AMERICAN STORES IMPROVES FRONT-END MANAGEMENT

NANCY BRUMBACK

CHICAGO (FNS) -- In the wake of a study of front-end checkstand merchandising, American Stores has revised its merchandise assortment in that area, improved management and begun looking for more flexible fixtures.

Keith Aldridge, national product manager for American, outlined the actions the company is taking following a front-end study that included the company's Jewel and Lucky stores among six study participants. He spoke at a seminar on maximizing impulse purchases during the recent All Candy Expo here.

The study, co-sponsored by M&M/Mars and Time Distribution Services, a division of Time Warner Inc., found that front-end purchases account for 1.1% of a store's total sales on average, and 1.5% of profits. "The front end should be managed as a department in the store," said Steve Collins, vice president of customer development for M&M/Mars.

Ray Jones, managing director of Dechert-Hampe & Co., the consulting firm that conducted the study, indicated retailers are often unaware of the percentage of sales made at the front end. "The key to performance is optimizing the major categories already at the checkstand" rather than adding additional products, he said. The criteria for products displayed at the checkstand should include purchase frequency, impulse buying, positive image, high sales volume and high profit potential, said Jones.

Top-performing stores do 98% of their checkstand sales in candy, magazines and soft drinks, compared with 78% for stores with average sales, he said. Jones suggested replacing such products as books, videos, film and razor blades with those higher-impulse products.

In light of these and other findings, Aldridge said American Stores chains "found the most opportunity by maximizing the major categories rather than adding new ones."

The company's immediate actions have been to recognize the importance of front-end merchandising, revise the product assortment and improve store compliance with plano-grams, he said.

The stores are moving to display candy in every checkstand lane and shift soft-drink coolers to the express lanes. Store demoraphics will determine front-end product assortment, in light of the study's finding that checkstand purchases are greater in stores serving less affluent, younger families with children.

Over the long term, said Aldridge, the American Stores chains will streamline their processes for front-end orders.