AN OPEN BOOK

DAN ALAIMO

Retailers are hitting the books with reportedly good results.

Mass market paperbacks and hardcovers, as well as "backlist" older titles, children's books, bargain assortments and specialty items aimed at the natural and organic market are providing supermarkets with plenty of black ink, nonfood executives told SN.

Generally viewed as the other half of one category that also includes magazines, books provide added promotional opportunities as new titles are released first in hardcover and later in paperback, as well as special value-priced in-and-outs, continuities and cross-merchandising throughout the store. Since the category is usually serviced on a direct-store-delivery basis along with magazines, it's also a relatively easy one for retailers to manage.

"I see continual growth in books for us," said Jack Serota, vice president, general merchandise/health and beauty care, Price Chopper Supermarkets, Schenectady, N.Y. "It's a strong category and I really don't know if anybody knows where the top is in grocery. I think we're only scratching the surface.

"I look at reading material the way grocery would look at bags of potato chips. Once you've eaten that bag of chips, you want more, you've got to get another one. Once you've read a book, if you want to read again, you've got to go get another one," but that calls for constantly changing the mix.

"You have to be competitively priced, and you have to have a good selection available to your customer," he said.

While books and magazines have been a very good category for Winn-Dixie Stores, Jacksonville, Fla., the retailer is probably going to put more emphasis on books in the future, said Dewayne Rabon, vice president of GM, HBC procurement/sales.

Books, he said, are "like DVD releases. You need to stay current. You need to make sure you have the titles that are hot at that time."

"The key to books, as in DVDs or anything else that's trendy and fashionable, you have to have the right titles at the right time," said Jan Winn, director of HBC and general merchandise, Big Y Foods, Springfield, Mass. Big Y dedicates 20-28 feet to books and discounts hardcovers 30% and paperbacks 10%, she said.

While books provide an incremental opportunity for sales, supermarket retailers are sometimes challenged in getting all the copies they need of hot titles, said a nonfood executive with a Southeastern retailer. Suppliers tend to favor big booksellers, the executive said.

"The book category is all about display and letting the customer know you have them, but if you can't do that consistently and effectively, you won't have the best sales," the executive said.

Besides procuring the books, getting the in-store space to display them also is an issue. "We don't have discretionary space and flat tables and the like, so we have to be very creative in giving stores vehicles to merchandise books," he said. The retailer also plans to offer 25%-off hardbacks and to do a book-of-the-month promotion, "so we let the customers know that their neighborhood supermarket is a place to go to get books."

PAPERBACK MARGINS

With an aggressive approach to merchandising, paperbacks can deliver a good profit margin, said Larry Schimpf, director of HBC/nonfoods, Clemens Family Markets, Kulpsville, Pa., which gives the books 8-16 feet, and monthly promotion in its circular. Sometimes release dates make it difficult to schedule ads, but "it's easy money. It's serviced, it's guaranteed, it's a great category," he said. "It's a no-brainer. Optimally, I'd love to have 20 or 24 feet for paperbacks and get into the hardback book business."

Aside from promotions, Clemens does not discount the books, relying instead on impulse purchases. When displaying an advertised title from an author like Nora Roberts, the retailer will feature the current release, but devote a portion of the display piece to non-discounted older titles from the same author.

With space at a premium, cross-merchandising of books does not get much emphasis at Clemens. "You're going to sell a lot more Nora Roberts than a barbecue cookbook. So if you've got to make a choice based on space, you go with the one that turns the most," Schimpf said.

"For the supermarket, paperbacks will always be a staple of our business," said Larry Ishii, general manager, GM/HBC, Unified Western Grocers, Commerce, Calif. Best sellers are an important part of the offering, as are the older titles known as the "backlist," he said.

"The paperback category has changed dramatically over the years for our food retailers, but it's still one of those basic categories that generates a lot of incremental sales and bottom-line profits," Ishii said. Hardcover books also can be a good opportunity for many grocery retailers depending on the shopper base and the level of presentation. "If you are able to merchandise them properly, either through a reading center-type concept or a fixturing on an endcap, [with] the right retail pricing, the hardcover business can be very good, driven by certain specialty needs as well as the best sellers."

Books also offer the opportunity to tie in with other food categories and seasonal selling, Ishii said. The natural and organic trend in particular can benefit from the positioning of related books near the food products, he noted.

PROMOTION IS KEY

"We do very well with books," said Nate Acheson, GM/HBC buyer-merchandiser, Rosauers Supermarkets, Spokane, Wash. Rosauers is seeing growth in paperbacks and hardcover, but he noted that promotion is key to the category.

