DEDICATED REVENUES

LAURA KLEPACKI

Big payoffs can be gained in dedicating space to seasonal selling.

Many supermarket retailers are finding that the use of seasonal promotions centered on general merchandise can help lure grocery-shopping-weary consumers by offering them something fresh almost every time they visit. They also say it can lift total store sales through themed tie-ins and cross merchandising.

And creating a dedicated seasonal general merchandise section can be lucrative. According to the Allen Levis Organization, Northfield, Ill., sales per linear foot in a typical in-line general merchandise section average $27, while a seasonal section, on average, delivers $36 per linear foot. Figures are based on sales in combination stores averaging 45,000 to 55,000 square feet.

"Seasonal merchandising can deliver incredible results," said Ellen Gussin, vice president of Allen Levis, which has been conducting a series of studies on seasonal merchandising for the General Merchandise Distributors Council, Colorado Springs, Colo.

The organization will deliver a second report focusing on event planning for the back to school, Halloween and Valentine's Day seasons during its annual GM Marketing Conference in Monterey, Calif., commencing later this week.

"Our biggest recommendation, space permitting, is that even in a conventional format store [30,000 to 35,000 square feet] retailers dedicate at least part of a gondola, at least something, to get their consumers used to dedicated space with a year-round calendar of promotional events," said Gussin. "The promotions can bring excitement and newness for supermarket shoppers who are always looking to do one-stop shopping."

Many retailers agree.

"There is more emphasis on seasonal now," said Hershel Woods, grocery/general merchandise buyer for Food Folks, Lumberton, N.C. "The consumer is looking for more of these types of items and everything is related to convenience.

"And the goal of our seasonal department is to increase gross profit, but also to generate excitement in the stores."

The chain's stores average 25,000 square feet, and each devotes some lobby space for seasonal displays. It is an area in which the retailer must be attuned to trends, he said.

"In seasonal items, we do try to do something different. And you need to know what is popular," said Woods, "this year [for Christmas] it is Beanie Babies."

Rick Channel, merchandise manager of general merchandise/health and beauty care for Riser Foods, Bedford Heights, Ohio, said the company's stores currently do not have space dedicated for seasonal merchandise, "but we are working on it because you really need that."

"Seasonal in and of itself accounts for a lot of sales for overall general merchandise business because you have such impulse business for seasonal," said Channel. "Many grocery companies today are finding that there are sales to be had and money to be made in that area."

A top seasonal opportunity for retailers continues to be Christmas, driven by sales of gift wrap, cards and gifts. But other seasons have been gaining momentum -- including Halloween, back to school and spring/summer seasonal items.

One Midwest retailer/wholesaler said that while still very important, Christmas is no longer its biggest seasonal event. "At least here, Halloween is growing and back to school is the biggest," said the buyer who asked not to be named. "We try to convince all the stores to get front-end space for seasonal. It is tough real estate to get, but once acquired, they are able to hang onto it -- which proves it is performing.

"We do place a lot of emphasis on seasonal to try to capture the incremental sales of the season," he said. "We are increasing our efforts by way of offering a greater variety. We are trying to show that [supermarket format] is a player."

At Raley's Supermarkets, West Sacramento, Calif., Christmas is the best season when it comes to short-term promotions (it is given five weeks). But when considering a longer period, the spring and summer event, which runs for 12 weeks, does even better, said Dan Black, managing buyer for the chain.

What drives Raley's Christmas sales are the light sets and gift wrap. "Those are the major hitters," said Black. While for spring/summer, "it is the suntan products, beach chairs, inflatables and things like that."

But the smaller holidays throughout the year -- Mother's Day, Valentine's Day, graduation, and others -- "are all important."

"They have all been growing for the last 10 years, and you try to put programs together to suit each one." Halloween is the most flexible, Black said.

"The success of it will depend on which day of the week it falls on. This year, it is on the weekend, so it will mean more parties."

Most Raley's stores do have a seasonal aisle. "But we also have endcaps that we use, and then we encourage bakery and deli to tie-in items that make sense," said Black.

"It is all done to maximize sales, so we offer the party favors and the foods," said Black.

And to get customers in the spirit, Raley's uses decoration kits to adorn the stores for the different seasons.

But there is a holiday, offering multiple tie-ins and cross-merchandising opportunities, that at least one general merchandise distributor believes supermarkets underplay -- Thanksgiving.

"The season that supermarkets need to take a little harder look at is Thanksgiving -- for decorative things," said Frank Kruse, general merchandise category manager for Millbrook Distribution Services, Leicester, Mass. Kruse, who has a background in the party store business, said it is a growing area in that trade and it could be for supermarkets, as well.

"Table covers, outdoor banners, napkins -- all items that augment Thanksgiving -- along with the traditional items such as foilware, can work very well," said Kruse.

"The party business doesn't have the expertise to get into convenience foods, but what better place than a supermarket to take advantage of the season? It is just a matter of committing to it," added Kruse.

Meanwhile, according to several industry experts, consumers are now looking for more quality items, and they are willing to pay for it. As one wholesaler said, "Junk is out!"

"Consumers are getting to be much better shoppers and a lot smarter," said Charles Yahn, vice president of the general merchandise division of Associated Wholesalers, Robesonia, Pa. "Products will be a little more upscale than you are used to seeing in supermarkets."

"Five years ago, retailing something for $30 in a food store -- you'd be afraid to try it," said Young. "I think we are finding more and more stores are accepting major credit cards and those items are selling," said Young. Some examples include picnic coolers with college and sports logos, and more expensive Christmas gifts -- particularly toys.