A LESS-BULKY REGIMEN

LISA SAXTON

ST. LOUIS -- Schnuck Markets here is bulking up by scaling down. The chain fully redesigned its bulk foods, establishing a more compact department that is able to offer a wider variety of products -- 400 items, in fact. And 75% of that is candy.

Since the revamping, the chain's bulk sales "are turning upwards of 10% over last year, and we're pleased with that figure," Joe Kickham, category manager, told SN.

Truth is, the new bulk merchandising layout is such a plus that Schnuck is installing it in all of its new stores and in remodeled units.

"We had a bulk food program that was a little outdated and it needed some sprucing up," said Kickham. "It had larger bins that took up a lot of room and were harder to keep clean."

Some of the changes were made for sanitation reasons, he said, while others were made to keep up with the latest bulk merchandising trends in the market.

But whatever the reasons, perhaps the biggest impact of the department makeover is what meets the eye.

The new, streamlined department features a 43-foot continuous run of compact, tiered displays. This creates a colorful wall of candy that's hard to miss or to pass up.

"The important thing about candy is it's an impulse item, especially bulk candy. And one of the traits of the department is it's visually appealing, with a cleaner, more eye-catching look," said Kickham.

"Bulk candy is important to us, even though it's still a very small percentage of total store sales. It gives us an opportunity to offer variety and it's very profitable for us."

Kickham said the majority of the bulk sales come from candy, which represents 60% of the section's sales. Whole bean coffee, pasta, nuts and spices make up the balance.

"The departments are more condensed and easier to maintain. When we had the larger bins, it was more spread out. Even though it's a smaller department, we can still offer more variety."

That's because Schnuck downsized to mostly 6-inch bins, with one row of 12-inch bins and a sprinkling of 2-inch bins to hold spices, a high-dollar item that customers usually buy in small quantities.

Using the smaller bins "helps cut down on inventory, too," Kickham noted. The new fixtures provide storage space underneath the display.

Schnuck also benefits in the labor department, said Kickham. "In the past, the product came in 30-pound bags and boxes," he explained. "But we had vendors skew it down to 5 pounds and 6 pounds. This way, it's much easier to handle and stock the bins; it's neater and enhances the quality of the product, which is the best part." The chain typically staffs the department with a manager and one or two part-timers. "During the peak hours, there's usually somebody there," he said.

For the consumer, depending on one's sweet tooth, the best part of the new Schnuck bulk candy section could be gummi worms, fruit slices, jelly beans, chocolates, candy necklaces, or any of the dozens of branded confections available.

The category manager said the top candy sellers have been Jolly Ranchers, Jelly Belly, Laffy Taffy and Go Lightly products.

Indeed, according to Kickham, branded candy has a more significant presence than before the makeover.

"Leaf would be an example," he said. "Sixlets, Chuckles, Jolly Ranchers and Whoppers are others." Schnuck also carries a variety of Jelly Belly beans, Hershey products such as Kisses and Reese's.

Another postredesign development is a more substantial selection of sugar-free products, now numbering about two dozen.

"Sugar-free is a big part of our business and a notable new product trend. It's important to consumers who are more health-conscious than they ever were. The popularity of sugar-free coincides with the growth of fat-free products."

Kickham added that he currently is considering more sugar-free products to expand the section. "Sugar-free also brings in another consumer to the department."

Actually, he said, that's another facet to the beauty of bulk candy -- it doesn't take away from regular candy sales.

"There are two different customers," said Kickham. "Some want the regular candy and others want the bulk. It is important to us because it's added sales to our stores. It's part of our total package." Bulk is treated as part of the total perishables package as well, although its sales belong to the grocery department.

"It's in the first aisle sandwiched between produce and bakery, as part of the perishable flow," said Kickham. "It's considered a perishable item because of the rotation involved."

Schnuck carefully rotates the candy, making sure the older products are at the front. Again, the new department design makes this easier to do; the bins are smaller and the size corresponds better to inventory.

"The constant challenge to bulk merchandising is carefully maintaining the rotation and keeping the department very clean. Our departments are always fresh. We want to be on the leading edge and provide something extra for our customers," said Kickham.

"The impulse appeal of the clear plastic bins helps the department sell itself," he added.

The bulk department is typically a strong presence at the front of the Schnuck units. At the Ballwin Plaza store, for example, the fixture stands just inside the entrance, at the head of the fresh aisle. Front to back, the selection ran from branded and popular candies to a sugar-free section to nuts, snacks and trail-mix items.

The department looked neat, clean, colorful and compact, with the impression of a lot of variety. The top row of the display was 12-inch bins, followed by two rows of 6-inch bins below that. There were seven bins holding chocolates, plus a bevy of branded products, some with small identifying cards or stickers on the front of the bins.

"We do not use much signage," noted Kickham, "almost nothing beyond the small descriptors and price signs on the bins. We limit signage so that you really can see the colorful product, and that is more effective than signs."

The section also contains 28 bins of coffee supplied by a local roaster named Ronnoco. "Coffee is anywhere from 20% to 25% of our bulk sales," said Kickham. "The product is roasted daily, and we know we're getting the freshest product."

Kickham said the new department plays well in all of the chain's trading areas, which primarily are middle-class and upper-middle-class communities.

"Bulk food is successful no matter what demographics we have it in," he said. "We may, however, key in on different items."

For instance, in its high-profile Ladue store, which caters to an upper-income area, low-end items such as spearmint leaves were eliminated in favor of gourmet candies and premium nuts such as whole cashews.

Still, while cashews may cost more per pound than spearmint leaves, Kickham said price is really not a factor when it comes to consumers' desires for bulk candy.

"Price is not the big issue; we remain competitive with the rest of the market. And with the convenience and flexibility of bulk, consumers can purchase the exact amount they want," he explained.

Generally, the candy is retailed in the $3 range per pound. At the Ballwin store, the highest candy ticket item was the pecan/caramel patties, which retailed for $5.99 a pound, while the lowest were the 99-cent fruit slices. The hottest item at the store is a new product -- double malted malt balls, according to Angie Smith, the Ballwin bulk department manager.

Thirty 2-inch bins of spices offer items such as garlic pepper for 35 cents an ounce; pine nuts for $1 an ounce; Cajun spice for 22 cents an ounce, and ground Italian seasoning for 68 cents an ounce.

While price is not a crucial sales builder, promotion is very important, Kickham said. "We promote at least one bulk item weekly -- usually a strong seller -- in the direct-mail circular."

An endcap on the bulk aisle held bags of gummi bears and worms that were on special that week. "We always prebag a quantity of the ad items," Kickham explained.

"In addition, we are going to look more closely at prebagged merchandising as another option for consumers and us. We will be testing the waters with shippers of products such as banana chips, peanut logs and licorice to see if sales would warrant doing more extensive prebagging."