PHILADELPHIA -- Supermarket chains in this metropolitan area appear undaunted when it comes to merchandising highly competitive appliance, household and pet supply categories.
"The extensive housewares found at Bed, Bath and Beyond, and Gourmet Garage all impact the housewares market big-time, but supermarkets have the foot traffic," said a food broker who asked to remain anonymous.
"Major supermarkets are trying for additional general merchandise business these days," he added.
Changes in the Philadelphia retail market in the last two years may have opened new opportunities for supermarkets in housewares, some executives interviewed by SN pointed out.
The long-standing department stores -- John Wanamaker and Strawbridge & Clothier -- each with fairly extensive housewares departments, were acquired by May Department Stores Co. Several regional discount store chains have either closed most units or left town. These moves may have helped supermarkets, sources said.
"This opened new impulse housewares opportunities," said Joe Gilchrist, president Gilchrist Associates, supermarket consultant, Ivyland, Pa.
"Acme, for example, seems to be leading the pack in merchandising and cross promoting cookware, kitchen gadgets and tools, appliances and pet care," said Ross Stumpf, vice president for health and beauty care at REM Organization, Wayne, Pa.
Malvern, Pa.-based Acme Markets, a division of American Stores Co., Salt Lake City, devotes dedicated space to general merchandise in its larger 65,000-square-foot food and drug combination units.
The Florence, N.J.-based Super Fresh Markets Philadelphia division of A&P, Montvale, N.J., and Wakefern Food Corp., Elizabeth, N.J., the wholesale buying division of the ShopRite retailer cooperative, seem to be giving more attention to general merchandise, said area food brokers.
Both Pathmark Supermarkets, Woodbridge, N.J. and ShopRite retailers are giving general merchandise full-page ad treatment in weekly roto supplements and store circulars, which they combine with heavy-hitting prices. While some ShopRite operators assign limited display space to general merchandise, others confer first-class citizenship to the category, said George Zallie, chief executive officer, Zallie Supermarkets, a six unit ShopRite retailer in Clementon, N.J.
"Placing appliances, for example, in many areas will increase our nonfood business," he said.
The continuing expansion by Wal-Mart and specialty housewares chains, and a more aggressive Kmart also give retailers a reason to focus more closely on general merchandise, said retailers and food brokers.
SN visited Kmart and Wal-Mart to compare what supermarkets are up against in nonfood from the mass merchandisers. The following is a miniview of how the two chains present some general merchandise categories in comparison to the supermarkets.
A Kmart unit in Marlton, N.J. devotes 15 feet to batteries, including four feet to rechargeables. This is considerably more space than the two to four feet of space devoted to the overall battery category by some Philadelphia supermarket chains.
Food storage comprised 20 feet on seven-shelf tiers. Cookware, including Visions, Revere, Mirro, Wear-Ever and other brands is merchandised on several 24-foot aisle runs, with many selections pegged on a white board background.
A Wear-Ever glass-covered 10-inch fryer was marked down to $10 from the regular retail of $18.99. A Mirro 10-inch saute pan was slashed from $8.99 to $5. An 11-piece cookware set, regularly priced at $30, was reduced to $25. Other selections carried $12.99 to $29.99 retails.
Ekco and foil bakeware were merchandised in 18 feet of space, which is less of a variety than found at the supermarkets.
However, the kitchen appliance assortment was very wide, with as many as 20 different toasters priced from $8 for a two slice Proctor-Silex to $29.99 for a Black & Decker wide-slot toaster.
Another 24-foot aisle had about 35 coffee makers, including a West Bend, $20.99; a Betty Crocker four cup, $10; Mrs. Tea, $49.99, and several Mr.Coffee coffee makers priced from $17.99 to $39.99.
At a Wal-Mart unit, also located in Marlton, N.J., appliances are displayed in many brands and types, with coffee makers and toasters arranged in a straight line on a shelf and boxed products stored on tiers below.
