Viewpoints

Supermarkets Can Cook Up Housewares Profits

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Food and cookware are the perfect union of complementary product categories especially during holiday cooking and gift-giving seasons. So why aren't we seeing this union consummated more often in the grocery aisles?

Some observers say supermarkets have abdicated cooking-related hard goods and other housewares to the discounters and supercenters, the leading purveyors of housewares sales. Most food retailers stock and merchandise housewares, particularly bakeware and kitchen tools, as a convenience and sometimes as an afterthought.

Price points are a challenge. The thinking is if retails on housewares are too high, then grocery shoppers — often on a budget — will not buy. If the retails are too low, quality of goods suffers. If shoppers are disappointed because of quality, then they won't buy either.

Consultant Jim Wisner, who has conducted research on housewares merchandising, said during focus groups shoppers have said if they need an item immediately they would do without it if they perceive it to be low quality.

Wes Jackson, chief merchandising officer at United Supermarkets, believes grocery retailers can get their fair share of housewares if they can change consumer buying patterns. United announced last week it has begun running a free professional cookware promotion through March 29. The branded stainless line is Thomas Rosenthal and exclusive to United. Suggested retails on various pieces in the 10-item set range from $39.99 to $99.99.

However, shoppers can get items for free based upon what they spend in store. For every $10 spent at United, Market Street and Amigos stores, shoppers will receive a bonus sticker that can be applied toward a cookware piece. To obtain a free 8-inch fry pan, for example, a shopper would need 60 bonus stickers. Shoppers could also purchase the piece at a reduced price of $9.99 with 30 bonus stickers or buy it for the suggested retail of $39.99.

Research shows that 95% of those who take advantage of such promotions will obtain the merchandise for free, said Jackson. “The cookware is not intended to be for profit,” he said. It is intended to motivate shoppers to spend more at United to earn “great quality cookware that most consumers would like to have.” The promotion is being given solid in-store and ad support. Jackson's goal is to lift store sales by 4%. United faces a large expense of doing business if consumers fail to respond, Jackson noted.

On Dec. 2, SN and the International Housewares Association will present a webinar on how supermarkets can generate housewares profits. In conjunction with this, IHA is challenging food retailers to demonstrate they can win in housewares by submitting their best ideas for increasing sales. Those who submit their ideas will have a chance to win a free hotel stay during the 2011 International Home + Housewares Show, March 6-8 in Chicago. Look for more details on this in coming days.

Meanwhile, cooking food in a good pot predates the pilgrims. So make sure customers have a quality pot to cook in for the holidays.

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Contributors

David Orgel

David Orgel is executive director, content & user engagement, of Supermarket News (SN) and its website, SupermarketNews.com. Orgel delivers his opinions on industry trends through a bi-weekly...

Jon Springer

Jon Springer has been writing about food, food retailers and food retailing for more than 10 years, and is in his second tour of duty with Supermarket News. His prior experience includes covering the...
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