APPLE TURNOVER

TONY SPLEEN

ACTON, Mass. -- Apples, especially in high season, can practically sell themselves. So why go crazy trying to promote them?

Joe Lettery, known in the industry as the "world's greatest apple display man," is the one to ask.

"Because it's easy and it's profitable," says Lettery, produce merchandiser at Triple A Supermarkets here, who has built his department's image around apple promotions.

During his 15-year career at Triple A, a two-store independent in this upper-income suburb of Boston, Lettery has earned numerous awards for his unique, sales-generating promotions.

He's a five-time winner of the industry's National Apple Month award for displays and advertising, sponsored by the International Apple Institute, Reston, Va. For the last two years his apple promotions also earned him the National Grocers Association's annual award for outstanding produce promotions. And he's been voted "most valuable player" by the Washington Apple Commission for his efforts in promoting its products.

SN recently spoke with Lettery about his approach to sales. He said he puts so much effort behind promoting apples because they generate the highest profits in his department. He said he is in a position to push for those profits, thanks to commitment from senior management.

"I am the voice of produce in our company," he said. "To move the most product and make the most money, you need to have leeway at the store level."

According to Lettery, his gross profits generally run around 45% when apples are selling at regular price, 30% when they are on ad. That's after shrink, which is less than 3% -- far lower than most other produce items, he said.

"With greens and some value-added salads, you're looking at shrink of about 25%," he said. "I know some people don't want to admit that, but it's true. With apples, you can get a great return. You're not going to lose much."

He declined to say exactly how many apples he moves through his two produce departments, which are both smaller than 2,500 square feet. He did say, however, that he figures sales volume "is double that of other comparable supermarkets."

Thanks in part to apples, overall department display space has doubled in the last 15 years. And produce now represents 12% of total store sales in one unit and 15% in the other, up from 5% 15 years ago.

Lettery said his strategies can work for a small independent or a chain. "In a large chain you'd need to work closely with your merchandisers and provide them with the right information so they can implement plans at the store level," he said.

So what's the secret?

"I promote only the best," he said. "Even our tote bags have U.S. Fancy Grade apples. It might be a smaller size than what we sell bulk, but it's the best we can buy."

With improved technology and controlled atmosphere storage, growers are maintaining excellent quality apples throughout the year, Lettery said. As a result, he said, retailers have no excuse for selling poor quality, mealy apples.

"The quality of apples is far superior to what it was 10 or 15 years ago,"he said. "They are firmer, crisper, better."

That's why Lettery treats apples as a year-round category, unlike some retailers, who cut back on apple display space and promotions in the summer. Lettery said such a move not only results in a drop in sales but also a loss in consumer interest in apples.

"I allocate almost the same space year-round," he said. "I always have at least 24 feet of bulk apples."

Jim Thomas, a spokesman for the Washington Apple Commission, Wenatchee, Wash., said the year-round approach to marketing apples has helped fuel Tripe A's success with the category. "Apples for a long time have been relegated to fall promotions," Thomas said. "Joe has been on the cutting edge of helping to change that."

While Lettery promotes apples all year, he gives them an even bigger push during the peak season, which is now just getting started and runs until.

"We basically stick with the bread-and-butter apples: Goldens, Grannies, Red Delicious and some of our local apples like Paula Reds, Courtlands, McIntosh or Romes," he said.

"These are really the big sellers. If you don't concentrate on your big sellers, you're not going to reach your maximum in sales."

He said he experiments with lesser-known varieties, but doesn't allow them to encroach on the space allocated for his most popular items.

"It's all right to have novelty items, don't get me wrong," he said. "They are coming in stronger and stronger, and we do have them. They're good, but they're tough for customers to identify.

"One of the things I like to do with them is put them on the salad bar in a fruit basket and price them at 50 cents apiece with a sticker gun. Then put a fancy sign on them that says, 'Try me, I'm new.' "

He said he tried this when he introduced Galas. "When somebody bought a salad, they also picked up an apple," he said. "It's a great way to introduce a new product."