"You can't just do it all as destination, you've got to get some off-shelf displays, and we do that and we promote them," he said. The retailer has a book-of-the-month promotion that it runs in its print ad just to keep the attention on that category, Acheson said.

While Rosauers will discount promoted books 20% or more, most stores do not discount on a regular basis, relying more on impulse purchases, he said.

"We continually promote books; continually have some presence in that area, so people know that we are a destination for that form of entertainment," said a nonfood executive with a California chain. The retailer has 8 feet dedicated to paperbacks in most stores, usually adjacent to magazines.

The retailer will promote one brand of paperback books each month at 25% off "to keep people shopping in that location," the executive said. "[In addition,] two or three times a year we will do a bargain book assortment, and that generates a lot of volume.

"Books are constantly changing and are a source of interest to our shoppers. They could get snowblind by coming in and seeing the same product on the shelf day after day, but with books and magazines, it is constantly changing landscape. So it attracts their attention and it's an immediate point of interruption if they have some interest in topics and titles."

"We've done a good job in books. We've expanded the category in some of our stores," said Doug Barnett, director, GM/HBC, Brookshire Brothers, Lufkin, Texas. While Brookshire does not do much with hardcovers beyond bringing in the top titles, "we sold more paperback books last year than we have in quite awhile," he said.

"I don't see books going away, even with the Internet, television and everything else that the customer has. You still have those customers who want to sit down and read a book."

"I think most people let the magazines and the books drive themselves" by using a combination of in-line and checkstand merchandising, said Charles Yahn, vice president, merchandising, Associated Wholesalers, Robesonia, Pa. For new hot titles, retailers will bring in multiple copies and promote them, "but you've got to get in and get it out."

Reading a Bargain

Value-priced book programs are driving traffic, sales and profits for many supermarkets.

Deeply discounted closeout book programs have been "performing phenomenally" for Penn Traffic Co., Syracuse, N.Y., said Mike O'Shell, director, GM/HBC. Among these programs are those with older titles and children's continuities. "Out of all the continuity programs, we've had the most success with those programs," O'Shell said.

The key to the category is having something for everyone, from the top best sellers to children's titles, he said. Besides promotional books, Penn Traffic has a regular in-line section in most stores of 4-16 feet, including paperbacks and hardcover, and it discounts the hardcover books in select markets, O'Shell said.

For the retailer customers of Valu Merchandisers Co., Kansas City, Mo., most of the book business is handled directly with magazine suppliers. However, Valu provides in-and-out promotions on value-priced books, children's titles and scrapbooking continuities, said Bill Dunkle, category manager, general merchandise.

The value-priced books "do real well," he said. "We put those out in those dump bins, and blow them out, put another one in the next quarter. They include all kinds of books: hardback, paperbacks, children's, almost anything."

W. Lee Flowers & Co., Lake City, S.C., is expanding an in-and-out children's book program that did very well in a test store to 25 corporate stores in December, said Sammy Snell, director, HBC/GM. Starting with 300 books, the main part of the promotion ran for four weeks, then two more weeks with the product marked down 50%, and then a seventh week was scheduled at 75% off, but the store had sold 280 of the books at an average price of $4.99 by the end of the fifth week, he said.

"That's a promotion I would do probably two to three times a year," Snell said.

Natural Selection

Natural products and maintaining its image as a health-conscious retailer means a specialized book program for Wild Oats Markets, Boulder, Colo.

Wild Oats has book sections ranging from 8 to 16 feet, said Karen Schroeder, national category manager, mercantile, with titles relating to the retailer's position as a supermarket in the natural and organic marketplace. These include cooking, women's and men's health, books on alternative medicine, and "anything that pertains to holistic living for children and adults," she said.

"You're not going to find mainstream books in our assortment," added Stephen Davis, the retailer's vice president of holistic health. The book selection "revolves around what we're all about, what our mission is, and that is good health, healthful lifestyles."

While Wild Oats carries many books on an ongoing basis, it will also promote hot new titles as in-and-outs, Schroeder said. "If it's a trendy book, then we will have a shipper and we merchandise it as it makes sense in the different departments." For example, one was recently cross-merchandised with the breakfast cereals, "but most of them are contained within the holistic health department."

With the chain's specific expertise, it carries many reference books, for instance on vitamins, and those will even be used by employees who are trying to help customers, Schroeder said.

Books and video are about 35% to 40% of Wild Oats' total general merchandise sales, Davis said. "So it's big business for us and a business that we're going to be in for a long time. It's an ever-changing business where we are constantly updating the mix; if there's anything new, we bring in right away. The books stay fresh because it's also a service program, we stay with the top 100 books in any given time throughout the year." The supplier is Newmark Media, Addison, Ill.