BEDFORD HEIGHTS, Ohio -- Riser Foods here has opened a new 5,000-tape Movie Market video department in a store it bought from Fred W. Albrecht Grocery Co., Akron, Ohio, last year. The video store-within-a-store opened last month with heavy promotional activity focusing on the department's lower prices compared with other stores, and on the 100 copies of "True Lies" brought in from pay-per-transaction supplier Rentrak, Portland, Ore. The department is operated on a leased-space basis by Supermarket Video Inc., Encino, Calif. SVI runs three other rental departments for Riser and three similar departments in stores of Ralphs Grocery Co., Compton, Calif.
"Video is a big plus in our stores," said James Fiedler, Riser's director of general merchandise. The grand opening of the supermarket, which now operates under the Rini-Rego banner, and of the 900-square-foot department, is slated for mid-February. "We are committed to the concept of a full-service leased video department operation," said Steve Berns, president and chief executive officer of SVI. "This section satisfies the supermarket's one-stop-shopping strategy and our desire to offer a complete video entertainment center within the confines of the supermarket."
The live inventory department is located in front of the checkouts in the store, along a row of other services including large floral and greeting cards areas. The section had about 4,200 pieces of rental inventory -- 2,500 of it in new releases -- 200 units of rental games, 450 previously viewed tapes and 600 new sell-through videocassettes.
Depth of copy on new releases was heavy, with 25 copies of "I Love Trouble," 25 copies of "Clear and Present Danger," 45 copies of sell-through priced "The Mask" and 100 copies of "True Lies," a FoxVideo title known to be distributed
by Rentrak. SVI is a Rentrak customer. SVI's parent company, Culture Convenience Club, Tokyo, the leading video retailer in Japan, has a financial interest in Rentrak. With shared-revenue, pay-per-transaction programs like Rentrak, retailers can obtain tapes for $8 to $12, but then share half the revenue with the supplier. Transactions are tracked electronically. SVI built a major promotion around "True Lies" in all its Riser and Ralphs departments, said Berns. Availability was guaranteed with an offer of a free rental if it wasn't in stock. "We brought in more copies of 'True Lies' than any rental title by any other supplier to date and we've seen a tremendous positive response in all our stores, including the promotion that we are doing at the South Euclid store," said Berns. "This is one further positive example of the benefits of Rentrak in supermarket video departments." Rental rates in the department are $2.49 a night for new releases, $1.99 for a five-day rental of catalog titles and $1.49 for a five-day rental of children's tapes. A promotional flier compared this pricing to two video specialty retailers in the area, Mom's Mega Video and Blockbuster Video. The flier demonstrated that the Movie Market pricing was lower, saying that it was "more convenient," "less costly," with "more copies of the hits." The SVI departments were also promoting preorders of "The Lion King." An in-store flier priced the upcoming Disney hit at $16.99, marked down from the suggested retail price of $26.99, and pointed out that with the two $5 mail-in rebates, net cost to consumers could be $6.99. Sell-through prices in the South Euclid department at the time of an SN store visit in early February were $14.88 for "The Mask," $16.99 for "Land Before Time II," $19.99 for "Snow White and the Seven Dwarfs," $16.99 for "Jurassic Park," $16.99 for "Speed," $9.99 for tapes in the "Timmy the Tooth" series, $12.99 for many Barney tapes, $18.99 for "Black Beauty" and $16.99 for "A Troll in Central Park." Riser is giving some thought to sell-through-only departments, as well as to putting in video rental departments that it would own and operate, said Fiedler. "I would prefer a whole video department that is strictly sell-through and not even get involved in rental. It seems that sell-through products would be much more productive than rental at this point," he said. The retailer has been doing well with low-priced computer software in four of its stores, he noted. The software is obtained from a magazine distributor and from a local rack jobber. The software is located in a large magazine and book area of one store, and in front on spinner racks in the three others, he said. "As computers become more popular, people are looking for entertainment software that is lower-priced," said Fiedler. Most of the software Riser carries are game and entertainment titles, he said. Riser opened its first SVI department at the beginning of 1993 and opened two more later that year. One more department was opened in 1994 and one closed when the company shuttered its Jax discount store operation last year. Ralphs opened three SVI departments during 1993 under the name Videos & More. All the SVI departments have about the same amount of inventory and occupy spaces ranging from 800 square feet to 1,200 square feet. SVI's parent, Culture Convenience Club, has close to 700 stores and many leased departments in Japan. It is the world's second-largest video retailer, next to Blockbuster.