Lettery said he runs regular and consistent promotions. "Apples are our biggest ad item in the produce department," he said.

Apples are usually on ad at least 40 weeks a year, he said. In July and August, he cuts back apple promotions and devotes most ad space to summer fruits and vegetables.

Apples are typically featured on the back page of Triple A's six-page, direct-mail flier, which is sent to 30,000 customers.

Lettery said his most successful promotions have themes or are tied in with holidays. He said retailers don't have to wait for the major holidays to run produce promotions.

One of his most successful promotions is one he has run on St. Patrick's Day for the last five years. He builds a huge display of Granny Smith apples and features them in his ad circular. He dresses up in green clothes and gives out samples of the apples as well as free apple cutters.

He said Granny Smith apple sales consistently run five times higher than normal during the promotion.

He features Red and Golden Delicious apples on Valentine's Day under a banner that reads, "Love at First Bite."

Some of his other promotions include Halloween costume contests for customers; Western roundup days, in which customers who wear Western garb get a free tote bag of apples, and free pony rides in the store parking lot for kids with any apple purchase.

Creating excitement is key, he said. The promotion needs to generate enough interest to get customers to stop and pay attention.

"I have a lot of fun with the promotions," he said. "And customers love it. That's the difference with our store. It's a little more fun to shop in our produce department than it is down the street," Lettery, a man with a seeming passion for apple merchandising, added with a proud note in his voice.

Promotions need to be easy to execute, he said.

Whenever possible, Triple A has product giveaways instead of price reductions as a way to save work and time. For example, each month he gives away a 3-pound tote bag of apples with the purchase of another bag at regular price.

"I don't drop the price," he said, "because it eliminates the need to do price changes in the cash register or change prices on the product. You're also not stuck Monday morning with a bunch of product that needs to be restickered with the regular price."

Although such a promotion generates only about a 10% gross margin, Lettery said it really helps move the product. Sales of tote bags typically quadruple during the promotion, he said.

As for displays, Lettery likes them big. "You're not going to impress anybody with small displays these days," he said.

His bulk displays typically include product piled high with case extensions so the apples can "waterfall" out into the aisle. Products on promotion often are featured on the endcaps, where Lettery can construct big, elaborate displays.

Although constructing the displays is labor-intensive, Lettery takes steps to keep it simple.

He repeats many of his promotions year after year, for example, and reuses many of his display props, which he keeps in storage when not in use.

"I alter the displays a little bit each year," he said. "But they have a tried and proven track record with me. They've worked every year."

Lettery also keeps the major displays up for a month or two, rather than replacing them weekly.

"You don't have to tear them down right away," he said. "You can just keep adding to them. The trick of a good display is how good the sales are the second, third, fourth and fifth week of the promotion."

The displays are kept full at all times, he said. "It's the image you want to project to your customer." To keep labor costs down and displays continuously replenished, Lettery has started buying apples already in tote bags, rather than filling bags at store level. He said the new practice has saved him about 20 hours a week in labor.

"We used to get apples delivered to us in big bins and we'd tote them up ourselves," he said. "Now that's a thing of the past. We have the supplier tote them up for us. Not only do we save in labor, but when we open the doors in the morning, we can have full displays because the product is prepared ahead of time."

He said the most successful displays generate repeat sales even after the display is torn down. For example, he built a display in 1986 to promote Golden Delicious apples, which at the time were the slowest moving variety in his department. The display consisted of a golden archway extended over the produce aisle above a massive display of Golden Delicious apples. He also placed in the department life-sized cardboard models of movie stars like Marilyn Monroe and James Dean to give the Golden Delicious apple a "celebrity image." His ad promoted the display with a headline that read, "Come see Joe under the golden arch."

"It was probably our most successful promotion," said Lettery, who appears to have no trouble donning costumes and interacting with customers. "We sold about 300 cases of Golden Delicious apples that month. My customers still talk about it, even though it was eight years ago."

He credits the promotion with making Golden Delicious one of his top-selling varieties today. He said he currently sells about 50 cases per week.