E.W. JAMES TESTING STAPLES SECTIONS

WENDY TOTH

UNION CITY, Tenn. - E.W. James and Sons Supermarkets here installed the first of four tests of Staples-branded store-within-a store sections last week.

The Staples store, located in Princeton, Ky., is the first branded in-store section for the supermarket. Along with three others, it will serve as a test site for further expansion throughout the chain.

"Many of our stores are in small communities that don't have a lot of options for back-to-school and office, so we do have a market for it," said Ken Pink, chief operating officer, E.W. James.

Customers of the Princeton E.W. James & Sons don't have a nationally branded office supply store within the community, Pink said. "What is great for me is that I can use the Staples name and see if a national campaign will be effective in a smaller community."

The retailer is marketing the new section with a large banner and signage outside the store, and advertising in its weekly circular and local newspapers. "It will be interesting to see if our consumers find value in the brand," Pink said.

Located in the front of the store in what used to be the photo lab area, the Staples section carries about 900 items, roughly 25% bearing the Staples brand name, according to Pink.

While the majority of the items will be located in the dedicated Staples sections, some "high velocity" items will be found in the GM and customer-service areas, Pink said.

"We want to try to create an area where people feel like they are in an office supply store," he said.

Staples will provide training to E.W. James employees for the first four to six weeks after installation, covering topics such as ordering, replenishing and managing shrink, Pink said. "We will be carrying some small high-value items, such as cartridges," he said. Staples will supply the section, while E.W. James will service and sell the merchandise.

The retailer is confident in this partnership since Staples has worked with other supermarkets, including Ahold USA's Stop & Shop Supermarket Co., Quincy, Mass., and Safeway, Pleasanton, Calif., Pink said. However, "like everything else, when you are doing something new, lining up systems and people and orders is always a challenge at first," he said.

In addition to the merchandise offered on the shelves, the store will be able to order individual items for customers, such as a single roll or package instead of a case, or "anything in the Staples catalog," Pink said.

For Staples, this could mean building customer loyalty and increased visits to the Staples website. "It is a lot of synergy for both chains," Pink said.

"Our communities usually only have national chains from the restaurant industry, and that is why Staples is interested in us as well. This is an outlet for them to get their name in an otherwise unreached area."

E.W. James has 34 stores in Tennessee, Kentucky, Arkansas and Mississippi. The next Staples-branded sections are expected to open in Richmond, Ky.; Elizabeth, Ky.; and Martin, Tenn.