RETAILERS SEE STRONG SUMMER DESPITE EL NINO

BRENDA LLOYD / Additional reporting: ELLIOT ZWIEBACH / DAVID ORGEL

(FNS) -- Supermarkets across the country are projecting strong summer sales this year, despite negative effects in some areas from El Nino weather patterns.

Special events and promotions, like Minyard Food Stores' "Texas Ranger for a Day" sweepstakes and an A&P air-miles program, have helped spur sales. Some stores report particularly good business in tourist areas. The usual products head the list of sizzling summer hot items, such as barbecue meats, cold drinks and bottled water, and ice cream. However, sales of some produce items, including watermelon and lettuce, have been hurt by higher prices resulting from the effects of El Nino. A few stores on the West Coast have gotten off to a slow start because of El Nino-effect cool weather and rain.

According to Michael Rourke, the just-retired senior vice president of communications and corporate affairs at A&P, Montvale, N.J., promotions are fueling much of his company's sales pickups in a number of areas in its wide geographic reach. Besides an Ontario program, where shoppers are rewarded for spending at certain levels, A&P has introduced a new campaign in metropolitan New York called "The Great New York Just Next Store," which has retooled advertising and in-store service.

A&P also is getting good sales upticks in its tourist areas, which include the shore areas of the East Coast, such as Cape Cod.

Rourke said that traditional summer barbecue items have been strong in its markets, including spare ribs, steaks and ground meats.

"We're putting a major store emphasis behind perishable items and we're seeing good results for the summer," he said.

Ron Johnson, president and chief operating officer of Jitney-Jungle Stores of America, Jackson, Miss., noted good summer sales since Memorial Day weekend, which is "partly due to the fact that so many of our stores -- in Florida and along the Gulf Coast -- are summer destinations, and sales were very strong in those areas, as well as overall.

"We attribute the strong sales to our ongoing efforts to promote the Gold Card [loyalty] program.

"Our ads featured traditional items built around cookouts, and those always do well. Since Memorial Day, we've been pleased with where we are, and a lot of it has to do with [improved] merchandising in the stores."

Charlie Burns, senior vice president of marketing at Minyard Food Stores, Coppell, Texas, said that his company's sales have been very good and "beyond our expectations" since January. As Minyard wound up its fiscal year the end of June, sales were up "significantly" in the fourth quarter, and strong sales should continue, he said.

Burns said he believes the sales strength comes from a strong economy in his area, but he noted that Minyard also gives its consumers a choice in its three divisions -- Carnival, which targets Hispanics; Sack 'N Save, the warehouse division where shoppers bag their own groceries and can save up to 20% on groceries; and Minyard, which has regular food stores.

"The way it's going now, we should continue to have real good sales," Burns said, adding that the company's promotions, good advertising and good merchandising help make it possible.

Minyard's hot items this summer are traditional summer items, including "anything liquid," Burns said. "Milk, soft drinks, ice and bottled water continue to be among the strongest items. It's a heavily advertised area, and we're competitive, and the competition is very tough." Other hot items include produce, such as peaches and greens, which Burns said will be strong sellers throughout the summer. "Corn is good when you can get it," he added, "but El Nino has hit us from several areas."

Watermelons usually are popular, too, but a dry spell in growth areas means higher prices this year. Other hot items include hamburger meat and beef brisket, fryers and hot dogs.

Burns said Minyard introduces a new promotion once every four to five weeks to entice shoppers. A recent one, tied in with the Texas Rangers baseball team, was a total value prize of $17,000, including cash, a "Pro baseball" Caribbean cruise for two, and celebrity treatment at a Rangers game at The Ballpark in Arlington June 22.

Robert Piccinini, chairman, president and chief executive officer of Save Mart Supermarkets, Modesto, Calif., said that his company's sales have been "pretty good." He explained, "We don't see it as something seasonal but as something related more to the economy, which has been very strong over the past six to nine months."

But because Save Mart is located in a major growing area -- California's Central Valley -- much of the company's business is linked to the weather and agriculture and to the people (farmers, migrant field workers and local cannery workers) whose incomes depend on those factors, Piccinini said. "If the farmers are really struggling, that means there's money that isn't being pumped back into the communities we serve," he said.

