The baby aisle is giving supermarket retailers a lot to cry about these days, as key sales from the coveted young mother are no longer just crawling, but walking out of their stores and into the arms of other retail outlets.
Dollar sales for the Top 10 brands of the main baby categories -- diapers, ready-to-drink formula, food/snacks, accessories and wipes -- were down at food stores for the 52 weeks ended July 13, 2003, according to Information Resources Inc., Chicago. Sales of disposable diapers slipped 10.3% to $1.2 billion; food/snacks, 1.4% to $735 million; wipes, 6.3% to $245 million; ready-to-drink formula, 15% to $189 million; and accessories, 3.1% to $172 million, according to IRI.
While mass merchandisers pose a big threat to supermarket baby departments, other outlets are also formidable competitors. One is the category killer that not only carries toys, equipment and apparel, but also diapers, wipes, formula and food.
One of the biggest baby specialty stores is Babies "R" Us, which operates about 185 stores nationwide. A division of Toys "R" Us, Paramus, N.J., Babies "R" Us strives to provide everything for babies. Baby apparel, equipment and bedding are clearly the retailer's focus, although diapers, wipes, food and formula maintain a presence as well.
BRU is a threat to supermarkets because it's solely dedicated to the young mom, carrying everything that a baby could possibly need, said Don Stuart, partner, Cannondale Associates, Wilton, Conn., a sales and marketing consulting firm.
But the retail format isn't as competitive as mass merchandisers because it doesn't have variety of offerings in key categories, especially food.
"Many moms may buy diapers and formula at stores like Babies 'R' Us, but supermarkets offer a breadth of assortment in food that moms can't get at Babies 'R' Us," said Alison Chaltas, vice president, Euro RSCG Meridian, Westport, Conn., a management consulting firm.
Furthermore, BRU doesn't get the frequency of store visits or the amount of foot traffic. The reason for this is that most BRU consumers want big-ticket, yet infrequently purchased items like baby strollers and playpens -- not staples like diapers and food.
True, diapers and food are an important part of the mix at BRU. But they're mainly used as a price draw to get consumers into the store, Chaltas said.
Still, supermarkets need to keep a close eye on the format. The main reason for this is that they need to keep the young mom in their stores.
After all, mothers with young children are the supermarket retailer's most valuable customers. They spend more than other customers not only in the baby aisle, but also in the rest of the store. The young mom's grocery basket is typically about $80, compared to $30 for other shoppers. Plus, gaining a young mom's loyalty can have long-term benefits.
"You want to win over [young moms] so you can keep them for the next 20 years as they raise their children," Chaltas noted.
To get a closer look at the baby superstore outlet, SN conducted mid-August visits to a BRU unit in Commack, N.Y., a Long Island suburb. The store sits in the same shopping center as a King Kullen supermarket. SN compared regular pricing and selection.
Diapers are about $1 to $2.50 less at BRU. What's more, BRU shoppers can find the larger "mega" and "value pack" sizes that aren't carried at King Kullen.
King Kullen offers plenty of "jumbo" sizes, which contain about 25 to 60 diapers, depending on a baby's weight. But "mega" sizes -- which contain about 50 to 70 diapers -- are scarce. The only "mega" size that SN found was for the Huggies brand. It retails for $15.99. In comparison, the same size is $13.69 at BRU.
Shoppers can save more at BRU by purchasing one of several value packs stocked. For instance, a Huggies value pack, which contains between 118 and 192 diapers, is $29.99. A Pampers value pack with comparable diaper counts is also $29.99.
BRU has lower prices in other areas as well. Huggies Little Swimmers swim diapers, 12-count, sold for $7.49 at BRU, compared to $8.99 at King Kullen. Likewise, a jumbo pack of Pampers Swaddlers newborn diapers is $9.59 at BRU, $10.99 at King Kullen. BRU offers even deeper discounts on its private-label brand, Especially for Baby. A "mega" size of Especially for Baby diapers is $10.99, while a value pack is $21.99.
Dianne Muscolo, a mother of a 7-month-old baby, makes a special trip to BRU every two weeks to buy the Pampers value pack for $29.99.
"Supermarkets are much more expensive," Muscolo told SN as she shopped the BRU diaper section. "So I come here or go to Costco," the warehouse club store chain based in Issaquah, Wash.
