GETTING GLOSSY

WENDY TOTH

Supermarkets are getting more flexible in their magazine placement as wholesalers and distributors offer more opportunities to expand retail programs, industry sources told SN.

Store promotions, cross-merchandising and specialized reading centers are gaining clout while publishers look to retailers as a way to boost sales. Meanwhile, celebrity magazines are building interest in the overall category.

"If you take magazines out of their normal spot and put up a special display somewhere else in the store, it really increases sales," said David Hoefling, grocery manager, B&R Stores, Lincoln, Neb.

"We had a record-setting pace for magazine sales last year," said Nick Barainca, director of nonfood, Scolari's Food and Drug, Sparks, Nev., which has bistro-like reading centers in three of its stores. "We were up 12% total for the company and most competitors in the area were up as well, the closest being around 10%."

As sales rise, publishers are investing money in new titles and increasing monetary allowances to wholesalers and distributors, said Jim Gillis, president and chief operating officer of Source Interlink, Bonita Springs, Fla., a magazine distributor. This in turn enables the distributors to focus the attention of retailers on the publishers' products and programs, he said.

"Publishers have to have a place for these titles to go," Gillis said. "We are on a big push with our retailers to update their fixtures and make room for the new titles coming in."

The publishing world's sharp focus on retail is coming from a slight upturn in the category, said John Harrington, partner, Harrington Associates, Norwalk, Conn. This is fueled by rising sales of weekly celebrity

titles, and established fashion and lifestyle magazines, as well as a saturation of the subscription marketplace, he said.

"Subscription sales are not as lucrative or productive as they once were," Harrington said. "They used to generate a lot of interest, so now publishers are developing retail sales."

After a fairly sharp decline of unit sales through most of the 1990s and into the 2000s, industry unit sales from 2004 and 2005 "look flat but are actually up by a fraction of a percentage point," Harrington said.

Despite the larger industry decline, magazine sales have been steady over the past several years for Day's Market Place, Heber City, Utah, and, "we see new varieties coming in all the time," said owner Allen Day.

Improved category performance over the last two years has no doubt been due to the growth of the celebrity weekly subcategory, Harrington said.

SINGLE COPIES SELL

Veteran player People Magazine has increased single copy sales by 1.5% for the six months that ended Dec. 31, 2005, as compared to the previous year, according to figures filed with the Audit Bureau of Circulations, Schaumburg, Ill. Meanwhile, newer title In Touch Weekly increased single copy sales in the same period by 14.8%, and US Weekly rose 12.2%.

"This has been a lot of extra sales for the overall category," Harrington said. He added that the opposite may have been true in the 1990s when a few high-volume magazines like TV Guide and some tabloids were declining rapidly and dragging industry figures down.

The performance of well-known publications like Vanity Fair - which has increased single copy sales by 31.8% for the same period, according to the Audit Bureau of Circulations - has also contributed to the industry's momentum. Men's Journal showed a large gain, at 32.4%.

Another noteworthy title, Elle Girl, a leader in the popular subcategory of young women's titles, has increased single copy sales by 21.7% during the same period, according to the Audit Bureau of Circulations.

"Elle Girl is doing very well, which is good for supermarkets in particular because this type of magazine really relates to its consumer and can drive incremental sales of the products that are advertised in its pages," said Ann Finn, vice president of consumer marketing, Magazine Publishers of America, New York. "One way to capitalize on this is to feature the magazine in an area where the shopper is likely to see it."

Placement is everything, said Preston Phillips, GM manager at Day's. "The magazines that we place at the checkstands seem to catch the eye of our customers and sell far better than the rest."

Finn suggested placing titles like Elle Girl in a health and beauty care aisle, or anywhere the target audience will likely go.

"For example, if you have a craft section in your store and you provide a craft magazine right there, it might give the customer inspiration and ideas - and cause them to buy some supplies right there," Finn said.

The only problem, according to Source Interlink's Gillis, is "it costs money to move product around the inside of a store more than once."

But with an overall expansion in the industry, more sophisticated merchandising may be in the works.

"If retailers can work with publishers on [cross] promoting magazines ahead of time, they might be able to do blowups of the covers to create excitement and help sell more product," Finn said.

Creative merchandising ideas are pushing more sales toward supermarkets rather than just bookstores, said Scolari's Barainca. "More and more grocery stores are tapping the book and magazine category by putting out a lot of product in different ways."

The three Scolari's stores that feature a bistro-like area just off the deli and bakery section carry popular newspapers, magazines and hardcover books, Barainca said.

Creating Atmosphere

"Barnes & Noble has added a coffee area to their store, and we have the same concept. If you have coffee and a doughnut, maybe you'll page through something and maybe you'll buy it," Barainca said.

And buy it they do. Out of 16 stores total, the three Scolari's with a bistro-like reading areas account for 30% to 40% of the company's overall sales in the magazine and book category, Barainca said.

"I think presentation is everything," B&R's Hoefling said. "How you display an item will dictate how it sells, and with magazines, any kind of cross-merchandising is a good idea."

Finn pointed out that a busy customer, such as a new mom, probably won't spend any extra time looking at magazines unless they are right in her target area: the baby section.

The key is ensuring that magazines get lots of "face time" with customers, Gillis said. Source Interlink recently implemented a program with all of its U.S. customers called pre-weekend delivery, where weekly celebrity titles are delivered to stores the Thursday prior to the week for which they are published, overlapping the previous week's issue and adding an extra weekend of exposure.

"These weeklies are creating so much awareness in the category that you have to keep the racks fresh and keep the consumer seeing new product," Gillis said.

Much like their customers, supermarket category managers should try to keep up with the titles as well.

"There are an abundance of choices, which means more work but also more opportunity for retailers who know what the individual magazines have to offer their customers," Finn said.

Distributors, according to Barainca, make it possible to customize titles depending on the store. "We don't want a customer to buy a subscription if we can provide it, so as a supermarket, we aren't hurt by carrying just two or three copies of something. If we don't sell it, our distributor buys it back."

Over Exposure?

Supermarkets have to get creative when the covers of their best-selling magazines are deemed unsuitable for children.

Some retailers make it a point to review the covers of popular magazines before approving their display, industry observers told SN.

"The biggest trend that we're seeing in magazines is customers complaining that we are putting risque covers right in front of their children," said Nick Barainca, director of nonfood, Scolari's Food and Drug, Sparks, Nev.

To remedy this problem, Scolari's "makes sure the title is still visible but the cover itself is hidden behind other magazines or behind a wooden strip," Barainca said. "In the past, some retailers, including us and Wal-Mart, actually pulled a few issues of Cosmopolitan off the shelves and sold them by request only."

In a related incident, Albertsons, Boise, Idaho, pulled copies of the October 2005 issue of Seventeen Magazine from its shelves nationwide in response to customer complaints that a health article titled "Vagina 101" was inappropriate.

"Most supermarkets guard inappropriate covers in some way, or in some instances, refuse to handle the issue," said John Harrington, partner, Harrington Associates, Norwalk, Conn.

However, with the rise of celebrity-driven magazine sales, the scantily-clad cover model trend may see a slight decrease, said Jim Gillis, president and chief operating officer of Source Interlink, Bonita Springs, Fla.

"Risque doesn't come into play quite as much as magazines featuring more celebrities on their covers, instead of models," Gillis said. "If Reese Witherspoon is on the cover of a magazine, she is drawing more attention than some model who is showing a lot of skin."

WENDY TOTH