GIANT EAGLE IS BECOMING AN ENTERTAINMENT HIGH FLIER

DAN ALAIMO

PITTSBURGH -- Giant Eagle here is transforming its video departments into total entertainment software destination shops.

New stores dedicate 3,000 to 5,000 square feet to the Iggle Entertainment departments. (Iggle is derived from a local pronunciation of eagle.) As big as many video specialty stores, these store-within-a-store sections are accessible from inside the supermarket and from the parking lot, with prominent exterior signage.

With rental and sell-through selections to rival the specialists', the Giant Eagle departments also offer video game software and hardware for rental and sale, CD-ROM software for sale, audio books for rent and, in some stores, music for sale.

All eight Iggle departments recently visited by SN carried new digital videodisc software.

In some of the larger departments, as much as a quarter of the space was devoted to products other than prerecorded videocassettes. Some game inventories exceeded the total video rental selections of smaller supermarket video programs.

"They are state-of-the-art video departments, without a doubt," said Bill Bryant, vice president of sales, grocery and drug at Ingram Entertainment, La Vergne, Tenn. "They view their competition as video specialty stores rather than other supermarkets, and their departments reflect that."

"Giant Eagle has remained on the leading edge of innovation in supermarket video rental," said Des Walsh, vice president and general manager at SuperComm, Dallas. "They have been consistently upgrading and expanding their departments to the extent that their new stores rival any of the video superstores in breadth of selection and other entertainment offerings."

Giant Eagle executives declined to be interviewed for this story.

Well established in merchandising video rentals and sell-throughs, Giant Eagle is extending its prowess to related areas. In many cases, individual store promotions are leading the way.

When visited by SN, the Fairlawn, Ohio, store was using a tie-in with a neighboring Circuit City to merchandise DVD. A large-screen television and DVD player provided by the electronics store were the first things customers saw when entering the video section from the supermarket. A sign promised a special price of $499.99 on the DVD player to customers showing their Giant Eagle Advantage card at Circuit City.

In the North Huntington, Pa., store, there was an elaborate tie-in with the deli's Pizza Di Casa line. A cooler facing the parking lot entrance to the department contained pizza in 7-inch, 12-inch and half-sheet sizes, with prices ranging from $2.29 to $7.99. A sign read "Giant Eagle presents our feature attraction. Take one." Nearby was a phone for customers to order pizzas that could be delivered to the video department within 15 minutes, Thursdays to Sundays.

The Giant Eagle departments also make good use of in-store monitors and game demonstration units. The larger stores had two or three banks of three monitors suspended from the ceiling.

Newer departments all had three to four game demonstration stations. However, one older department in New Kensington, Pa., which had eight demonstrators when it opened in late 1994 now has none. Another store in McKees Rock, Pa., which had six when it opened in 1995, is down to two.

Giant Eagle is also fine-tuning its extensive game offerings, cutting back on the fading Sega Saturn format and focusing on the popular Sony PlayStation, with the hard-to-get Nintendo 64 system well represented in all stores. Total game inventories ranged from more than 300 at the four-month-old Fairlawn store to almost 1,000 at the showcase North Huntington store, which opened in 1995.

Games and CD-ROMs were offered for sale in the large departments. In some they were sold from secured displayers on the floor, while others sold them from behind the service desk. Budget products, however, were sold openly from speed tables and shippers.

Missing in the newest stores was an experimental 20-foot music section -- including as a centerpiece a Wurlitzer jukebox for sampling compact discs -- put into stores that opened last year.

One store employee said music would be phased out in coming months, but in another store SN was told music is doing well. The selection was evenly split between soundtracks and top hits, with a heavy emphasis on Disney products. CDs were priced at $13.99 and $14.99, and a few cassettes were available for $8.99. Close-out products were available in some stores.