Supermarkets are catering to the needs of the growing number of people who are working at home and spending an estimated $69 billion on home office supplies.
Retailers are creating the departments to help prevent sales from eroding to large office supply specialty stores and mass merchandisers. Most sections feature folders and portfolios, upgraded notebooks and day planning books, pens and related merchandise at fairly competitive pricing. "People are becoming more interested in home offices. Even students have become accustomed to more sophisticated equipment," said Mike Adamson, communications manager and advertising manager for general merchandise at Associated Food Stores, Salt Lake City.
At Associated Foods, some of the better-turning items are staple office supplies: 5-inch by 8-inch personal planners and leather zippered desk-size planning binders, both $28.99 each; quadrille-ruled grid pads; legal-size pads, writing tablets and other pads. Home office items are part of back-to-school and tax-preparation product promotions. The promotion schedule may be expanded further due to the category's growth.
"Mass merchandisers definitely have the [lower] price on home and office products, but supermarkets offer convenience," said Adamson. Strack & Van Til Supermarkets, Highland, Ind., has 8-foot home office sections that offer envelopes, writing instruments, day planners, index cards and other staples. They are set up as part of the 28-foot-long school supply department. "Home office is pretty good as an everyday item in a grocery store. We occasionally promote it with organizers around tax season," said Joe Kolavo, general merchandise and health and beauty care buyer. Strack & Van Til would like to make the section even bigger to compete against specialty stores, said Kolavo.
"Competing against the super stationery and office supply outlets with aisles of space to display these products is becoming increasingly more difficult," Kolavo said. "Office supplies are probably a growing area for general merchandise. But in our stores it's tough because we just don't have the space to devote to larger destination departments." A large Southwest chain devotes a third to half of its 24-foot school sets to home office stationery items, according to the nonfood director, who asked to remain anonymous. "Stationery is a pretty good category for us. Sales are doing well," he said.
At Jitney Jungle Stores of America, Jackson, Miss., a new 20-foot-long dedicated home and office section was introduced at one store in April, said Al Booth, assistant director of general merchandise and HBC. The section -- placed in the middle of the store toward the front of the baby and school supply aisle -- contains 4 feet of Xerox products, copy papers, binders, brief covers, pens and pencils.
Meanwhile, home office items are part of the school and stationery departments at Harding's Friendly Markets, Plainwell, Mich.
The chain hasn't yet begun to carry furniture or equipment like computer stands, but may in the future if there's a demand for it.
Harding's, whose top retail is a $20 small storage press board file cabinet, also may expand the department.
Harding's home and office pricing "stays in the ballpark with the large home and office retailers," said Dave Lynam, nonfood buyer, "but we don't try to be a price leader in the category since we offer convenience." This fall, Scolari's Warehouse Markets, Sparks, Nev., may roll out its first 8-foot in-line home and office sets at two or three larger stores. "With the products that Office Max and other large office supply stores are selling, we'll be looking at a basic product mix in home and office products," said Mike Van Brocklin, supervisor of nonfood. The increased use of computers is also prompting the chain to begin thinking about home and office sections, especially "with all the computers out there," added Van Brocklin. Scolari would first go through its wholesaler, Certified Grocers of California, for these items.
"With people working at home more, there is enough business to support the category," said Van Brocklin. The chain's stationery sections currently run 12 to 32 feet.
Competing with the big office supply outlets and the mass merchandisers on pricing isn't a given to succeed in the category, according to Van Brocklin. "If we're in the ballpark with price, shoppers will pick up the key items at our stores like copy paper and cartridges for printers and many other items," he said. At Carr Gottstein Foods, Anchorage, Alaska, stationery and school supplies sections are 24- to 40-foot departments, with half the space allocated to home office supplies.
While the everyday mix revolves around a cross section of small office items, Carr promotes small cardboard storage boxes at $2.99 to $5.99, and two-drawer metal file cabinets at $12 to $19 for back-to-school and tax season. Items are displayed in the seasonal promotional aisle. "Home and office is a growing category, and when we bring these larger items in once or twice a year as an in-and-out promotion they do well," said Gary Schloss, vice president of grocery and general merchandise.
Though some chains said computer-related products don't do well, Schloss said consumers are becoming more interested in them.
"There's a new focus on single sheets of copy paper for printers and fax machines instead of rolls of paper," he said. Carr merchandises reams of fax paper in two or four facings. "The paper complements the Sanyo and Sharp fax machines that we sell in our photo and sound departments at $299 to $499," he said. Carr prices its home office and school supplies extremely competitively with large stationery stores. About 12 to 20 items are promoted every 30 to 45 days. Fax machines are advertised monthly; file cabinets, several times a year, and other items run as in-store features at 10% to 20% off.
"We're very competitive on fax machines with the big guys in town. We match the office superstores on computer copy paper," said Schloss. Associated Wholesalers, York, Pa., is developing a new 4-foot section that will feature 41 home office stockkeeping units. The new sets are slated to start rolling into stores this month, with about 50 larger operators expected to implement it by next year.
"There is enough home and office business out there to warrant [extra] space," said Deb Kehr, general merchandise buyer. The section, which is planned to be located adjacent to school supplies, will include copy paper, professional typing paper, columnar pads, daily planners, rent receipts, ledger and cash books and pad folios. The highest retail in the mix will be $8.99, she said.
The future of home office sections holds strong potential for the grocery channel, particularly due to the increased popularity of fashion-oriented products.
"In notebooks, kids have progressed from a filler paper mentality to more fashionable school products over the past few years," said Adamson of Associated Food. Booth of Jitney Jungle said the success of the category will be linked closely with the trading area and level of competition. "It will depend a lot on the demographics of an area," Booth said. Kolavo of Strack & Van Til said the future success of home and office products in the supermarket will be linked closely to the amount of space and advertising activity devoted to the category. Sufficient advertising is needed to help compete against specialty stores.