HAGGEN PREMIERES TWO NEW VIDEO RENTAL UNITS

DAN ALAIMO

BELLINGHAM, Wash. -- Haggen opened two new video rental departments in February and March that, at least in terms of design and copy depth, outclassed other retailers in the Seattle area. The chain opened a Top Food & Drug store in Kent, Wash., in early February and a Haggen format store in Stanwood, Wash., on March 1, both offering video rentals. Although the two video departments differ significantly in appearance, they are state-of-the-art live inventory sections that heavily emphasize multiple copies of new releases. "I certainly think they are leaders in this market among grocery stores with video departments," said a video supply source in the area, who asked not to be identified.

Scott Brown, Haggen's buyer of general merchandise and video, declined to be interviewed by SN about the new departments. Haggen now has a total of 15 stores, 12 under the Top Food & Drug banner and three in the more upscale Haggen format. With live inventory, the actual tapes are displayed on the racks, protected by a security system. Haggen's departments display the box in front of the tapes and show the full width of the box art on all titles. Most other supermarket departments in the Northwest -- including those of Safeway, Albertson's and Quality Food Centers -- display empty boxes, with the tapes kept behind a service counter. "Haggen has become increasingly aggressive with each new store in terms of the size of the departments and the amount of new releases," said the supply source. "They definitely believe in

depth-of-copy on the new releases. That was one of the reasons they went with the SuperComm program." SuperComm, Dallas, a Disney subsidiary, offers a program under which retailers can obtain new releases for about $10 a copy and then share the revenues 50-50 with the supplier. Retailers otherwise pay about $60 to $70 to own a new release. Transactions are tracked electronically. Des Walsh, SuperComm's vice president and general manager, would not comment on the specifics of Haggen's program. But, he said, "Haggen is one of the stronger regional supermarket video operators. We believe their newer video departments represent the future of supermarket rental with their strong focus on expanded inventories and deeper new release sections." During store visits in early March, SN heard frequent public announcements promoting offerings in the rental departments. The department in the Top store in Kent was about 1,300 square feet with 3,500 units of rental inventory, including 150 video games. The Haggen department in Stanwood was larger, approaching 1,600 square feet, with almost 4,000 units of inventory, including 100 video games. New releases were about 20% of the inventory in both departments. SN found some differences in the quantity of certain new releases carried in the two stores. The Haggen store, located in a rural area, went heavier on titles aimed at the family market, while the Top store, in its suburban location, carried more of the adult-oriented titles. On "The Mask," for example, the Top department had 40 copies up for rent, while the Haggen store had 20. On "The Little Rascals," the Top store had 33 copies, while the Haggen store had 40. On "Little Giants," Top had 14 copies, Haggen, 34. All these movies are available at sell-through pricing. Among rental priced titles, both stores carried 20 copies of "Time Cop." On "In the Army Now," a movie from Disney label Hollywood Pictures -- and one that was probably obtained from SuperComm -- the Top store had 30 copies, while the Haggen store had 20. Rental rates at both stores were $2.49 a night for new releases and 99 cents for children's titles. Others were priced at $1.79. Haggen, like many other supermarket retailers in the Seattle area, offered an ongoing "3 Movies, 3 Days, 3 Bucks."