BOXBOROUGH, Mass. -- Demoulas & Market Basket, Tewksbury, Mass., completed all seasonal buying for spring/summer with the help of its individual store managers at a merchandising show held here, Dec. 3 to 5.
The chain has moved to a decentralized approach in its buying for seasonal by having its store managers attend three shows a year hosted by its distributor, Imperial Distributors, Auburn, Mass. At the show at the Boxborough Woods Holiday Inn, managers placed merchandise orders for their individual stores for the April- through-July selling period. Prior to this new policy, the responsibility for selecting and buying seasonal merchandise for all 57 units within the chain fell to one headquarters buyer.
"It's important for our store managers to have input in seasonal. It's a form of micromarketing. Items merchandised in rural areas, for example, are different than stores in suburban locations. Our store managers now feel they have a stake in the items they are listing," said Steve Hamilton, Demoulas' buyer of general merchandise and video. Demoulas, which helped initiate this program with Imperial a year ago, has found its seasonal orders are up. An initial test showed the store managers ordered 20% more than the headquarters buyer did for one seasonal period.
Hamilton declined to give a dollar amount for orders being placed at the show, or to say what Demoulas' seasonal business represents in terms of annual sales or percentage of the chain's business.
However, according to Michael Sleeper, Imperial's president, the spring/summer show alone contributes $2 million in sales to Imperial's total $15 million in seasonal sales.
"There is no question that the overall ordering is higher," said Hamilton. "The store managers are less cautious and more aggressive. They are looking at new items and those that can expand their product offering. These are items they feel have future sales in their stores," he said, adding that the chain has yet to get stuck with merchandise that didn't move because of poor judgment.
Hamilton's responsibility is to prescreen the offerings being presented at the seasonal shows and determine price points. Only selected items of the 350 general merchandise items, many displayed on in-and-out shippers, and 40 clip-strip displays, were marked with Market Basket tags. Managers could only order products tagged as Market Basket items.
"Store managers are involved in determining if products are right for their stores. They determine what the quantities should be. They can think through where to place these offerings in their stores. They also have the advantage of using fact-based information to compare how they did against last year," said Sleeper.
The items included in the show were categorized into: spring cleaning, pet, patio, suntan, automotive, picnic, summer toys, Rubbermaid, barbecue, lawn and garden, and film. The percentage of retail profit on these items ranged from mid-30% to mid-40%, according to Imperial's order form. Suggested retail prices on this assortment ranged from 79-cent corn skewers to $11.99 bird feeders, a new item at the show.
"Through this process we've shifted ownership to the store managers," commented Donald Polsi, Imperial's vice president and marketing manager of general merchandise. "The biggest complaint from the buyers was that they couldn't visualize products and see displays. It's very different presenting from behind a desk. Now the grocery store managers can touch and feel the products," he added.
Steve Theori, assistant manager for a Market Basket unit in Londonderry, N.H., said the show has been a good move. "It gives us the opportunity to see the products for our type of clientele."
"We know what clientele may want to buy. If you're in an ethnic area, $10 outdoor flags aren't necessarily going to fly," said Tom Trainer, Demoulas' store manager in Tewksbury.
During the three-day event over 300 nonfood buyers, mostly from grocery accounts, were scheduled to attend the show. Other Imperial Massachusetts-based customers buying seasonal on a similar basis to Demoulas are Roche Bros. Supermarkets in Wellesley Hills and Victory Supermarkets in Leominster.
"I can't say whether this is a major departure from what other retailers are doing, but Demoulas has been very effective in empowering their store managers in this process," said Sleeper.
Commenting on this buying practice, Jerry Barnes, vice president of member affairs and education for the General Merchandise Distributors Council, Colorado Springs, Colo., who was formerly with Carr Gottstein Foods, Anchorage, Alaska, said it was what his former employer did in Alaska.
"It's a great practice. We had store managers and general managers primarily come in and order what already was selected. In every store and in every market it is a little different. Who else knows the market better than the store person. This gives them pride in authorship," Barnes said.
