BUFFALO, N.Y. -- Tops Friendly Markets here has signed a direct-purchasing agreement with Paramount Home Video, Hollywood, confirmed Jack Kanne, Paramount's executive vice president of sales and marketing.
Tops only offers sell-through videos but advertises them on a weekly basis in its circulars. A Tops official would not comment on the deal and Kanne would not reveal any specifics.
Although the 115-store subsidiary of Ahold USA, Atlanta, is Paramount's first direct account among supermarkets, Kanne said the deal does not reflect an overall strategy for the studio. "Tops was in a position operationally to be able to work with us on a direct relationship.
"There are always increased opportunities when dealing directly with a customer," he continued. "Retailers know their customer base better than anyone else and studios know their products better than anybody else. With that shared knowledge we can customize programs that best meet consumer buying patterns."
The only other studio with a significant direct selling program to supermarkets is Disney's video arm, Buena Vista Home Video, Burbank, Calif., said industry observers.
"All of the studios are looking at these direct relationships," said an executive with a supermarket video supplier who asked not to be identified. Other studios are expected to expand direct relationships, and Paramount, with no major sell-through hits scheduled for the fourth quarter, is under pressure to meet last year's numbers, the executive noted.
"Everybody is looking at supermarkets as a huge growth opportunity and trying to figure out how to get that business. By going direct, they feel like they are going to get more attention, more space and more product on the sales floor."
One prominent distribution executive contacted by SN questioned the soundness of such direct relationships.
"The studios sometimes collectively cut their own wrists as far as I'm concerned," said the executive.
"Disney kicked this off and now the other studios are thinking, 'Are they getting more shelf space by going direct? Maybe we better go direct too so we'll get the same amount of shelf space.' I think they are all nuts."