A 24-foot aisle housed many coffee makers, including a Mr. Coffee digital model priced at $29.96; West Bend from $14.96 to $24.96; Black & Decker $24.96 to $49.96; Proctor-Silex, $9.96 to $36.96; Presto stainless steel coffee maker, $38.96; Mr. Coffee espresso machine, $39.96; West Bend iced-tea maker, $17.84 and Mr. Coffee iced-tea maker, $19.96.
The appliance blend also contained 12 feet of toasters in 13 varieties. Similar space was devoted to 15 irons.
Items in the glassware section were priced from $1.67 to $7.97 for mugs, goblets, mixing bowls, pitchers and water bottles.
A set of eight, 16-ounce Coca Cola glasses was priced for $5.88, and a 16-piece set of Libbey Monterey glassware was ticketed at $14.97. Assorted Regal, Wear-Ever and Mirro cookware was priced from $4.88 to $17.47, with nonstick styles tagged up to $20.97. Nearby shelving held cast-iron pans at $5.77 to $15.87 and other cookware.
Other cookware sets were priced at $39.79 to up to $94.97 for Revere pot sets.
Ekco and other gadgets were merchandised on both sides of a 24-foot-long aisle, including cutting boards, Chicago knives and other small kitchen accessories.
In the face of this competition, SN found that Philadelphia supermarkets are attempting to raise general merchandise volume to higher levels through enhanced kitchen gadget displays, added shelf space for appliances, enlarged pet centers and housewares aisles with more striking backdrop colors and fixturing.
Super Fresh, Acme and ShopRite are using housewares sets with fixtures that stand out better, and have widened cross merchandising of kitchen and personal care appliances.
Major retailers also have installed large pet care centers to blunt the impact of the category killer pet retailers.
Acme and Pathmark officials declined comment for this story.
Here is how some Philadelphia supermarkets are attempting to make a stronger statement in general merchandise:
Acme Markets: Integrating GM With Grocery
At Acme units, it's not unusual to find kitchen domestics set next to canned tuna.
The chain boosts a wide variety of general merchandise that it has carefully integrated into the food aisles, especially at larger 65,000-square-foot stores. This has been done to garner higher impulse sales.
At an Acme food and drug combination store in Woodbury, N.J., Ekco kitchen gadgets were in an 8-foot set in the first aisle with condiments. Several items carried 30- to 40-cents off retail. These included a six-piece measuring spoon set priced at 99 cents, salad tongs at $1.69 and a pastry brush at $2.49.
The top tier shelf of a 4-foot display of drawer liners displayed kitchen counter-top appliances: Toastmaster food chopper, $13.99; Rival extra-wide-slot toaster and crock pot, each priced at $9.99; and a Proctor-Silex coffee maker, $16.99.
Another grocery aisle contained an 8-foot appliance department with about 65 stockkeeping units such as can openers in Toastmaster, Proctor-Silex, Sunbeam and Waring brands, tagged from $9.99 to $15.99. Also included were hand mixers from Rival and Mixmaster, priced from $9.99 to $17.99 and coffee grinders from Mr. Coffee and Toastmaster, $9.99 to $14.99.
Rounding out the inventory in this department were the following: food choppers from Black & Decker and Toastmaster, $29.99 and $20.99, respectively; irons from Sunbeam, Black & Decker, Proctor-Silex and Toastmaster $15.99 to $19.99; two and four slice toasters from Toastmaster, Rival, Proctor-Silex, $9.99 to $24.99; electric knives from Toastmaster and Rival, $10.99 and $11.99, respectively; Rival crock pots, $7.99 to $28.99; electric tea kettles and coffee makers from Presto and Mr. Coffee, $22.99 to $24.99.
The chain uses power-panel displays arranged at the back end of grocery aisles packed with assorted items that range from mugs, kitchen towels, cocktail stirrers to kitchen tools and gadgets, bagel slicers and alarm clocks.
A 4-foot Best Results kitchen gadget display promoted items at 50 cents to $1 off the $1.99 to $2.99 shelf prices.
A wide seasonal aisle placed near the middle of the store contained unsold Christmas toys, wicker gift baskets, snow shovels and ice-melting products. Some 50 dollar-day cardboard bins with clothes pins, auto brushes and other housewares were set up in the section as well as framed art, priced at $4.99, more appliances and videotape rewinders, $9.99.
