OKLAHOMA CITY -- A 20% increase in sales on selected nonfood categories indicates shoppers are responding positively to category resets made by Fleming Cos. here over the last year.
The increases were registered by some of the more than 500 Fleming stores that have installed new planograms based on applying category management in several general merchandise and health and beauty care departments, reported Bob Dickson, corporate vice president of marketing and procurement. "It is better than our initial projections of 15%."
Under a two-year project begun by Fleming in 1996, there are now more than 200 stores that have reset all of the following categories: deodorants, eye and ear care, hair care, oral, shaving, skin care, lighting and electrical, and pet, Dickson told SN.
By October, the wholesaler will have completed category management analysis of 24 nonfood departments. In total, there will be about 30 nonfood departments that will have undergone category management. The wholesaler had originally targeted 60 nonfood departments for category management.
"We've done some combining of subcategories that made sense to merchandise together," said the Fleming executive. These include diet and nutritional; eye and ear; lighting and electrical; antacids and laxatives; batteries, flashlights and film; bakeware and cookware; work gloves and hardware; and video, audio and photo. Cough and cold are now a subset of analgesics and school, home and office are part of stationary. Also slated for category management are cosmetics, batteries, party goods, baby care, kitchen domestics, stick goods, hardware and foilware.
With the new sets, Dickson said gross profits also went up. "In lightbulbs, for example, you need the high velocity four-pack, soft white bulbs, as well as the better profit decoratives and specialty bulbs, but these are frequently missing from a typical supermarket lighting mix," Dickson commented.
"You can take the same selling space and with the right mix increase margins by adding some of the newer special-purpose bulbs, that command a little better gross margin," he stated.
As Fleming expands its category management approach to nonfood, a retailer typically gets from one to three departments merchandised at a time.
According to Dickson the nonfood sets going into stores contain between 92% to 95% of HBC items sold nationally, and 70% in general merchandise, with the balance represented in regionally procured brands, such as locally manufactured angle and corn brooms in stick goods.
Under the transition to nonfood category management, Dickson said departmental shelf allocations remains basically unchanged. "The new shelf schematics also reflect more profitable, better turning items for more efficient use overall of shelf space," he said.
The effort also includes retagging general merchandise and HBC shelf codes at all Fleming nonfood retailers under the wholesaler's corporate effort to centralize nonfood procurement. A universal control numbering system is being implemented across all Fleming divisions, Dickson said.
Fleming's retail customer base totals 3,100 supermarkets in 42 states including about 275 corporate stores. The retailers are supplied with nonfood items from Flemings's six general merchandise divisions -- Memphis, Tenn.; Topeka, Kans.; La Crosse, Wis.; Dallas; Sacramento, Calif.; and King of Prussia, Pa.
Currently, each division is focusing on resetting all nonfood sections at between 80 to 100 stores. "We want to see if the numbers change and if the consumer sees a significant difference at the shelf level from the standpoint of mix, promotions and advertising,"Dickson said.
About 75% of the set remerchandising is being done by Minneapolis-based Professional Inventory Management & Merchandising Service and Atlanta-based National MegaForce. Both conduct in-store merchandising services and prepare new shelf planograms with adjustments for individual stores and regional needs.