Dixie," said Wiseman.
Blockbuster had acquired Winn-Dixie's racker, Automated Video, Richardson, Texas, when it bought SuperClub, a Dallas-based video company, late in 1993. Playback International, a used-tape broker in Richardson, and Best Video, a video distributor in
Dallas, also were part of the deal, but Blockbuster's main interest was SuperClub's 160 video and 270 music specialty stores. Earlier this year, Best was sold to ETD Entertainment Merchandising, Houston, which is Blockbuster's primary video distributor, and Playback has been sold to Major along with Automated Video.
"We got rid of them because they don't fit into the mainstream of our business," said Wally Knief, spokesperson for Blockbuster.
Winn-Dixie executives in the three divisions either could not be reached or would not comment. Supermarkets now represent about a quarter of Major's business, Wiseman said. Among the supermarket chains it services are Carr Gottstein, Smith's, Marsh, Farm Fresh and Meijer. Major racks shared-revenue rental departments in about 85 stores, Wiseman said. These include several independent supermarkets in the upper Midwest that the company already was servicing, 14 video departments of Minyard Food Stores, Coppell, Texas, and other independents that had been serviced by Automated Video. When retailers buy the tapes from a distributor like Major, they own and operate the entire department, and keep all the profits. But in shared-revenue departments, the racker provides the product while the supermarket provides the space and personnel. Major has the financial clout to serve the Winn-Dixie departments better than most other shared-revenue rackers, Wiseman said.
"We have no difficulty in putting up the necessary capital to support those operations. We have direct access to all the product, and we are developing our third generation of point-of-sale systems to use in those revenue-sharing operations," he said. The POS system will identify product trends for specific neighborhoods and will help Major make better buying decisions for individual stores, he said.
Major also will upgrade stores' merchandising, marketing, promotions and new release depth of copy, said Hal Heyer, regional director for Major in the south. "They will see a lot more specials and advertising. We try to do some major promotions at least once a quarter," said Heyer, who had been Automated Video's general manager. "There will be more product rotation throughout the stores to generate new looks for the departments. We are getting into feature packs," he said.