H-E-B TESTS LOW-PRICED CAMERAS, FILM FROM KODAK

JOEL ELSON

SAN ANTONIO -- H.E. Butt Grocery Co. here is testing Eastman Kodak's low-price Colorburst film and single-use cameras.

Neither H-E-B nor Kodak executives would confirm or deny that the grocery chain was part of the Colorburst test, which began in the first quarter and will run to the end of the year. When the testing is complete Kodak will decide on a national rollout.

A clerk at an H-E-B store here confirmed the retailer has been carrying Colorburst chainwide. "Sales have been pretty good," she said.

The chain only merchandises Kodak film and does not carry any private label, according to sources.

Colorburst is being sold at H-E-B in 100 and 200 speed film, 24 exposures, for $1.99 and $2.29, respectively. This compares with 100 and 200 speed Kodak Gold standard film priced at $3.28 and $3.79, respectively. Colorburst 400 speed single-use cameras with flash are priced at $9.99 with 27 exposures. A daylight version without flash sells for $6.99. This compares with Kodak's one-time-use cameras priced between $7.59 and $13.99.

Kodak is testing Colorburst as a low-price nonbranded film with the intention of competing with private-label film, said a Kodak spokesman, who declined to say how sales were going. Other sources said Colorburst is one way for Kodak to combat the low-price war being waged by Fuji, which is selling its film 20% lower than Kodak in some markets.

"Colorburst isn't a private label per se, because it won't carry the retailer's name on the package. It's kind of a sub-brand, without any Kodak identification," said the Kodak spokesman. Private-label film represented 5.4%, or $89.7 million, of the $1.6 billion U.S. film market for the 52 weeks ended June 22, 1997, according to Information Resources Inc., Chicago.

For the food channel private-label film accounted for 6.1%, or $20 million, of $331.5 million total film sales during the period. Of the 64.3 million rolls of film grocery stores sold, 7.5 million were private-label brands.

According to the spokesman, some supermarkets may view Colorburst "as a replacement for private label or as a low-priced film. Others may look at it as a means to provide a full range of products at different price points, all from the same manufacturer." Some considerations for retailers deciding whether to offer Colorburst on film racks, according to the manufacturer, include: the film's price-competitiveness, its shelf performance in comparison to existing lines, and whether it offers a reasonable opportunity to expand the category.

Asked if Colorburst will be supported by advertising allowances and promotion programs, the spokesman said, "I have a feeling that's going to be negotiated on an individual basis, but probably not."

Colorburst uses an older Kodak technology, which "doesn't reflect anything resembling the latest Kodak offers since we've updated all our film products in the past 18 months," the spokesman said.

In Colorburst, however, consumers "are still getting a pretty good quality product in the older technology. But not one that's state-of-the-art," he added.

Some grocery retailers' and wholesalers' reactions to the Colorburst offering are lukewarm.

At Associated Grocers, Baton Rouge, La., adding another film brand or replacing its Shurfine controlled film for Colorburst isn't a front-burner issue, according to Sonny Ellis, director of nonfood.

"Our Shurfine film sales are excellent in 200 speed 110 size; and in 100, 200 and 400 speed, 35 mm two (24-exposure) disposable cameras. Priced 25% to 30% lower than national brands, Shurfine accounts for 30% to 40% of our film business, with the balance in Fuji film sales," added Ellis.

Taking on another film line would translate into discontinuing a film brand, he added. "If Kodak came to us and said Colorburst is testing quite well, its shelf price would have to be lower than our present [low-price] line. This is what would drive it for us. They would have to offer an advantage over what we now carry," he emphasized.

Ellis said consumers accept lower-priced store-brand film more readily, and Associated retailers continually sell out the Shurfine brand on film displays.

Larry Miller, film buyer at John C. Groub, Seymour, Ind., said if Colorburst tests prove successful, "I'd have to look at their program. But carrying another brand wouldn't make sense. There are, however, film shoppers that buy based on price, and others that pick a brand they feel comfortable with and that's worked well for them in the past."

In general, sales off Groub's film rack, which offers the Super Valu Home Best private label, Kodak and Konica, "don't do well. And private label doesn't seem to be a hot item. Consumers may be going to other retailers since everybody in the world now sells film," said Miller.

Opting for another film brand or shifting to a different second-price label isn't a viable option for retailers supplied by Richfood Holdings, Mechanicsville, Va., said Ron Turner, Richfood's vice president of general merchandise.

During the year Richfood retailers began adding the ShopRite private-label nonfood line, including film, under a supply arrangement Richfood entered into with Wakefern Food Corp., the Elizabeth, N.J.-based wholesale division of the ShopRite retail co-op. Because the ShopRite nonfood items are "just doing unbelievably well we would be very cautious about switching to a new film line, and the manufacturer would have to do something to convince us to drop a franchise that's so well established," asserted Turner.