BROOKINGS, Ore. -- Finding high profit margins in video, C&K Market here is making 2,000-tape departments a part of every new and remodeled store, said Larry Hage, division supervisor/video buyer.
The company will have added three departments by the end of the year, with another on the drawing board for the first half of next year, Hage said.
Two have been completed already, and a third is planned for an October opening. In most cases, Hage noted, C&K is putting video departments in stores that never had them before. "The remodeling opens up space to put in a legitimate video department," he said.
"We depend on video. It creates a lot of profit for us," he said. "We realize gross margins out of the video service center that you can only dream of in the grocery business. We are running right near 65% gross margin for video rental for the total company."
C&K now offers video rentals in 30 of its 38 stores, with inventories ranging from 1,100 to 3,000 tapes. The sections are merchandised nonlive, with the actual tapes kept behind the counter and as part of the stores' service centers. Other service-center offerings include Western Union, faxing, copying, key-making and UPS shipping.
Even though C&K's departments are not live, they are still merchandised to capture Hollywood excitement, Hage said. "We spent some extra money on the decor so it looks like a movie theater -- the customers see the appearance of a movie marquee, there's a little bit of neon and flashing lights, and 'Coming Soon' signs. We try to create a store-within-a store without removing it from the flow of traffic."
