LARRY'S OPENS ITS FIRST LIVE RENTAL DEPARTMENT

DAN ALAIMO

SEATTLE -- Larry's Markets here recently opened its first live video rental department in a new 65,000-square-foot Lobuck$ Food & Drug format store.

The new section, introduced July 12, carries 1,800 tapes in 200 square feet, said Gayle Cloud, spokesperson. It is located in the front of the store near the service counter, a tobacco center and a business section that offers fax and copy service. Video rental is another convenience for the store's customers, Cloud said. "Video was included in the plan at LoBuck$ to round out the one-stop shopping aspect of the store," she said. "People like to rent videos when they buy their groceries." The section also includes candy and popcorn. It is Larry's third video department.

"This is the first time that Larry's has added a video department in some time," said a local observer. The live section, where the actual tapes are displayed on the racks protected by a security system, "is an extension of what it has been doing." At present, the retailer has no plans to extend either the LoBuck$ format or its video rental program, said Cloud. "They would like to take it into other markets, but they are waiting to see how this one goes," she said. Fitting in with the store's low-price image, rental rates are the lowest in the area, said the local observer. New releases are $1.99 a night; video games, $1.49; children's titles, 99 cents; other catalog videos, $1.79. There is an ongoing offer of three catalog videos for $3 for three days. Most other supermarkets in the area charge $2.49 a night for a new release, while specialty store rental rates are about $3 to $3.50, the observer said. "Some other stores are also at $1.99, but they are the minority. This store is definitely cheaper than most," the observer said.

Outside the rental area is a

large display of sell-through videos, said the observer. This includes a permanent 12-linear-foot run of product and an endcap dedicated to major video promotions. The retailer merchandises videos in a way that is consistent with other categories, said the observer. "They do a fine job. They treat video like any other item in the store and give it a very attractive treatment," the observer said.

As a result, Larry's has been more successful in selling videos than other retailers, the observer noted. "They've done extremely well with sell-through because they've dedicated the time, energy and space to it. All their stores have an end display where they can build substantial single-title displays," said the observer. Candy is sold at $3.99 a pound. The store in West Seattle also includes a pharmacy, film processing department, large frozen foods section and fresh foods.