The discounters and specialty stores have laid claim to lightbulbs as a loss-leader traffic builder.
These trade channels have become category dominant with their massive aisle space stocked with big variety. For the 52-week period ended March 1, 1998, mass merchandisers captured 47% of the $1 billion plus category, and 49% of the unit volume. This was closely followed by food stores with a 43% share of dollar volume and 41% share of unit volume. Drug stores took just 10% of both dollar and unit category volume among the mass-market retailers.
"They seem to keep chipping away at supermarket lightbulb sales," said Gurnam Khaira, a general-merchandise buyer at the wholesaler, Nash Finch Co., Minneapolis.
Mass merchandisers price their bulb leaders "as a traffic-building football the way supermarkets use ice cream and Coca-Cola," explained Dean Owens, director of general merchandise at Minyard Food Stores, Coppell, Texas.
As mass merchandisers gear up for fall sales with window banners, aggressive ads and temporary price reductions, what stance can supermarkets take on this commodity category?
Most supermarket chains and wholesalers surveyed by SN will not sit idly during the upcoming seasonal push.
Gerland's Food Fair, Houston, may repeat a 60-cent to $1 off in-ad coupon offered on a price-reduced four-pack of General Electric softwhite bulbs, which proved successful last year. "It was very effective. We'd like to repeat it this fall," said Alex von Sehrwald, the chain's nonfood director.
The promotion was supported with endcap pallet displays of bulbs. Although profits were slim, it gave the chain "a sales lift 15 to 20 times normal," said von Sehrwald.
Because the mass merchandisers use lightbulbs as traffic builders, supermarkets "to stay in the ballgame must absolutely do the same and promote the category as aggressively," he said.
Gerland's Parade controlled label 40-, 60-, 75- and 100-watt bulbs also will be featured in a temporary price reduction month-long fall promotion.
Nash Finch, which supplies some 400 supermarkets, has found off-shelf pallet displays, cardboard floor shippers and running a 55-cent-off coupon in newspaper ads on four-packs of Philips bulbs is effective in moving lightbulbs.
Taking temporary markdowns "on two to three selections in the regular lighting department, like decoratives, night lights and indoor and outdoor halogen floods, stirs interest in the whole category and helps to brings back some of this business from the mass merchandisers," said Khaira.
Genuardi's Family Markets, Norristown, Pa., will assign hot price points on 60-, 75- and 100-watt bulbs this fall. It will follow up a few weeks later with price reductions on ancillary night lights and decorative lighting assortments, said nonfood director John Stahl.
"Percent-off sales on grocery endcap pallet displays of GE four-pack softwhites and three-way bulbs have worked well for us," Stahl remarked. The chain plays up its specials in weekly ads and circulars. Lightbulbs are supplied through Fleming Cos.' general-merchandise warehouse, King of Prussia, Pa.
Considerably more space is being devoted to lighting in Genuardi's newer stores. A 20-foot department was installed at the Marlton, N.J., unit that opened in July. Most of Genuardi's lighting sections run 8 to 12 feet.
"The mass merchandisers have the space to make themselves more of a destination, with up to 60 feet of well-rounded bulb variety in a solid presentation," Stahl said. However, he believes supermarkets with 20 feet of lighting "can make a pretty good statement."
In Stahl's mind, wider product variety is key to increased lighting sales. This is simply because "there are many sockets in homes today, especially newer homes with upgraded fixtures. Our stores seem to get a lot of shoppers with more lighting needs than people living in older neighborhoods."
He said larger lightbulb departments give the retailer an opportunity to cater to a bigger lighting market. "If we can sell those [wider varieties], even at a reduced margin than what we were used to getting years ago [when food-channel lightbulb margins ran higher], then we're still going to have a pretty nice margin item," the retailer stressed.
Minyard uses price promotions generally built around two shrink-wrapped four-packs of Sylvania softwhite bulbs. In October, the chain will run a price promotion on 40-, 60-, 75- and 100-watt bulbs, according to Owens. Minyard also relies on off-shelf shipper displays in lobbies and endcap positioning of bulbs for increasing bulb-aisle traffic.
"We try to price our bulb promotions to compete with the home centers and mass merchandisers. Sometimes we'll cut margins or use accrual funds," Owens explained. Minyard's lighting departments range from 8 to 20 feet long. Newer stores devote 16 to 20 feet.
Full pallet displays of national and private-label 60-, 75- and 100-watt bulbs will help garner fall lighting business for Hy-Vee, West Des Moines, Iowa, said John Susich, vice president of general merchandise.
"In the past, bulbs were a profit item, but to be competitive today you've got to be right down there with huge displays and promote," said Susich.
For fall and winter especially, large displays are essential for supermarkets trying to reach shoppers with lighting on their minds because mass merchants and home-improvement centers feature bulbs for building traffic, he said.
Hy-Vee's lightbulb displays and promotion programs "are showing more decorative and specialty items," Susich said. The category has become so competitive that retailers intent on growing department sales should consider being close to mass-merchandiser pricing, he added.