RETAILER MAKES A CASE FOR BULK SALES 2004-08-16 (2)

Lucia Moses

CHAMBLEE, Ga. -- As a small store whose extensive ethnic offerings have helped it grow a loyal Hispanic clientele, El Valu might seem to have "Wal-Mart-proofed" itself.

Yet its owners know differently. That's partly why it decided recently to devote some of its precious 27,000 square feet to expand its sales of cases of laundry detergent, paper towels, bottled juice and other Center Store staples.

Encouraged by the success of trial case sales on a handful of items, the owners of El Valu expanded the tactic, hoping it will enable their suburban Atlanta store to defend itself against mass merchandisers, as well as grab a larger share of business from the market's growing number of bodegas, door-to-door salesmen and big, first-generation Hispanic immigrant families.

Eight years ago, Costco opened a warehouse nearby. Now, Wal-Mart Stores, Bentonville, Ark., wants to build a supercenter about a mile away from El Valu.

"Places like Costco are so much more becoming our competitors," observed Dennis Mathews, who co-owns the two-store operation with Larry Buckles.

The case sales approach is similar to that taken by larger, admired chains like Wegmans Food Markets, Rochester, N.Y., and H.E. Butt Grocery, San Antonio, which have been seen to heavily promote items in large sizes.

The cases are being displayed on pallets at the front of the store, where shoppers can see them upon entering. They'll also be shown in store shots on forthcoming Spanish-language television ads, the owners revealed.

El Valu plans to swap out the pallet display items every 30 to 60 days, and eventually make some of them permanent to the section.

In trying this tactic, the Chamblee store is taking a page from El Valu's other store, a 60,000-square-foot operation in nearby Smyrna, where high-demand items like beans, paper products and watermelons are routinely displayed on pallets.

"It's an experiment at this point," Buckles said. "Certainly, we hope the additional sales we might generate in the category will attract vendors of Hispanic products to work with us in working products into that section permanently. If we're a vehicle to move cases, they tend to pay more attention and offer steeper allowances."

Making room for the cases in Chamblee required El Valu to sacrifice one Center Store aisle. Popular products from that aisle were dispersed into the remaining aisles; slow-sellers were pruned.

The reset also provided an opportunity to re-sort products that have been added over the years to cater to the area's diversifying Hispanic population. While 75% of the Chamblee El Valu's clientele is still of Mexican origin, it increasingly includes people from Central and South America, Mathews said.