FARM FRESH IS CONDUCTING ITS ENTRY INTO MUSIC SECTIONS

DAN ALAIMO

NORFOLK, Va. -- Farm Fresh here is in the music business.

Last month the retailer put in a test 40-linear-foot music section in a Norfolk store, said Ron Dennis, president of Farm Fresh. Eight other departments, to be managed and supplied by Fresh Picks, Richmond, Va., are slated for installation within a month. Fresh Picks operates a similar program in 52 stores of Star Markets Co., Cambridge, Mass.

"The initial response has been very favorable from the customers and we are real pleased with the results," said Dennis. "I can't say that it is going to be the next T-bone steak, but it is certainly an opportunity to get closer to where we want to be, and that is a one-stop shopping headquarters for the customer. The more services we can provide the customer at good retails, the better we are going to be. There's definitely a market for music," he said.

The eight-store pilot will run for 90 days and plans are to extend it to all 45 Farm Fresh stores. "If all goes well, we will roll out during the late summer and fall," said Michael Rigby, president of Fresh Picks. Fresh Picks is in discussion with four other retailers about putting in the program and hopes to have 150 locations by the end of the year, he said.

Farm Fresh's decision to put in the Fresh Picks music program comes on the heels of its acquisition by Richmond, Va.-based wholesaler Richfood Holdings. Richfood said it plans to spend about $90 million to renovate and expand Farm Fresh stores in the next two years, according to press reports.

The Fresh Picks program features modular merchandising racks holding up to 800 music titles and advanced inventory-control and theft-prevention systems. The music offerings feature front-line music titles sold at prices competitive with the mass merchants. Budget titles and specialty products, like Celtic music advertised for St. Patrick's Day, also are part of the program.

In the Norfolk Farm Fresh store, the department is located in an alcove area adjacent to the checkstands, said Dennis. "It takes the place of a couple of grocery gondolas," he said. The area was remerchandised to fit in the music program. "We were able to work it in and it came out surprisingly well," he said. Special floor tiles in the area set it apart from the rest of the store.

"With the Fresh Picks program, it was important to provide enough room for customers to browse," he said. Farm Fresh also put books and magazines in the area, and computer software on an endcap, he said.

When asked why music, Dennis said, "My take on it was, why not? It's incremental sales. We don't have music in the stores now." After reading about Fresh Picks success with Star, Dennis recalled a successful music program he was involved in with another chain. "Years ago at Albertson's in Florida, we sold records and tapes and did very well with them," he said.

The Fresh Picks program has a good solution to the shrink problem that has bedeviled past efforts to put music in supermarkets, Dennis noted. The CDs are protected by a plastic case that can only be opened by a special device at the checkstands. "If the customer tries to take the CD out of the package without using the device, it will destroy the product," he noted.

Fresh Picks operates like a service merchandiser, but Rigby said the company is more than a rack jobber. "We have a retail focus," he said. Nonetheless, Fresh Picks won the Small Wholesaler of the Year award during the National Association of Recording Merchandisers convention held earlier this year.

Another recent addition to the Fresh Picks program is a five-year agreement with N2K Inc., New York, to put its Music Boulevard on-line kiosks in the music departments. Through the interactive touch-screen kiosks, customers will have access to some 200,000 catalog titles. When not being used, the kiosks can show music videos to promote titles.

The first kiosks will be installed soon in 10 stores of Star Markets Co. and Farm Fresh, Rigby said. After a test period, "we plan to retrofit the kiosks into most existing departments," he said. Customers order using their credit cards and the product is sent to the service center for delivery, thus bringing the customer back into the store, he said.

"With the inclusion of the on-line kiosk, the supermarket can truly satisfy all demand and become a destination for music purchases," said Rigby. "It becomes the world's smallest music megastore."

Fresh Picks customizes the inventory selection for each store it supplies, he noted. "We can calculate on a store-by-store basis what the optimum size and configuration should be." By analyzing music sales in a given market, "we can accurately predict the sales volumes for the departments," said Rigby.