DISCONTINUITY

DAN ALAIMO

Will continuities continue?

Most retailers interviewed by SN agree strongly that they will, although they will take different forms in the future.

It's a cyclical business that has been down lately, the retailers said, and many noted that it's about time for a rebound. Some have maintained an ongoing commitment to continuities, while others have cut back.

All agree that continuities have changed, and more new ideas are needed to keep the nonfood promotional concept fresh for shoppers.

"Continuities need a breath of fresh air," said Sammy Snell, director, HBC/GM, W. Lee Flowers, Lake City, S.C., which has been offering more in-and-out promotions lately. "We need to expand beyond the basic china programs to some different categories."

The range of opinions on the state of continuities varies widely. For example, Jack Serota, vice president, GM/HBC, Price Chopper Supermarkets, Schenectady, N.Y., said: "Continuities are still a strong part of our business."

But others, like Al Jones, senior vice president, procurement and marketing, Imperial Distributors, Auburn, Mass., commented: "In my opinion, continuities will be going away. They'll be transforming" into shorter in-and-out promotions with a lower cost structure.

Continuities have been around so long that, while everyone knows them by sight, not all in the industry are familiar with the term. It refers to a promotional program with an elaborate corrugated display, which is typically placed on a front endcap, with different products in a line being introduced each week. The first item is usually sold at a very low price, with subsequent offerings sold at higher but still promotional price points.

While the products have traditionally included dishware, cookware and children's books, newer programs have included baskets, apparel and other soft goods sold at significantly higher prices than traditional continuities. Many suppliers, in part driven by import factors and other cost-related issues, are offering fewer continuities and more in-and-out programs displaying all products at once.

MORE IN-AND-OUTS

Megaware of California, Camarillo, is one supplier that is going this route. "We have modified our traditional continuity programs into in-and-out promotions and that has been very successful," said Kimberly Batarse, executive director.

VAM Corp., Southboro, Mass., is still offering continuities, but different kinds, such as apparel and women's bags and purses. "Continuities are back," said John Tucker, president of VAM and a former supermarket nonfood executive. "But they are back in new and different varieties. There's still a demand for the old pots and pans, but they've become boring to the consumer; they've seen it too much."

Continuities are cyclical, said Mike Lumadue, director of HBC and GM, Weis Markets, Sunbury, Pa. "They're off, they're on. They're hot, they're not. But I think people are coming back to continuities."

A nonfood executive with a Texas retailer used almost the same words to describe the sales of continuities. "I've seen it before over the years. They get hot, they go away. They come back, they get hot."

Price Chopper has enjoyed success with traditional continuities as well as the in-and-out promotions, Serota said. "We've run continuities on everything from dishes to the traditional pots and pans, but we've even had a lot of success with continuities like coats and jackets, and soft goods. So it really is a matter of changing the mix and giving your customers something different that will keep on driving continuities."

Continuities are coming back, said a general merchandise executive with a West Coast chain. "The continuity concept is not dead, but there's probably isn't a place for the breadth and depth of the continuity business, as it was before," he said.

FEWER AND SHORTER

The nonfood executive with the Texas chain said there are less continuity programs available than in the past. "I like continuities. I think they're a good sales driver and give you a nice lift, but there are fewer and fewer."

The remaining programs are moving upscale, the executive said. "The cheap ones don't sell anymore."

"I wouldn't say continuities are dead, but they are certainly downsizing," said Dan Spears, director of HBC and GM, Ingles Markets, Asheville, N.C. He confirmed that shorter time frames, higher priced products, and more in-and-out selections are part of the trend for nonfood promotions.

While continuities have almost "bottomed out" at this point, "they'll never go away," said Gerri Hopkins, executive director, Association of Retail Marketing Services, Red Bank, N.J. The spring ARMS show began as an event primarily focused on continuities, but has since evolved into more broad-based general merchandise promotions.

ARMS members have told Hopkins they have started to see a renewed increase in continuities. "There are always going to be supermarkets that will use continuities," she said.

By offering shorter programs of four to six weeks and better products, continuities can appeal to today's consumers, said Tom Merrick, GM category manager, Associated Wholesalers, Robesonia, Pa. "Consumers want the quality and they are willing to spend a little extra money if you've got the merchandise they want."

Winn-Dixie Stores, Jacksonville, Fla., has committed to a series of continuities for the next fiscal year, using them to drive traffic, said Dewayne Rabon, vice president of GM, HBC procurement/sales. "We will continue to use them as kind of a treasure hunt for our consumers as they come in our stores. Continuities give us the opportunity to give the customer something new and different every six weeks or so."

Continuities were down in 2004, stagnant in 2005, "and we're optimistic, if not bullish, about 2006," said Jay Goble, vice president, merchandising, Valu Merchandisers, Kansas City, Kan. At a recent show for its retailer customers, "we had a very good response" to continuities, he said.

"We did well with books and cookware, the staples of the continuity business. We offer a little bit of everything and our retailers tend to mix it up," Goble said.

'MAJOR EVOLUTION'

Continuity promotions are "in a major evolution," said Mike O'Shell, director, GM/HBC, the Penn Traffic Co., Syracuse, N.Y. The programs are getting smaller and the suppliers are cutting down on the number of weeks. "The playing field is shrinking," he said.

However, continuities still have a promising future in supermarkets. "If done correctly, they can still drive a lot of traffic and profits, while giving you something that sets you apart from your competition. It's another way to fight mass, but it has to be a program that makes sense and that is priced correctly," O'Shell said.

The continuity business is getting "a little bit difficult," said a nonfood executive with a Southeastern retailer. "We are seeing some upper-end products, but we're not seeing the wide breadth of items with mass appeal that we once saw," he said.

The increased reliance on imported product is part of the reason for the decline in the number of continuities and the rise of in-and-outs, the executive said. Contin-uities require relatively sophisticated displays with the pricing and the time frames on the point-of-purchase material, plus the product needs to be separated for its timed release, all of which involves a cost. It is easier and cheaper for the manufacturer in the Orient to just put the product in boxes and on palettes, he said.

The Southeastern retailer still does continuities, he said. "We're looking at four- to six-week programs and then we are trying to bring in some in-and-out promotions to bridge the gap," the executive said.

"In the last four to five years, continuity sales have dropped pretty substantially," said Doug Barnett, director of GM/HBC, Brookshire Brothers, Lufkin, Texas. "However we continue to run one or two continuities a year. I don't really know where continuities are going, but I don't see them going away."

Some continuity companies have gone out of the business, "but the ones that remain are looking for new and exciting continuities, or are giving the customers a better deal for their dollar," he said.