He added that bad weather has already wiped out the local cherry crop, and tomatoes are hurting. "That could affect some prices this summer," Piccinini said.

Beginning with Memorial Day and continuing for six weeks, Save Mart's advertising and promotions have revolved around its sponsorship of the National Association for Stock Car Auto Racing Winston Cup race at Sears Point in Sonoma. The theme of all of Save Mart's advertising is geared to the race, which the company has been sponsoring for seven years. "It's integrated into all that we do," Piccinini said. "For example, we have cars and drivers at various stores, we sell tickets and we have prize giveaways."

Piccinini said that it's difficult to judge how much any advertising boosts sales. However, he added, "Attendance at the race has been increasing every year, so we like to think it's helping our business as well."

Jack Brown, chairman, president, and chief executive officer of Stater Bros. Markets, Colton, Calif., said that his sales were up on both Memorial Day weekends, meaning the three-day weekend and the actual holiday weekend that followed. He added, "I think our sales will be strong throughout the summer because there's a new housing tract in our area in which homes will be completed this summer. People like to move in during summer, so there's real anticipation on our part of that new business."

Hot items at Stater Bros. Markets are 3-pound packages of ground chuck at 89 cents per pound, jumbo hot dogs, watermelon, fresh corn, and soft drinks, including the company's feature of 89 cents for a six-pack -- even though prices of soft drinks were "footballed all over the place by everyone," Brown said.

Carole Bitter, president and chief executive officer of Harold Friedman Inc., Butler, Pa., said that she was pleased with early summer sales. "In fact," she said, "sales have been good for the past 18 months, with identical-store sales up every week. Part of the turnaround has been our ability to get across our price message."

She noted that the price image of Harold Friedman, which operates seven medium-sized units, hasn't been as strong as it should, but the company has been striving to change that perception. Bitter herself does radio commercials that talk about outside price checks, and she has a monthly radio program called "Ask the Grocer," during which she answers consumer questions. Also, she said, "People feel free to call me at my office anytime. All of this has helped, along with more participation by store people in community activities, which gives them a chance to talk about our price image."

Bitter added that Harold Friedman has had a series of promotional events to supplement its advertising and had cookouts in the parking lots in May. "Those kinds of events take a lot of time and energy," she said, "but they build excitement at the store level. We're even doing in-store demos during the week, which is unusual."

Some general-merchandise items, made available to Harold Friedman by its wholesaler, have been surprise top sellers during the early part of the summer season, she continued. These include a 10-piece set of patio furniture for $99.99, a kids' six-piece furniture set for $29.99, American flags, chargrills, inflatable swimming pools, and badminton and volleyball games for the backyard. "These are big items that are priced right, and we have enough room in our larger stores for displays," she said.

She noted that, as major discounters are moving more into selling food items, her company is moving more into the merchandise that the discounters are selling. "This movement has surprised everybody," she said.

Lynda Trelut, executive director of advertising at Nob Hill Foods, Gilroy, Calif., said that sales at her company have been adversely affected by unseasonably cool weather and rain, thanks to El Nino. "The weather has had an effect on the barbecue season," she said. "Temperatures are 10 to 15 degrees below normal, so that has affected [sales of] seasonal products like suntan lotion. We're on hold until it warms up."

She added, however, "This does not prevent me from predicting a good year. Once things kick in, I expect it to be a strong season. We have a great new line of beef, certified Angus beef, which should be a real boon to the barbecue season." Indeed, sales were strong over the Memorial Day weekend, she said.

An area that she believes will increase this year is meal-ready and close-to-meal-ready products.

Because Raley's Supermarkets, based in West Sacramento, Calif., acquired Nob Hill Foods in January, the company isn't currently planning any new promotional or advertising campaigns, Trelut continued. "Our challenge this year is to make this transition as seamless as possible to our customers."

Dan Black, managing buyer of the drug and general-merchandise department for Raley's Supermarkets, also said that early summer sales have been slow because of unseasonably cool and rainy weather. However, sales are beginning to pick up.

"We're in the middle of the El Nino effect," he said. "It's usually hot and dry here, but it's 20 degrees cooler here than usual, which has affected sales." Even Memorial Day weekend was cool and cloudy, he said. The weather also has affected produce. "We're not getting the fruits and vegetables we normally get and the quality is less in some cases."