Muscolo said she can easily spend up to $20 at supermarkets for a "mega" size of diapers, which typically lasts about one week. For $29.99, she buys the Pampers value pack at BRU instead. Based on her baby's weight, this means she gets about 120 diapers.
BRU also wins the price battle in the formula category. A 1-quart bottle of Similac with Iron is $4.99 at King Kullen, compared to $3.69 at BRU. Meanwhile, a 1-quart of Similar Advance formula is $5.85 at King Kullen; compared to $5.39 at BRU.
In the 8-ounce, boxed baby cereal segment, pricing is comparable at both retailers, although several items are cheaper at King Kullen. An 8-ounce box of Gerber's Rice cereal is $1.59 at both retailers. But an 8-ounce box of rice with bananas is $1.69 at King Kullen, $1.99 at BRU.
King Kullen is also priced competitively in other areas of the baby food category. Gerber Graduates Lil' Entrees is $1.99 at both retailers. Gerber Graduates Pasta Pick-Ups, 6 ounces, is $1.19 at King Kullen, compared to $1.29 at BRU.
However, consumers can save money at BRU by buying larger sizes of cereal boxes that aren't available at King Kullen. One example is a 16-ounce box of Gerber rice cereal that sells for $2.89 at BRU.
A 32-ounce plastic bottle of Gerber white grape juice is $2.39 at King Kullen, while 64-ounce size at BRU is $3.49. Still, when it comes to choices, supermarkets prevail.
King Kullen, on the other hand, stocks a wide variety of jarred foods, not only from Gerber, but also Beech-Nut and other manufacturers. It also carries several organic selections, including Earth's Best from Hain Celestial and Tender Harvest from Gerber.
Lester Lucas, father of a 9-month-old baby, shops at BRU every two weeks to buy the large sizes of formula and cereal, a trip he said saves him $2 to $4. While there, he also buys the large packs of diapers, a $6 savings.
This type of consumer attitude is typical when it comes to a category killer like BRU, said Stuart of Cannondale Associates.
"A lot of consumers may be willing to buy wipes and diapers at Babies 'R' Us, but will go to the supermarket for the wide selection of food," Stuart noted.
Wipes are less expensive at BRU. An 80-count tub of Pampers wipes are $3.99 at King Kullen, compared to $2.99 at BRU. As in the diaper and food categories, BRU offers larger sizes that King Kullen doesn't, including a 160-count refill Pampers pack, $4.99. BRU consumers can save even more by purchasing the Especially for Baby private-label brand. An 80-count tub of Especially for Baby wipes sells for $2.49, a 10-cent savings over the same size of King Kullen-brand wipes.
Still, there isn't much variety at BRU. For instance, King Kullen carries a full range of the many new flushable wipes on the market: Playtex Wet Ones, Charmin Kid Fresh, Pampers Tidy Tykes, Quilted Northern Moist Ones and Kleenex Cottonelle Fresh. BRU doesn't carry flushable wipes.
SN interviewed a mother of an 18-month-old baby who was purchasing a tub of Pampers wipes. At the time of the interview, the only other item in the woman's shopping basket was a diaper bag that she planned to buy for a friend's baby shower.
The woman, who would identify herself only as Bonnie from Smithtown, N.Y., said she was buying the wipes strictly for convenience reasons. She felt wipes would complement the diaper bag she was buying as a shower gift.
Bonnie said she doesn't regularly shop BRU because she says it's more expensive. She'll only go to the superstore if she's buying a baby gift.
Parents can save on diapers and formula at Babies "R" Us, but pricing in other categories is comparable, and even cheaper for some products, at King Kullen.
NOTE: Prices effective the week of Aug. 17, 2003, and reflect regular retails without any specials or discounts.
PARAMUS, N.J. -- The Babies "R" Us division of Toys "R" Us started in 1996 as a single unit in Westbury, N.Y. Today, it operates 185 stores.
The specialty retailer has significantly expanded its business over the years. During 1997, the former Baby Superstore chain joined BRU, giving the BRU business an additional 73 stores. Since then, BRU has added an average of18 locations each year.
BRU's goal is to offer "everything new or prospective parents need all under one roof -- apparel, furniture, car seats, bedding, strollers and more," according to its Web site.
Special services include a special-order department, a baby registry service and an in-store mother's room.
In 2000, BRU launched the babiesrus.com Internet shopping site. In 2001, it transitioned babiesrus.com to the amazon.com platform.