Supermarkets are getting strong playback in profits through the incremental sales of blank video and audio tapes.
Special-event broadcasts such as the Winter Olympics, personal occasions such as birthdays and anniversaries, and major holidays all have boosted demand for blank videotapes.
"The category is a good one, and we seem to be selling more than we ever sold," said Norm Carpenter, director of general merchandise at Rosauers Supermarkets, Spokane, Wash.
Charles DeFiglio Jr., treasurer and chief executive officer at C&A Enterprises, Forked River, N.J., also confirmed tape sales were strong at his stores, despite the fact that the category was highly price-driven.
"The category is a good one, and consumers will pick up larger multipacks of three blank videotapes if it represents a significant
In both video and audio, consumer demand is moving toward quality as recordings are being made from increasingly sophisticated high-tech equipment. Ultimately, sales of blank tapes will be subject to advances in technology, said retailers polled by SN.
Monte Wood, general merchandise buyer at Nash Finch Co., Minneapolis, maintains that the category will remain viable "as long as the technology doesn't change. But because there really isn't a heck of a lot of money in standard videotape for manufacturers, there will be a technology change to disc or CD, or to the next generation of product."
Wood said margins on blank videotape regularly run around 20% to 25%, and when supported by a promotionally priced ad, margins come in at about 10%.
Retailers also said they are using a greater variety of tapes to satisfy consumers' interest in different quality grades.
Demand for a range of quality tapes has prompted Jitney Jungle Stores of America, Jackson, Miss., to create new 8-foot blank audio and videotape sections at its 100 stores.
The new section is being rolled out chainwide "as a destination department to generate impulse and planned purchases," said Al Booth, director of general merchandise and health and beauty care.
The new section is in place at 15 locations, with the balance of stores scheduled for an upgrade to the expanded mix during store remodels.
Blank videotape sales are generating strong impulse movement for the three-store DeFiglio's IGA.
The retailer constantly highlights blank videotape promotions on shippers in single and multipacks.
DeFiglio said he is careful to keep blank videotapes priced below the point where shopper resistance begins to build. One out of every four blank videotape promotions the retailer runs is a triple-pack.
"We keep single blank videotapes under a $3 retail, because if you go over that they don't sell, and if a three-pack goes over $9, forget it. We set up shippers at high traffic points around the store where space is available."
Ray's Sentry Markets, Brookings, Ore., is aggressively highlighting blank videotape sales and achieving solid shelf turns by merchandising at front endcap film rack displays.
"We price blank videotapes very competitively and feel if we're going out with a massive promotion, we need to be as cheap or cheaper than anybody else. The manufacturers have been extremely aggressive for the past couple years, and if anything, I have to tone them down as I only have so much space at stores," said Dan Van Zant, supervisor of nonfood.
Blank videotape has been a highly viable general merchandise category at Rosauers. The chain has lowered its blank videotape retails to compete with discounters and the mass merchants that handle the category.
"We were being supplied through a grocery wholesaler who frankly wasn't interested in that category, and was taking too high a margin," said Norm Carpenter, director of general merchandise. "We went to a direct-delivery distributor specializing in audio and video and got substantially better costs. We then were able to reduce our margins, which had a positive impact on sales." He added, "The category in a grocery store is still somewhat of an impulse [purchase] unless you have a video section, so that people won't easily spend $10 for the larger package size."