HANDLING THE MERCHANDISE

CHRISTINA VEIDERS

With retailers reporting pre-Christmas nonfood and video sell-through sales robust, 1996 should end on a high note in the nonfood aisles of most supermarket chains around the country.

This year nonfood grocery executives continued to seek ways to become more competitive in merchandising either through better and more efficient category buying or by building nonfood destinations as a way to differentiate themselves from the competition.

New product technology was instrumental in driving sales in certain categories. This year the photo industry introduced its revolutionary advanced photo system with new film and cameras. The battery industry rolled out its on-battery testers. Phone cards continued to become more sophisticated and prevalent in supermarkets.

Supermarkets were quick to get new over-the-counter drugs such as Zantac 75 and Femstat 3 to a consumer market prone to self-treatment. "Ten years ago we saw products coming out, but not at the rate that they're coming out today," said Flint Pendergraft, director and pharmacy administrator at Raley's Supermarkets, West Sacramento, Calif.

OTC drugs also created new categories such as smoking cessation and hair growth with higher ticket retails.

"The public is looking for these OTC products, which as prescription drugs have sold millions of dollars. And the OTC drugs are very profitable for us," said Patrick Gallaher, buyer-merchandiser at Market Basket Stores, Nederland, Texas.

The year also marked the release of several new programs to help retailers serve their shoppers better and solidify their supplier relationships.

Earlier this year the National Housewares Manufacturers Association, Rosemont, Ill., released its Great Performance Alliances, a certified program of best practices designed to improve the working relationships between retailers and suppliers and facilitate hard goods distribution. The association offered the program to all retail channels, including supermarkets.

"Theoretically, the goal of Efficient Consumer Response and GPA is probably very similar," said Tom Conley, executive director and chief operating officer of the housewares association. "We are taking GPA one step further than ECR by providing formal training," he said.

The "Seasonal Best Practices" study from the General Merchandise Distributors Council, Colorado Springs, Colo., which benchmarks the Christmas season within four food chain formats and provides retailers with a process to build seasonal events in their stores throughout the year, received positive industry response.

Jerry Barnes, vice president for member affairs and education at the GMDC, told SN that GMDC is considering a second phase of the project that would provide case studies of all the major seasons.

What made this study unique, according to Barnes, was that it took over a year to complete, it can be easily executed and the statistics in the Christmas case study gave the project validity.

"Just the subject matter itself is unique. There may be a lot of retailers that haven't taken the time and made the effort to develop a program like this to increase sales," he said.

Pet supplies became a focus for major chains as they attempted to go head to head with category killer pet superstores. Chains such as A&P, Food Lion, Dillon Stores, Price Chopper Supermarkets, Big Y Foods, Big V, Star Market Co., Wegmans Food Markets and Fred Meyer Inc. rolled out dedicated pet departments and store-within-a-store concepts.

Consumer demand and favorable buying trends are reasons for supermarkets to devote the space to expanded pet sections. "The high level of pet ownership in this country has made pet supplies a burgeoning category for supermarkets," said Michael Rourke, senior vice president of communications and corporate affairs at A&P, Montvale, N.J.

By using some of the above tactics and taking advantage of new product offerings, grocery retailers have been able to maintain sales in a highly competitive retail environment even though mass merchandisers continued to carve out greater nonfood market share.