Albertsons' stores featuring Toys "R" Us "Toy Box" departments are enjoying merchandising success since the chainwide rollout began this past spring, said Tim Cogil, senior category manager, seasonal.
"The toy program is going very well. We have a terrific relationship with Toys 'R' Us, and we believe this will be a successful program going forward," he said. "To date, customers in the stores with the Toys 'R' Us [sections] have been delighted by the selection of toys that are available and the convenience of adding toys to their shopping baskets."
Toys "R" Us did not return calls to SN for comment.
The sections range from 40 to 96 linear feet, and carry 250 to 400 stockkeeping units, as previously reported by SN.
Toy sales offer significant revenue potential for supermarkets and drug stores, Cogil said. The retailer has enhanced its seasonal offerings by "pushing the envelope" on the traditional toy category and offering toy products year-round, he said.
"We are seeing that shoppers are purchasing toys throughout the year -- for birthdays, special occasions, baby showers, rewards [for] good school grades and for other special moments," Cogil said. "We believe many of these toy buyers would have been reluctant to make a special trip to a toy store for their purchases."
"Supermarkets are always looking at other outlets to compete against," said Chuck Cerankosky, analyst, McDonald & Co., Cleveland.
Chains like Albertsons that use an established brand for its toy section "gain credibility" going into the partnership, said Jonathan Ziegler, principal, PUPS Investment Management, Santa Barbara, Calif.
"Readily identifiable toy brands are a magnet for shoppers, but perhaps equally important are the convenience, selection and prices offered in the Toys 'R' Us category," noted Cogil.
As supermarkets break into the toy industry today, the category will evolve to become more competitive and serious, said Cogil. "I believe that our competitors will begin looking at the category more seriously, and really consider the options available in the toy category. Albertsons has been the leader in developing a successful model in the category, and it won't be long before that practice becomes more common throughout the industry."