RETAILERS STRIVE TO KEEP SUMMER SALES HOT

Greg Gattuso / Additional reporting Elliott Zwiebach

Summer sales are turning out to be a lot like the weather -- there are a lot of hopes for a good season, but no guarantees.

Just as a sudden thunderstorm can ruin a picnic, variables like the local economy, competition and yes, weather, can impact store sales, retailers told SN in an informal survey.

With five weeks left in the season, retailers are at the midpoint of their summertime promotions, where a variety of methods -- new ideas in marketing, merchandising and advertising -- are being employed to head off the uncertainties of summer.

Prevo's Family Market, a nine-store operation based in Traverse City, Mich., expects to see sales increase anywhere from 125% to 250% above winter levels in selected stores, said Aaron Prevo, director of finance and marketing.

"Overall, the economy is good and a lot of people are on vacation," he said. "And the weather has been fantastic, compared to last summer. It's had a huge impact on beer, wine, pop and chips."

Prevo said seven of the company's nine stores are situated close to northern Michigan's vacation destinations and cater to day-trippers in search of convenience food items, as well as umbrellas, towels and coolers.

Prevo's other two stores, which had grand re-openings last week after being acquired from Hudsonville, Mich.-based Family Fare, are located further downstate in Grand Rapids. Prevo said he does not expect to get a sales boost from vacationers at those stores.

However, the northern Michigan stores have been gearing up for the summer crowd since late May, Prevo said.

"This is a seasonal area," he said. "Every year we get an influx of people from Chicago, Detroit and Grand Rapids, who come to the Lake Michigan resorts."

Since May, the company has been running regular weekly newspaper advertisements, along with TV, radio and billboard ads emphasizing its fresh departments and convenience items.

"Basically, we start in late May-early June emphasizing convenience items -- pop, snacks, beer, wine, hamburgers, ketchup and mustard," Prevo said.

New this summer is an expanded, user-friendly wine section, which is already one of the chain's most profitable departments.

"We're averaging a $7 ring and we get a 25% gross profit, with very little labor involved because it's vendor-supplied," Prevo said. Another new merchandising idea is a "s'mores endcap," which features chocolate, graham crackers and marshmallows -- everything needed to make the summertime treat, except the fire.

Sales at Minyard Food Stores, Coppell, Texas, are up 8% to 10% this summer, according to Charlie Burns, senior vice president of marketing, due to a combination of factors, he said, "including the fact that we're doing a better job of merchandising and promotions and taking care of customers.

"Hopefully our people are friendlier to customers, whereas employees at Tom Thumb have faced some uncertainties for a couple of years [based on long-term rumors prior to the sale last month of Randall's to KKR], as have Food Lion employees about the future of their company," Burns explained.

With local competitor Kroger based in Cincinnati and Albertson's in Boise, Idaho, "Minyard is the only hometown grocer left in the market, and that has some meaning for a lot of customers, who like to see their money stay in the Dallas and Fort Worth areas."

In terms of summer programs, Burns said Minyard isn't doing anything differently from prior years, with item selection, space allocation and media advertising are at about the same levels. He said the company's July 4 promotion "had good results -- about even with last year."

Overall, he said summer sales are "probably a tad better than a year ago, because the economy is much better than it was."

The chain has continued its five-year practice of running different sweepstakes promotions every six or seven weeks, with the summer sweepstakes -- called Summer Safari -- tying in with the Dallas Zoo, where Kimberly-Clark has contributed funds to open a chimpanzee habitat, Burns said.

Besides offering a grand prize of a $50,000 mobile home, the Summer Safari promotion offers half-price admission tickets to the zoo, plus free tickets for kids who win a coloring contest tied in with the new chimp facility.

"The zoo was very willing to work with us -- although two years ago, when we offered a free day at the zoo, more than 15,000 people showed up, and the zoo wanted to do something different," Burns said.

Nob Hill Foods, Gilroy, Calif., expects sales for summer to be up " a little bit," Lynda Trelut, vice president of advertising, told SN, "because business is better, the economy is better and consumer confidence levels are up." In addition, she said the 25-store chain returned to TV and radio advertising in April after a two-year hiatus, which has enabled it to run "an awareness campaign sprinkled with price and item, usually consumables and usually perishables during the summer."

The highlight of the chain's summer promotions has been a program called Triple Play -- a tie-in with three separate local events, which occur annually, but never on three successive weekends, as they did this year, Trelut said. The events are the California Rodeo in Salinas; the Gilroy Garlic Festival in the chain's home city; and the California International Air Show, also in Salinas.

The events were held on three successive weekends beginning in mid-July, which prompted Nob Hill to consult the organizers of each to see if they had any objections to the retailer promoting them as a package -- a process that resulted in Triple Play, a discount program on admission prices to each event ($3 off the price of rodeo tickets, $2 off the price at the other events) for up to four people per ticket, available to shoppers who purchase $25 worth of groceries.

"We're not sure what impact Triple Play will have on summer sales," Trelut said. "But it certainly gives us more leverage to do something with the three events scheduled over three successive weekends than if they had occurred on a staggered schedule -- and it gives us the opportunity to be good community citizens by supporting the events."

Because the Garlic Festival is locally based, most of the chain's merchandising attention is focused on related tie-ins, Trelut said. For example, all packages of Harris Ranch Beef -- the chain's primary beef supplier and the official beef supplier to the festival -- featured stickers promoting it.

