HIGH MARKS ARE EXPECTED IN BTS LICENSED LINES

JOEL ELSON

Supermarket general merchandise executives indicated they would be less cautious about buying costly licensed merchandise for back-to-school season, due to consumer demand for these items.

Movie, television and sports licensed products will play a larger role in fall back-to-school programs and promotions this year, they said.

The interest in new theatrical and video releases, TV shows and sports teams continues to drive shopper interest for themed tie-in school supplies and accessories, according to nonfood buyers interviewed by SN.

"There'll be more licensed themed products to meet the demand that movies like 'Space Jam,' Disney movies, TV programs and videos create," said Charles Yahn, vice president of general merchandise at Associated Wholesalers Inc., York, Pa.

Consumer spending patterns in the fourth quarter indicated a willingness to trade up to higher-priced licensed school and stationery items over commodity versions, he said.

During the past season AWI's retailers priced cautiously, "yet many themed items like file folders that were at higher retails than the same item at a mass merchandiser sold out," added Yahn. He said the top retail hovered about $9.99 last year.

Innovative products like a new soybean oil-based crayon from Dixon Ticonderoga will get a big play in school supply promotions at Associated Grocers, Baton Rouge, La.

Indeed, Sonny Ellis, the wholesaler's director of health and beauty care and general merchandise, plans to contact the Louisiana Soybean Commission for a possible promotional tie-in, in connection with the state's status as a soybean producer.

"We'd like to play the new crayon -- which is safe for kids and harmless if they put them in their mouths -- as a tie-in for co-op funds," said Ellis.

He said new items can only generate interest in back-to-school displays at store level. Associated Grocers retailers "will also stay with proven winners like 'Toy Story' that did particularly well.

"NASCAR is still very hot and seems to get bigger every year. It will probably stick around for a while and be a big part of our school supplies in notebooks, with race cars on covers, calendars and as in-and-outs," said Ellis.

A priority for Homeland Stores, Oklahoma City, is rethinking the ad schedule so that features and in-store specials that run in store circulars hit the street in a timelier manner, according to Ken Jones, director of general merchandise.

"We've got to be out there early to beat the Wal-Marts and Eckerd," said Jones.

Homeland gets its licensed back-to-school selections from its wholesaler, but hadn't completed the assortment at press time. Displays at store level will go in at the same time as school starts, but ads may break about a week or so before school starts, or earlier, said Jones.

"Ad timing is tough. If you get too far in front, then people aren't ready to buy. But if you wait too long, then the discounters come out with a 14-page glossy," Jones added.

A major national grocery wholesaler based in the Midwest will increase licensed products 10% to 15%, while de-emphasizing commodities, according to the category manager for school and stationery, who asked to remain anonymous.

While Looney Tunes and Coca-Cola will again be part of the wholesaler's licensed offerings, "Nickelodeon looms again to be the strongest of the bunch in basic supplies like portfolios and writing instruments," said the category manager.

He said Harley Davidson and "Star Wars" will also be part of the licensed inventory, based on how well they do on impulse.

"Our retailers will increase their licensed goods because shoppers are willing to pay the higher retails. People still will pick up five-for-$1 commodity notebooks and portfolios, but you've captivated that child's attention in the grocery store and they've got to have [the licensed item]," said the wholesaler.

He said new entries include Elmer's Brain Stuff erasers and pencil sharpeners that capitalize on the Little Elmer figure, with retails starting out at 99 cents and going up to $7.99 for a Brain Bag book bag.

The wholesaler also is offering Dixon's new soybean-based crayon to its retailers across the nation, "which will give them an alternative to Crayola," said the category manager.

"The mass merchandisers football Crayola crayons, selling them well below cost. The soybean crayon is a big addition to a tough category that's hard to break into. The Department of Agriculture and Soybean Council getting behind it also gives the product concept much clout," he added.

At Associated Wholesale Grocers, Kansas City, Kan., new licensed products have also become a more important part of the overall school accessory mix.

The fall back-to-school item lineup will incorporate Nickelodeon channel's "Rugrats" TV show characters in licensed portfolios, notebooks and binders, pens and pencils and dry eraser boards geared to the 7-to-11 age group.

"You've got to get on them while they're hot, and 'Rugrats' appeals to younger kids," said Bill Dunkle, general merchandise buyer.

Associated Wholesale Grocers will also play up Coca-Cola licensed products this year. "It did well last year and will be big again this fall," added Dunkle. He said pricing should stay about the same as last year, with the highest price point being $19.99.

Seaway Food Town, Maumee, Ohio, plans to give licensed products a big play in its school product promotions. "We went heavily into Coca-Cola last year, and I imagine we'll do the same this year," said Bill West, director of nonfood.

Although the chain builds its selections around Mead, Yikes and other vendors, "we know there's new stuff that we must put in," added West.

As retail pricing has edged forward during past years, Seaway has begun to promote some commodity items like pencils and filler papers in its frequent-shopper program.

By featuring commodity school supplies with the frequent-shopper card, "shoppers get products at a reduced price, and our tonnage and profits are up," said West.

He said value-added packs carry strong customer appeal. "Any time we can get a bonus pack we put it in. It's a real value to customers, and if it's truly free it's a pass-through we don't pay any more for, and customers get the extra products."

Ellis of Associated Grocers said value-added packs did exceptionally well last year. The concept will be part of the mix this year as well, "provided manufacturers offer them." Associated Grocers did well with promotions such as "buy two pens and get a third pen free," or "buy a pack of pens with an on-pack free highlighter," he said.

Dunkle of Associated Wholesale Grocers said the wholesaler is putting a new spin on value-added back-to-school merchandising, with bonus packs that combine items carried in its warehouse.

"We'd shrink-wrap two or three theme books with a 10-pack pencil, and are kicking around other ideas that would give retailers a profit and at the same time some value for shoppers," said Dunkle.

Yahn of AWI said consumers have become used to value-added packs on display racks and expect to find themed back-to-school displays.

"People expect that now," Yahn said. Promoting free filler paper with an in-ad coupon and a $10 back-to-school purchase worked well last year, he said.

Another successful value-added tie-in was a free pen with a pack of pencils. "Kids seem to go through pens and pencils like water." AWI also offered a free lunch container as a bonus for buying a book bag, Yahn said.