EXPECTATIONS GREAT FOR Q4 PHONE CARD SALES

JOEL ELSON

Given the right promotion, supermarket phone card sales have risen as much as 40% in the fourth quarter. Cards with holiday designs, reduced calling charges and in-store merchandising materials have yielded the increases, retailers said.

At Food Lion, Publix and Hy-Vee Stores, retailers are sparking incremental volume for their Sprint prepaid cards in the holiday period using themed cards, reduced per-minute charges and supplier-sponsored radio ad spots with store tag lines.

Last month, the retailers ran their $10, $20 and $30 Sprint cards in a "Talk the Night Away" promotion at 10 cents a minute. "The lower rate was down from the regular 21 to 25 cents and applied to calls made from 7:00 p.m. to midnight, the prime usage period for prepaid cards," said Steve Sewell, Sprint group manager, retail sales support, Overland Park, Kan.

Store-level point-of-purchase materials from posters to static clings at the three chains supported the promotions. These efforts "can lift sales anywhere from 5% to 40%," Sewell said, adding that prepaid cards become a strong impulse gift item in December. "Sales begin to pickup from higher store traffic and gives us the lift we're looking for in that month."

Chains like Albertson's, Ingles Markets and H.E.B expect to boost their MCI WorldCom prepaid card turns 30% for the fourth quarter shopping period, said the supplier.

Ingles, Black Mountain, N.C., is giving its 30-minute phone cards a holiday spin with a lower per-minute rate during the holiday season. In addition to a Christmas tree card, the retailer and MCI are promoting cards featuring Warner Bros.' Loony Tunes, Bugs Bunny, Tweety Bird and Tasmanian Devil. Launched last month, Ingles is repeating the promotion again from Dec. 12 to 26, said an MCI official. During these promotions, the price of a 30-minute card is $4.49, down from the regular $7.99 rate.

"Grocery stores are using holiday images this year and promoting their prepaid cards with a slightly different merchandising approach," explained Chris Smith, director of marketing, prepaid markets, at MCI WorldCom, Altharetta, Ga.

H.E.B. Grocery Co., San Antonio, is promoting 15-minute MCI phone cards for the regular $3 price but "with a Christmas tree image," Smith said, adding that Albertson's, Boise, Idaho, is featuring its Albertson's private label 30 to 100 minute prepaid cards in a special holiday sleeve and merchandising them on clip strips at checkouts, with greeting cards and in the pharmacy.

"Promoting low-cost cards in the $3 to $5 range offers the chance to attract new phone card consumers," Smith added.

Rather than developing a price-oriented promotion program for the fourth quarter, retailers at York, Pa.-based Associated Wholesalers highlighted its basic phone cards with ceiling danglers and signs to alert consumers that the cards were in the stores.

"We would have gone for a promotion for the fourth quarter if our supplier AT&T had offered one this year," said Charles Yahn, vice president of general merchandise at the wholesaler. "AT&T didn't come forward with an aggressive end-of-year holiday promotion."

Retailers, however, plan to pencil in an aggressive prepaid card effort next year based on the way shoppers responded to a phone card promotion last Christmas, he said. "Last year a 'buy one $10 card and get a second card free' promotion just blew our phone cards out of stores." The retailers played up the offer in ads, radio spot messages and billboards. The holiday promotion did especially well at inner-city stores, Yahn said.

To boost volume for its prepaid cards in the final quarter, Marsh Supermarkets, Indianapolis, ran a sweepstakes for a $1,000 shopping spree at its 22 LoBill Foods, said Melody Abella, marketing manager at Atcall, the phone card supplier, Vienna, Va.

The sweepstakes ran from November 1 to December 1 and was displayed in corrugated shippers at checkstands.