APS SALES DEVELOPMENT PICTURED IN 4TH QUARTER

PETER MALBIN

The rollout of the Advanced Photo System, a new photographic system introduced earlier this year, has been slow, say supermarket retailers. But they expect that to change by the fourth quarter.

Kodak's major advertising blitz during the just-completed Atlanta Olympic Games may be the shot in the arm that retailers say they need to spur sales and consumer familiarity with the system. "At the moment, if you asked the average consumer, they won't be too aware of APS," said Mike Caligiuri, assistant vice president of general merchandise at Hy-Vee, West Des Moines, Iowa.

"We have brochures and signage up to say we offer the processing service. We have the film displayed -- there is some awareness in our stores. But sales have been minimal so far," he said.

Gerland's Food Fair, Houston, and Cub Foods, Lithia Springs, Ga., say consumer demand for APS is not yet strong, Consequently, they do not carry APS products.

Besides Kodak, rival Fuji, as well as Nikon, Minolta and Canon, are manufacturing APS. The new technology requires consumers to buy new advanced cameras, some priced up to $199. Film and processing will cost about 15% more than traditional 35mm film. And film processors have to upgrade their equipment as well.

There have been major food accounts that have not traditionally participated in the camera segment, like Kroger and A&P, that are selling cameras for the first time, according to industry sources.

Other accounts that normally sell cameras, like Wegmans, Publix and H.E. Butt, are having difficulty keeping cameras in stock, said the sources. These chains declined to comment.

Getting an adequate supply of cameras is another hurdle. Many supermarket retailers confirmed that they couldn't get a sufficient amount of cameras in stock. The industry attributes part of the shortage to the demand for the APS in Europe and Japan.

Jitney Jungle Stores, Jackson, Miss., began distributing film to all its stores in late July. But no cameras were available for distribution at press time, said Al Booth, director of general merchandise for Jitney Jungle.

"I don't expect the film to sell until we get cameras," noted Kit MacMillan, category manager for Associated Food Stores, Salt Lake City.

"The whole process starts with the cameras," agreed Caligiuri. "Without the cameras in people's hands, the whole process has been set back." Caligiuri said he was supposed to get cameras by April but was told that cameras would be delayed until July because of a production problem." There has been some consumer confusion with the APS film also. Gary Schloss, vice president of general merchandise at Carr Gottstein Foods, Anchorage, Alaska, explained. "The film is so new that people tend to buy the new film thinking it is the old film for their old cameras. They bring it back and have to exchange it for the correct film. Hopefully, the packaging will explain it [better] over time," he said.

To correct this situation, Carr Gottstein is merchandising the new APS film behind the counter, which is forcing the customer to ask for the new film, said Schloss. Service people at Carr Gottstein Foods' photo department also have been explaining the new system to customers.

Though some are having difficulty obtaining cameras, the film is in good supply, retailers said.

"People are coming back for more. They like the fact the product gives you three different sizes of pictures to choose from [4 by 6 inches, 4 by 7 inches and 4 by 10 inches]. That's the main advantage -- the size format. It's a heck of a deal," said Schloss.

Kodak film and cameras arrived in mid-July at Food Town Plus stores in Ohio and Michigan, said Bill West, general merchandise director at Seaway Food Town, Maumee, Ohio. "We think it's going to take off rather slowly. A lot of people are going to wait until they need to buy a new camera or give one as a gift. Certainly, you are not going to sell much film until people get the cameras in their hands," he added.

But another retailer sees it differently.

"Traditional supermarkets sell a lot of film without selling cameras," pointed out Richard Sizemore, nonfood merchandiser at Pay Less Supermarkets, Anderson, Ind. "Cameras are sold by mass merchandisers and specialty shops."

Pay Less currently carries only Kodak APS film, but eventually may stock other brands, even private label. "We elected to bring Kodak cameras in for back-to-school in September and for the holidays," Sizemore added. Mike Kilgallon, grocery buyer at Genuardi's, Norristown, Pa., predicted it would take another six months before the product starts moving. "There is enough literature for the trade, but not for the consumer," he said. "I'd like to see more product information in the store, more header cards and posters."

Another retailer, Joe Kolavo, nonfood buyer at Strack & Van Till Supermarkets, Highland, Ind., said Kodak supplied his stores with adequate point-of-sales materials, including signs, shelf talkers, header cards and window banners.

When consumers' awareness heightens, retailers predict, the system will be successful.

"They [APS products] are not that much more expensive," commented Schloss.

"The quality is pretty top notch," added Caligiuri of Hy-Vee. "Sales will expand at a fairly decent margin," he predicted.