General merchandise is becoming a bigger part of the supermarket offering, but with a wider array of products and price ranges. More convenience and familiar brand name partnerships also are increasing as part of retailers' nonfood strategies.
Dollar sections are expanding rapidly among many chains, including Kroger, Wal-Mart and K-VA-T, which has taken the innovative approach of integrating the dollar merchandise into the aisles with related categories. Retailers are carving out more shelf space for private-label merchandise, and H.E. Butt Co. recently opened up an in-store outlet of low-priced shoe retailer Payless ShoeSource. But higher-priced goods are also moving. Everything from jewelry to electronics to upscale housewares items are finding their way into supermarkets, and they are selling.
"I believe we'll see growth in the existing players who have the wisdom to continue to transition their formats and strategies to meet the needs of a shopper who is seeking more convenience and a retailer who really understands what they want," said Dave McConnell, president and chief executive officer, General Merchandise Distributors Council, Colorado Springs, Colo.
"More stores are selling more things you would buy at the big-box retailers, like DVD players, vacuum cleaners, televisions; also affordable, assemble-yourself-type furniture," said Ken Bruce, director, nonfoods, Martin's Super Markets, South Bend, Ind. "You have to sell off many cans of corn to get the revenue you can receive from one vacuum cleaner."
While retailers like Hy-Vee have successfully staged tent sales offering widescreen televisions selling for as much as $1,498, this trend is in evidence across many other categories. For example, in lighting, high-priced decorative bulbs are much in demand. In housewares, the operative word is "decor," whether it comes to everyday purchases or seasonal celebrations. In batteries, it's the high-drain products for sophisticated electronics like digital cameras that are taking off in sales.
Other product trends identified this year included scrapbooking, toll transponder devices, inexpensive cellular phone accessories and storage products. And even old, established categories like magazines have been reasserting their presence with new displays and studies that prove their value to retailers. The result for many retailers is a reinvigorated front end.
Services that make life simpler for customers proliferated. Two examples: 30-minute photo processing at Albertsons and overnight digital print processing at Giant Food/Landover.
Meanwhile, supermarkets continued to expand alliances with other retailers. For example, Albertsons rolling out Toys "R" Us sections and testing Office Depot sections, H-E-B's affiliation with Payless and Kroger putting a Radio Shack section in a Raleigh, N.C., store.