GETTING SOME WARES

JOEL ELSON

CHICAGO -- The competitiveness in housewares today has forced grocery chains to go beyond a simple product offering on the shelf.

Promotions and presentation, coupled with lower margins on top-selling housewares categories, have become essential in order for supermarkets to remain in the business.

Besides looking for new product lines, retailers said they will be talking to vendors about consumer-drawing promotions, seasonal merchandise and new display fixtures at the International Housewares Show, which runs here through Wednesday of this week.

"Housewares is a competitive category, and we must offer customers a value to keep that business in our stores," said Jan Winn, director of general merchandise and health and beauty care at Big Y Foods, Springfield, Mass.

"The challenge in housewares," said Jim Paterni, director of general merchandise at Glen's Markets, Gaylord, Mich., "is to compete against the mass merchandisers with promotions and cross-merchandising whenever possible."

Although housewares sales were flat for many chains last year, retailers and wholesalers interviewed by SN said they generated the most sales and traffic with buy-one-get-one free offers, half-price events and 1-cent promotions. Retailers also increased impulse turns of kitchen gadgets and small implements by merchandising on power panels, J-hooks and clip strips.

Those surveyed mentioned kitchen appliances and gadgets, food storage containers, rubber gloves and bakeware as their top-performing segments in housewares last year.

Although housewares overall was flat for Associated Food Stores, Salt Lake City, kitchen gadgets showed the most growth after the co-op wholesaler implemented a new 300- to 400-item Ekco gadgets program for some of its 500 to 600 retailers.

"Increased competition is a factor in our area with a lot of Wal-Marts and large superstores moving in. They all dip into the same pie, which is slowing growth," said Bob Bailey, general merchandise buyer.

"The 12- to 16-foot Ekco section's uniform packaging improved product presentation, stimulated consumer interest and generated increased movement," Bailey said.

To further increase housewares volume, Associated intends to offer temporary price reductions in the section this year, he added.

While kitchen gadgets sales did well for Associated, tabletop toasters, coffeemakers and other kitchen counter appliances moved slowly due to stiff pricing competition from the discounters, Bailey said.

Seaway Food Town, Maumee, Ohio, bucked the flat sales trend in housewares sales last year.

Bill West, the chain's director of nonfood, attributed sales increases to a strong merchandise display program using J-hooks, clip strips and power panels to merchandise many impulse gadgets. "Having 20 to 40 power panels up in a big store and refilling them weekly can bring higher sales," he stated.

In addition, the chain trimmed its prices to compete with Target, Phar-Mor and Wal-Mart.

West said the chain took a more aggressive approach with its housewares promotions. With the purchase of a 69-cent pair of rubber gloves, it offered a second set for 1 cent. Other promotions included buy-one-get-one free and half-price sales.

Glen's Markets reported good sales with small kitchen appliances that retailed from $10 to $30. "These did quite well, with sales running 50% higher by merchandising these countertop appliances out of the box and promoting them aggressively," said Paterni.

The retailer, which merchandised the appliances in line in the housewares aisle, increased department space from 4- to 8-foot sections to 8- to 12-foot sections.

Lowering retails to be a little more competitive also helped boost sales, Paterni said, pointing out that Glen's "had given up on the category for a while."

At Copps Corp., Stevens Point, Wis., food storage was a top-selling segment, according to Wayne Gresl, director of nonfood.

"Food storage sales growth, in fact, was more than in other areas due to new items introduced with snap-up, pop-up and tighter fitting lids," said Gresl, adding that promotional efforts on basic housewares helped the category.

Some of Copps' successful promotions featured disposable foil bakeware in price-reduction sales of 20% or more, driving customers to that bakeware section, Gresl said.

The challenge in building housewares volume is coming to grips with "the fact that department stores and the mass merchandisers have the space needed to stay in tune with changing lifestyles," Gresl said.

"They have the new colors and products and stores large enough to accommodate a more complete housewares variety, and food stores don't seem to change as fast and often are playing catch up," he added.

Ken Johnson, vice president of nonfood merchandising at Hannaford Bros., Scarborough, Maine, agreed that alternative formats have an advantage when in come to merchandising housewares.

"Competing with the new [retailing] formats is the challenge," Johnson said. These retailing formats "have a better opportunity and the space to get a better variety compared to food stores that are limited in their display area."

The chain is interested in "in-and-out opportunities that tie in with everyday food," Johnson said.

Chuck Witt, director of general merchandise and HBC at Certified Grocers Midwest, Chicago, said in view of the flat housewares business last year, operators may be forced to trim profit margins. "Retailers might have to give up some gross margin to build their housewares business," he said.

Witt said shippers of kitchen gadgets and tools promoted at $2 to $3 in floor shippers have stimulated impulse sales.

Clemens Markets, Kulpsville, Pa., trimmed its housewares profit margins last year and boosted its cross-promotions, which paid off in a good housewares year, said Larry Schimpf, director of nonfood.

Margins were cut 5% to 10% to move closer to discounters' pricing. The chain cross-merchandised kitchen tools and implements in its produce, bakery, cheese and meat departments.

Pricing competitively, keeping on top of the assortment and making sure the mix is what customers want are the challenges supermarkets face today, according to Schimpf. "But it's a challenge that can be met with supplier cooperation," he said.

At Big Y Foods, bakeware and cake decorating implements advertised and promoted aggressively showed the most growth in housewares for the chain, said Winn.

Promotions at Big Y last year included Ekco bakeware and private-label aluminum foil cooking pans in a buy-one-get-one-free and buy-one-get-two-free offering to those customers participating in the chain's frequent shopper card program.

Homeland Stores, Oklahoma City, expects its housewares business to improve in 1996 "with a lot more events and sales in plasticware and gadgets, including truckload promotions," said Steve Mason, vice president of marketing.

In a move to become more competitive and reduce costs in housewares, Homeland is now being supplied by Associated Wholesaler Grocers Value Merchandisers, Kansas City, Kan.