In addition, Carr's garlic crackers, which made their debut at the festival, were featured at all Nob Hill stores; and Sweet Breath, which was declared the official breath freshener of the festival following a kiss-off involving local community leaders, was added to the stores' inventory.

On the night prior to the start of the Garlic Festival, a march through town of the Budweiser Clydesdales ended at a Nob Hill parking lot, Trelut added.

Beyond Triple Play, Nob Hill's summer programs are "fairly typical" of what the chain has done in the past, Trelut said, "though with a couple of larger stores, we're able to feature freestanding produce displays outside the produce department where space is available." In addition to seasonal specials on items like soda and chips, Nob Hill is running in-and-out promotions on barbecue items, including utensils, mitts and citronella candles (scented candles that keep bugs away), Trelut noted.

Weather has been seasonally normal, she said, "and when it's hot, people like to be outdoors or to come shop in our stores to take advantage of the air conditioning," she added.

The lingering effect of heavy winter snowfalls in the Northwest, plus wet weather since, is having an impact on summer business at Rosauers Supermarkets, Spokane, Wash., according to Bill Haraldson, executive vice president and chief operating officer of the 18-store chain. He estimated that the snow still on the ground in some parts of its operating area, plus spring floods and a rainy summer, could push sales down 4% to 5% from last summer's results.

"The Highway to the Sun [in Montana] may not yet have reopened because of snow from last winter," Haraldson told SN, "and we've had rain throughout the summer, which resulted in a lousy 4th of July.

"Even if the weather improves, we figure that people who planned to vacation in the Pacific Northwest and changed their plans aren't going to come at all this year, which will have a negative impact on sales -- maybe 4% to 5%, conservatively speaking."

The summer has not been a total disappointment for Rosauers, however, Haraldson said, pointing to the company's successful promotion of one of its Grab 'n Go Meals in mid-July. The entree, featured on the front of the chain's ads, included barbecued Longhorn ribs with a pound of macaroni, a pound of potatoes, four ears of corn and two mini-loaves of bread -- regularly priced at $17.49 -- advertised for $14.99, including a free two-liter bottle of Coca-Cola.

Haraldson said he estimated the company sold 1,000 to 1,200 of the entrees during the seven-day promotion, "which may not be a lot for a big chain, but for our company, which sells about 18,000 dinners a month, it was a very successful promotion and a big sales booster."

He said Rosauers has featured Grab 'n Go Meals in the body of its ads throughout the summer, but the mid-July promotion was the first time it got front-page ad placement. "We want to get people used to taking these meals on picnics or wherever they're headed," he explained.

While the chain uses radio and TV to supplement its print ads from September through May, it drops TV during the summer, "when very few people are watching TV, though we continue using radio to supplement print throughout the summer,"

Haraldson said. Radio spots for the prepared entree promoted the item itself and the chain's "love handle" bags -- grocery sacks with handles that Rosauers uses on a regular basis.

Haraldson said the success of the initial Grab 'n Go item may prompt the chain to feature other items later in the summer.

The space allocated to summer selling, and the items included, do not change much from year to year at Rosauers, Haraldson told SN. "We're pretty predictable," he said.

The chain kicks off its summer promotions on Memorial Day and ends them on Labor Day, when back-to-school sales take over, he said. Items promoted during the summer include corn on the cob, watermelon, T-bone steak, hamburgers, hot dogs, buns, Coleman jugs and coolers and film processing, Haraldson said.

Rosauers' has 18 stores -- 11 in Washington, three in Montana, three in Idaho and one in Oregon.

Hannaford Bros., Scarborough, Maine, is hoping to ignite sales this summer with a series of recipe cards and informational brochures targeting the backyard chef.

"We're trying to communicate to customers the best uses for our products," said company spokeswoman Susan Pierter.

Though she declined to discuss sales objectives, Pierter said the brochures have been popular with customers since they were introduced several years ago.

The brochures, which contain grilling recipes and deal with a number of topics such as low-fat cooking and food safety, are distributed in various departments, depending on the store, Pierter said.

This summer, the company is giving the brochures more of a boost, including a push in the consumer press. The information spotlights Hannaford's registered dietician, Anne Marie Davee, who offers tips on cooking and safe food handling.

"Hannaford makes it easy to create delicious meals by offering summer recipes and other cooking tips, such as our Beef Grilling Guide," said Davee in one of the company's promotional pieces. "We also offer great specials on seasonal produce, as well as cuts of meat and fish specifically for the grill to give customers a strong head start on their summer cooking projects."

Hannaford's seasonal brochures cross promote several departments, including firm fish steaks such as salmon, swordfish, tuna and shark, along with traditional beef offerings for the barbecue.

"But don't just limit your grilling to meat or fish," said the Hannaford literature, "try summer vegetables for a healthy and flavorful addition to your outdoor cooking repertoire." The company recommends bell peppers, mushrooms, green and yellow squash for the grill, and suggests olive oil or canola oil, crushed garlic and fresh herbs to add flavor.

Pierter said the weather in key markets, has been better this summer than last, which is expected to help sales. The company has not altered its regular schedule of TV or newspaper ads to specifically promote summer items, she said.

Stores in several states participate in local promotions emphasizing food products made in that state. Stores in Maine, for example, highlight maple syrups, sauces and gourmet mustards.

"Visitors like to bring back a little bit of the state they're visiting," Pierter said.