BUCKING THE SELL-THROUGH STATISTICS

AMITY K. MOORE

Even with a paucity of blockbuster titles in the fourth quarter, supermarket retailers polled by SN reported their holiday sell-through sales on par with previous seasons, with no dramatic drop as national figures released by industry researchers showed.

The strategy for most involved bringing in more diverse titles to compensate for the lack of a movie comparable to "Titanic" or any Disney titles like "Lion King II."

Alexander & Associates, New York, reported that fourth-quarter unit sales of VHS tapes were down 25.8% in 1999 to 141.4 million units from 190.5 million units in 1998. This was mostly due to a lack of a blockbuster title to compensate for 1998's "Titanic" and a lack of strong children's titles, said Greg Durkin, research director.

Despite these statistics, supermarkets contacted by SN apparently were able to hold their own. "Overall, supermarkets have reported strong video sales that are close to last year. It's because of the greater number of titles that they're selling," said Bill Bryant, vice president of sales, grocery and drug at Ingram Entertainment, La Vergne, Tenn.

Among the more popular ones were New Line Home Video's "Matrix," Buena Vista's "Inspector Gadget," Columbia Picture's "Big Daddy," Artisan's "Blair Witch Project," Dreamworks' "Saving Private Ryan" (Collector's Edition), Warner Bros.' "Austin Powers: The Spy Who Shagged Me," and Warner Bros' "Wild, Wild West."

For B&R Stores, Lincoln, Neb., "Wizard of Oz," "Big Daddy," "Inspector Gadget," and "Winnie the Pooh: Seasons of Giving," have been selling well, according to video buyer/coordinator Bob Gettner.

"In comparison to last year, our numbers are pretty close to even. This actually is good considering 1999 was not a terrific year in video for us. This year's sell-through has been pretty good, although I really think that if Disney had put out 'Tarzan' in December, the sales would have been through the roof," Gettner added.

"We're doing better in most locations. Sales are up on sell-through," added Mandy Budreau, video buyer at Hastings, Mich.-based G&R Felpausch Co. "It's not something we've really done before, so we're doing more promotions," she said.

In pre-Christmas store checks in Missoula, Mont., where Albertson's, Smith's, Safeway and Rosauers do business, SN noted shipper displays of the aforementioned titles, plus several that went direct to video. Most of the DTV movies tended to be for children or families, many from Disney, such as the studio's re-release of "Pinocchio" and first-time launches of "Mickey's Once Upon a Christmas" and "Winnie-the-Pooh: Seasons of Giving." Fox went straight to video with "Bartok the Magnificent." Other studios, such as Warner, took "Jack Frost" and "Iron Giant" from the theaters, as did Buena Vista with "I'll Be Home for Christmas."

Of the chains that SN visited, Smith's had the most copies and greatest variety of top-hit titles. Indeed, upon entering the store shoppers were immediately confronted with shippers of sell-through. The shippers stood adjacent to the store's rental section, which was racked on a front-end wall.

Rosauers, Albertson's and Safeway competed with Smith's prices. Overall, prices ranged from $9.99 on Disney's "I'll Be Home for Christmas" and "Mickey's Once Upon a Christmas" at Albertson's to $22.98 on "Blair Witch" at Rosauers.

Bill Glaseman, video specialist at Bashas' Markets, Chandler, Ariz., echoed what other retailers said. "The real strong titles sell well -- 'Blair Witch,' 'Matrix' and 'The Mummy.' [Our movement] seems to be fairly steady, although 'Teletubbies' is not going well," he noted.

While sell-through appeared to be holding its own this quarter, rental was not following a parallel path, supermarket retailers reported.

"Our video is down over last year," said Renee Clay Thomas, video supervisor at Town & Country Stores, Hardy, Ark. "We don't have much competition; I think it's because more people are buying those small satellite dishes," she explained.

Bashas' Glaseman agreed, saying "Rental has been trending down. The Blockbuster problem is making itself felt at rental because of depth of copy. Other items such as games and computer activity are taking time away from viewing movies."

Having enough rental copies is one of the areas where supermarket video departments feel the sting from large-format competitors, although supermarkets benefit from the one-stop-shopping concept.

"The ease of having video right in the same store the customer already shops [influences video activity]. The hardest thing is to compete with the copy depth that the major video chains can provide," added B&R's Gettner.

Some of his store's better renters during the fourth quarter were "October Sky," "The Mummy," "Big Daddy" and "Deep End of the Ocean."

Independent films have steadily been increasing in circulation, both in theaters and at rental. "The biggest change for supermarket video-rental departments this year vs. last year is that supermarkets have been buying more non-theatrical, lower box-office independent-producer movies to complement their purchases of major releases," said Robert Feinstein, president of Supermarket Video, Los Angeles. His company represents more than 500 supermarkets' video-rental departments.

"Independent product is not as time sensitive as most of the major titles, and good movies will continue renting over a long period of time. Supermarkets will always buy the major titles because that is what drives customers into their stores. They also know they can serve more customers, and gain additional revenues by stocking some of the better-made independent movies," he added.

Looking toward the first quarter of 2000, Town & Country's Thomas expected the video releases of "Runaway Bride," "The Thomas Crown Affair," "Bowfinger" and "Tarzan" to be her top sellers and rentals.

Traditionally, sell-through and rental sales pick up during the last quarter as a result of the holiday season. Similarly, digital video disks were expected to generate more profits that season. On its store tour, SN noted that Albertson's had a freestanding display of only DVD titles. Shoppers benefited from a savings of $6.99 off the regular price of $34.98 on such recent successes as "Notting Hill," "Austin Powers" (the first movie), "The Wedding Singer," "Pleasantville" and "Saving Private Ryan."

"Most DVD releases are 'day and date'. That makes them more attractive because you can get it the same day as VHS," Ingram's Bryant said.

With the number of DVD [players] being given away as Christmas gifts, Bryant said he believes there will be a great opportunity for supermarkets to carry sell-through and eventually sell DVD on a regular basis at a dedicated in-line section.

"Still in its infancy, DVD is growing much faster than the compact disc did in the music industry. As a result, we see a tremendous opportunity for supermarkets to capitalize on people who just received DVD players," Bryant added.

Bashas' Glaseman noted that his stores are carrying some DVD titles, which they expected to sell after the holiday season.

"They're coming on extremely strong," he said.

In Nebraska, Gettner said, the prices of DVD machines are decreasing. As a result, more consumers will be able to purchase them.

"The games and DVD have done very well this year and seem to still be gaining steam," he said.

However, DVD is slower to take off in secondary markets. Thomas of Town & Country said her stores rent both the DVD titles and the machines, but they don't move very well.

"We have DVD and players for rent; it doesn't seem to do well here in rural Arkansas. Usually [the trend] starts in California and comes this way," she said.