According to a food broker, "the chain no longer runs as many 25%- to 50%-off general merchandise sales." Instead, the chain runs a steady diet of rather limited weekly specials that range from food-storage containers, film and batteries to stick goods, lightbulbs and disposable pocket cameras.
The broker explained that Acme limits the scope of its promotions to accommodate what is carried in its smaller-format stores. "This limits potential higher volume for its 45 larger combination locations," said the broker. He said of Acme's approximate 186 stores, 45 combination stores represent 70% of its Delaware Valley sales overall.
Acme continues to add locations to its expanding network of 65,000-square-foot combination outlets that circle the Delaware valley. The units provide ample space for a large selection of housewares.
The chain's expanded Pet World is anchored in the middle of the combination store. The retailer continues to roll out this freestanding 1,000 square-foot pet destination, as well as modified 40- to 50-foot in-line version in smaller units.
Since the departments made their debut over a year ago, the larger pet sections have generated healthy pet-accessory volume, lifting pet supply shelf turns, said the trade observer.
ShopRite: Merchandising High-Ticket Appliances Although the general merchandise varies among the ShopRite co-op members, the overall assortment at a 68,000-square-foot West Berlin, N.J.-store is overshadowed by a large contingent of popularly priced kitchen and personal care appliances.
Many appliances are cross merchandised at various areas in the store. This unit is one of six high-volume ShopRites operated by Zallie Supermarkets, Clementon, N.J. Cross promoting housewares, and especially higher-ticketed appliances, is a priority for George Zallie, chief executive officer.
"We want to expose as many customers, and in as many locations as possible, to drive appliance impulse sales."
For instance, a 4-foot set of personal care styling devices are merchandised at the back end of an aisle in the 5,000-square-foot HBC and pharmacy department. The mix contains hot-air hair brushes, curling irons and hair dryers in Vidal Sassoon, Conair and Revlon brands, all priced from $8.99 to $21.99.
On the top shelf of a 32-foot-long hosiery department against a perimeter wall in the department were additional Revlon Pro style 1600 hair dryers, $19.97.
Other appliances cross merchandised in the store included an 8-foot wide display rack near dairy. Here, an Emerson AM/FM portable cassette recorder was priced at $19.99; Proctor-Silex four-slice bagel toaster, $32.99; and can opener, $9.99; Hamilton Beach, can openers, $14.99 to $19.99; Daewoo two-head video cassette recorder, $129; Looney Tunes personal cassette player, $19.99 and a Looney Tunes alarm clock, $12.99.
Lamps priced at $29.99 and Igloo coolers at $7.99 were merchandised on the top shelf of the gondola with coffee filters.
On one of several grocery aisles in which nonfood is integrated, Zallie cross promotes coffee makers and tea kettles from Norelco, Mr. Coffee and Proctor-Silex, priced from $12.99 to $24.99.
The ShopRite retailer also has a dedicated housewares department with 12 feet of assorted Rubbermaid products; 20 feet of glassware and Pyrex, 12 feet of foil bakeware, kitchen tools, and an additional four feet of appliances.
In the soap and detergents aisle, there are 12 feet of stick goods, four feet of ironing boards and covers, six feet of vacuum cleaner bags, a 22-foot lighting center and a 4-foot hardware rack.
The 16-foot battery and film rack is located at the front of the pharmacy area.
A 300-square-foot seasonal aisle was set next to the HBC department and stocked with remainder boxed Christmas toys. Items included modeling clay, $4.99, a rock 'n' roll guitar, $9.99 and cut cases of windshield washer fluid and motor oil. A 6-foot high by 4-foot wide wooden hutch also displayed 22-ounce Canterbury candles for $11.98.
Super Fresh Markets: Giving Housewares an Upscale Touch
The Philadelphia Super Fresh division of A&P, continues to put a new face on its housewares and pet sections.
The division is expanding an enhanced presentation in its overall housewares. On one side of a 76- to 84-foot-long aisle, bakeware, gadgets and cookware are set on shelving and peghooks against a white pegboard backing with matching frame.
