Jim Key, director of general merchandise and health and beauty care at Acme Markets of Virginia, North Tazewell, Va., said he would re-evaluate the back-to-school mix to include computer-related supplies next season.
Key is not alone as demand for home-office supplies continues to surge ahead, with supermarket operators asking themselves how they can compete with the office superstores and discounters that capture a majority of sales.
"As education changes and as the demands on schools shift to more computer-driven programs, we'll have to look at our mix in school supplies to better accommodate what the students need," said Key.
Jack Mahan, head general-merchandise buyer at Supervalu's Desloge Division, Desloge, Mo., agreed. "Computer accessories may play a larger role in back-to- school promotions over the next few years, especially as computers continue to gain importance in schools and home," he said.
"Our research shows the computer in the home has become a 'consumer' of office supplies. It is increasing consumption at the home level, in addition to the regular inventory that the household would have in office supplies," said Steve Jacober, president of the School, Home and Office Products Association, Dayton, Ohio. Research conducted by Chicago-based Leo J. Shapiro & Associates for this year's SHOPA-sponsored Learning Curve Conference showed a correlation between the penetration of home computers and the number of shopping trips made by consumers for school and office supplies. Those who didn't own a computer made six trips to the store and averaged $13 per trip compared with those who owned two or more computers, who made nine trips and spent $30 per trip over the course of a year.
According to a survey, released earlier this year by New York-based Arbitron News, personal-computer ownership is way up. Home penetration has gone from 29% in 1995 to 54% this year. Much of that growth is coming from first-time buyers, the survey indicated. It also noted the number of PC owners who subscribe to Internet services increased four-fold during the same period. This group represents 38% of all U.S. consumers.
Meanwhile, PC retail sales increased a healthy 14.5% from $46.9 billion in 1997 to $53.7 billion in 1998, according to figures reported by Home Furnishings News, a Fairchild Publications newspaper that covers the home products industry.
Sinking price points are fueling the growth of PCs in terms of unit sales, with the so-called sub-$1,000 category one of the most vibrant, said HFN.
Also helping to drive home-office supply sales are the number of professionals and others working from home, including more women. The distinction between home and work has become increasingly blurred, according to a report on the home-office market produced by Yankelovich Partners, Norwalk, Conn. Besides greater PC ownership, other factors fostering this trend are the "cocooning" phenomenon, a desire to spend more time at home, and technological advances in electronic and digital communications, making telecommuting possible.
As Jacober states, "There is more consumption of traditional office supplies, whether paper-based or desk accessories." Supermarket retailers like Jim Key have come to realize the potential exists to capitalize on the developing home-office market in spite of the dominance of superstores and mass merchandisers. The Yankelovich study shows food and drug chains average about 5% of the consumer purchases made on disposable office supplies.
"Whatever space supermarkets can devote to home office can be beneficial due to their traffic," added Jacober. "They will not offer the selection that a category-dominant retailer would. But that certainly doesn't mean they cannot compete. There are basic items as well as unique niche items that they can do very well with," he noted.