GIANT EXPANDS TOYS R US TEST TO THREE MORE SITES

STEPHANIE LOUGHRAN

LANDOVER, Md. -- Just in time for the upcoming holiday shopping season, Giant Food here has rolled out Toys R Us-branded toy sections in three more supermarkets.

Giant stores in the Virginia towns of Manassas and Dale City, and a Super G in Laurel Springs, N.J., have recently opened the store-within-a-store departments, according to Barry Scher, vice president, public affairs for the food retailer. A Giant store in Ashburn, Va., debuted the test format in August.

Scher would not comment further on specific details of the test program, including whether more Giant or Super G stores would be adding the concept.

SN polled several stores in Maryland, Virginia and Delaware, but could not find any other stores that said they planned to add Toys R Us sections.

Officials at Toys R Us, Paramus, N.J., could not be reached.

According to sources at the four individual stores with the test, the Dale City and Laurel Springs units opened their Toys R Us sections about two weeks ago. A source at the Manassas store said the one-aisle toy section launched three weeks ago. That store relocated the greeting card section to make room for the new toy department.

Steve Chick, food and drug retail analyst for JP Morgan Chase, New York, said testing another retail brand in a supermarket is "risky" but "interesting."

"It's a risky strategy in their existing box, as they try and become a one-stop shop," he said. "There's a point where they could have too much inventory and it could backfire."

Chick said he would be curious to learn what merchandise Giant sacrificed to make room for the toy departments.

Kurt Barnard, Barnard's Retail Consulting Group, Upper Montclair, N.J., predicted that the Toys R Us program will do well for Giant.

"It's going to be the wave of the future," he said. "Chances are [the Giant stores] will make more money on toys than anything else they had in the section."

He said offering toys in a supermarket could also be good business for Toys R Us.

"There's no question that the toy industry is ailing, and toys need exposure on a year-round basis," he said.

This marriage of toys and groceries is especially attractive, Barnard pointed out, given the heavy traffic that supermarkets generate from mothers and their children.

"Can you imagine the potential for the toy business in supermarkets? We're convinced we'll see more of this in the coming months," he said.