The new concept is rapidly being expanded "as we open new stores with the idea of making a stronger statement in housewares," said an A&P executive, who asked to remain anonymous.
"The goal is to capture more impulse dollar sales from customers as they enter your store."
Super Fresh also has started to cross merchandise gadgets in grocery areas. The 16-foot pegged gadgets section with products from A. Aronson were seen in the condiments aisle at the Marlton Crossing Shopping Center, one of two Super Fresh stores in Marlton. The gadgets were moved from the housewares aisle into the baking aisle this summer.
Two shelf tiers below this gadget section held small appliances, which included irons, food choppers, toasters, can openers, and cordless mixers from Proctor-Silex, Black & Decker, Hamilton Beach and Rival. The items ranged in price from $11.99 for a Rival crock pot to $34.99 for a Black & Decker cordless hand mixer with beaters.
That aisle also contained four feet of various glassware, including a set of three, 17-ounce drinking glasses, priced at $1. Glass bowls were $1.49 to $4.55; dinner plates, $1.89; glass mugs, $1.89; juice jars, $3.99; Coca-Cola or Diet Coke glasses retailed at $1.69, and Pepsi glasses for 99 cents.
The 40-foot-long housewares run was across from a wide selection of bakeware, food-storage containers and another four feet of appliances.
Super Fresh devoted its front, right seasonal alcove to a dollar-day promotion using cut cardboard shipper cases stacked on several gondolas.
Items in the seasonal section included: a package of six Farberware steak knives, $5; a package of three Farberware knives, $4; mousetraps, $1; a package of five Bic lighters, $3; candles, three for $1; three all-purpose cloths, $3; manual can opener, $4; bottle openers, $1; kitchen wisks, $1; three-piece wooden spoon set, two for $3; and small decorative bowls, two for $5.
Plans call for rolling out the chain's 120-foot-long Pet Shop destination departments beyond the four it now has in the Philadelphia marketing area, according to the A&P executive.
The high level of pet ownership across the nation has propelled pet supplies into a burgeoning category for supermarkets, with more products to offer, added the executive.
Super Fresh, which prices its pet products against the large superstores, has designated the larger pet areas for five more stores this year.
Pathmark: Pushes Sales With Rubbermaid Promotion
Pathmark tends to segregate general merchandise to one side of the store. At a Philadelphia store SN visited, batteries and film were among the first categories merchandised in the nonfood area.
These two, 8-foot-wide categories were displayed on spinner racks and tower display units and on pegged racking in the video rental section. Customer traffic, in fact, flows through the video department to reach other general merchandise and HBC aisles.
Earlier this month, Pathmark ran a large Rubbermaid food-storage container in-and-out promotion. Twelve slant-back shippers were set up in a 400-square-foot alcove inside the front entrance.
Pathmark played up the promotion in its weekly color roto supplement, offering savings of up to 50% off regular pricing.
Additional product was set up at the regular 12-foot-long Rubbermaid in-line section in a housewares aisle.
The chain also billed other Rubbermaid items in ads as "hot buys from Rubbermaid," which included trash cans, tote chests, soft-sided coolers, sport bottles and recipe card boxes.
The Pathmark store SN saw had a 36-foot-wide school and home-office department and an 8-foot framed-art section in the same aisle with greeting cards. Kitchen and oven mitts also were displayed at the aisle's endcap.
Another nonfood aisle carried a 16-foot stick goods set, eight feet of rubber gloves and replacement vacuum bags, a 24-foot reading rack and a 36-foot run of Rubbermaid and kitchen accessories on the facing gondola.
Bakeware, gadgets and cookware were displayed in 40 feet of gondola space.
Exposing Film Prices
Not surprisingly, the mass merchandisers were the most-competitively priced in film among two top-selling brands. Wal-Mart's everyday shelf price of $2.96 for a 24-exposure roll of 100-speed Kodak color film beat out Pathmark, priced at $4.59. This is a difference of $1.63. Both Pathmark and ShopRite had aggressive retails on their store-brand film while the mass merchandisers had limited selection in private-label film.