RETAILERS ARE MIXING UP PET SUPPLY LINES

JOEL ELSON

In the high-margin pet accessories section, supermarkets are devising a strategy to fight back against the growth of pet superstores.

Compared with pet superstores, supermarkets obviously have less space in which to merchandise their pet supply products.

While pet accessories enhance the one-stop shopping notion, nonfood executives polled by SN were divided in their approach. Some have opted to carry one or two major brands -- Hartz or Sergeant's -- while others feel buying products from various suppliers is the best defense against the pet superstores.

Pay Less Super Markets, Anderson, Ind., has opted for the multi-line approach. The chain began merchandising pet supplies in June around some eight to 10 different supplier lines at its three larger 80,000-square-foot stores. "Pet supplies carry better profit than pet foods, and a wider variety of accessories allows us to better compete against the larger assortment at killer category pet stores," said Rod Boni, grocery merchandiser at Pay Less.

The wider supply assortment creates a pet destination center image for Pay Less, whose accessory sets range from 12 feet to 30 feet.

"You've got to look at these large pet superstores with their very competitive pricing and variety, and figure out how to compete against them," Boni said.

For its larger stores, the retailer picked the top-moving items from the different suppliers that Pay Less customers might find at a pet super store.

Although a few years ago a supermarket might have got by with a single major brand in pet supplies, "you now must offer assorted brands and selections to compete against these large pet outlets," Boni said.

Store space is also a major consideration in determining pet supply sets. At Pay Less, officials are considering splitting the 100-foot pet sections at its bigger store into two 50-foot runs on either side of the grocery aisle.

"This would create more of a pet destination department ambiance," said Boni. Pay Less displays pet supplies between cat and dog food on shelf tiers and peg hooks.

At its smaller stores, the retailer continues to carry a narrower selection of pet supplies, with mostly Hartz Mountain items, Boni said.

Meanwhile, at several new A&P prototype stores in New Jersey and at its Philadelphia-based Super Fresh Markets division, the pet supply mix is also drawn from a cross-section of suppliers.

Again the growth of large pet supply discount stores justified the extensive accessory presentation offered in the approximately 92-foot-long Pet Shop pet centers. "These pet superstores' stock-in-trade is variety, and we're trying to show customers we have it too," said Mike Rourke, senior vice president of communications and corporate affairs, A&P, Montvale, N.J.

Rourke said the brand selection "in more than one line offers customers a broader choice." Pet general merchandise at these units is set in two 32-foot runs of gondola shelving, placed toward the rear of the pet section.

According to Rourke, the downside of carrying several lines is the chance of stocking lower-volume turns on some slower-selling items. Such a broader offering also takes more shelf space, obviously.

But the A&P executive was quick to point out that over the long term, "if you build the type of pet supply center we're trying to do in those departments, you'll get volume in all brands."

A&P will adopt this multisupplier approach for pet supplies at all new stores with sufficient space to house the Pet Shop prototype in a grocery aisle. In June, the retailer also started testing a freestanding Pet Shop format.

A&P hasn't yet expanded its Pet Shop destination concept into its other operating divisions.

"We have the Pet Shop destination department only at four to five stores at this point. It isn't widespread yet. At other areas we have multibrands at larger stores, but not as extensive as these test stores," Rourke said.

Other supermarket chains have tried different approaches. Homeland Stores, Oklahoma City, for example, carries pet accessories in a single major branded line.

According to Steve Mason, vice president of marketing, this offers a few more (promotion) dollars, and eliminates the duplicate stockkeeping units that develop with the two major name-brand lines.

And while the pet superstores have large display areas for a wide array of small pet supplies, supermarkets lack the space to merchandise most of these small items, he added.

"Coordinating many different brands through a direct store delivery program would also involve many suppliers," Mason said. Homeland merchandises pet supplies on 12 feet to 30 feet of shelving and J-hooks, set between wet cat and dog food on one side of the pet food aisle.

As part of a corporate decision a few years ago, Seaway Food Town, Maumee, Ohio, dropped a second major pet supply line from its 12-foot to 24-foot pet supply sets.

Since then the chain has concentrated instead on one major brand. "We used to think we needed more than one brand in pet chemicals, but since this change sales have been good. Pet supplies is still a good department for us since Hartz has the variety," said Bill West, director of nonfood.

Yet West pointed to the drawback of relying on a single major brand rather than on a variety of several vendors. "You're not able to work one vendor against the other," he said.

Another disadvantage, he said, is retailers often must agree to carry some of the supplier's slower-selling numbers.

West granted that taking a multisupplier approach in pet accessories may appeal to pet owners looking to choose from a larger mix. "However, we're a supermarket that sells pet supplies and cannot be a pet store," he asserted.