LICENSED TIE-INS FOR MEGAMOVIES BOOM

PAT NATSCHKE LENIUS

When it comes to licensed products based on movies, the question might be: Will Disney's lion steal any of Snow White's thunder in fourth-quarter sales?

Supermarket retailers reported that Lion King merchandise was flying out their doors this summer, and they expected the momtentum to roar into the fourth quarter when a profusion of other licensed products related to major sell-through titles hits the market this month.

Besides Lion King, key titles with merchandise tie-ins will be Jurassic Park, Snow White, the Flintstones and Beethoven's 2nd.

Licensed products related to the theatrical release of the Lion King are expected to sell well through the end of the year, and consumer acceptance of Snow White licensed merchandise is assured, retailers told SN.

Food retailers will face the double challenge of savvy selection at the right price point and allocation of display space.

Pick 'n Save has committed to a special display of Snow White licensed products in the video departments of its corporate stores in the fourth quarter, according to Jodi Tyler, vice president of merchandising and video specialist at Pick 'n Save, a division of Roundy's, Milwaukee.

Some Pick 'n Save video departments have locked glass cases in which licensed merchandise can be displayed.

During the fourth quarter, those cases will contain Snow White figurines and an opened pack of Snow White trading cards, so customers can see exactly what is available, Tyler said.

Stores that do not have the glass case will display these products near the register in the video department, she said.

"These items are small and can be slipped into someone's pocket too easily. Having them at or near the register reduces shrink and also boosts impulse sales, because the customer is more likely to notice them when making a purchase," Tyler said.

The stores have been carrying licensed figurines (from Applause) that tie in with videos since December 1992, and this year introduced licensed trading cards, she said.

"The figurines have done very well as a sidekick to the videos. We will definitely do more. We try to merchandise the trading cards as impulse items. We look for a price point under $2," Tyler said.

Pick 'n Save was hesitant to carry Lion King licensed products because they were not tied to a video, but the items have done well on the strength of the theatrical release, she said.

"We are looking at keeping the Lion King merchandise because it is still riding a wave and we want to stay with it," Tyler said.

Stanley Stores, Bay City, Texas, expects to carry items related to Snow White, depending on what is available, said Andy McPheeters, nonfood buyer and merchandiser.

"Dolls are fairly common, but it would depend on how realistically they are done. We have carried some Lion King merchandise that has done really well. The Lion King is hot right now. We did not do much with Flintstone items," he said.

Price is also a factor in selecting licenses merchandise, McPheeters said.

Stanley Stores created excitement in the stores with a drawing for large Lion King stuffed animals, he said. The stuffed animals, valued at about $400 each, were displayed in the grocery area of the store.

"We prefer to display licensed items in the video department. How we display a licensed product depends on what it is. We are trying different approaches to see what is more successful. What works one time may not work another time," McPheeters said. Sales of licensed products count as video department sales, but are a "very small factor" in total department volume, he said.

Matt Dillon, video director at Scrivner's Boogaart retail division, Concordia, Kan., said he expects licensed products to be at least twice as big in the fourth quarter this year compared with last year.

He attributed this to the large number of hit movies to be released on video in the fourth quarter.

The retail division stores have been carrying some Lion King merchandise, but expect to bring in additional items. The stores always have a good selection of Disney licensed products, he said.

"We try to stay below $5 with licensed product price points. We take a 25% to 30% markup on the items. We offer things like sipper straws, caps, stickers, pencils, small animals and figurines," Dillon said.

The items are usually displayed in the video department, wherever space can be found. Small items are displayed on the counter there, which prompts impulse sales, Dillon said.

"Licensed product sales are not really a big help to video department sales, but there is a small income for us there. We expect Snow White licensed products to do well in the fourth quarter, but it will be tough to beat Lion King," Dillon said.

The video supervisor at a Midwest grocery wholesaler, who asked not to be named, said he expected licensed products that tie in with Lion King to be strong, as well as Snow White, followed by Jurassic Park.

"We are cautious in that area because a licensed product can make money or lose a lot of money. It comes on strong, but when it stops, it stops. Whoever has the inventory when it stops is in trouble. We carry these products but we try to choose those that are most consumable and have a good track record. For example, we would carry pencils and napkins, but nothing off the wall. We also try to keep on the lower end of the price range for greater impulse sales," the video supervisor said.

Sales of licensed products are credited to the general merchandise department.

"If the video department had space, we would like to display the items there, but the type of store we do business with does not have a separate register in the video department, so the items are rung up as general merchandise," he said.

Stores with enough space may create displays of the videotape as centerpiece surrounded by licensed products in the video department during the fourth quarter, the video supervisor said.

However, most of the stores are more likely to scatter licensed product displays throughout the store, wherever space can be found -- on clipstrips, endcaps or freestanding shipper displays, he said.

"Our stores will probably allocate more display space for licensed products in the fourth quarter this year because of the strength of the videos and movies they are related to: -- Snow White, Lion King and Jurassic Park," the video supervisor said.

Angeli's, Menomonie, Wis., plans to bring in some Snow White licensed products and will continue carrying Lion King candy bars, which have been a big seller, said Steve Gretzinger, video coordinator. "We have been through three shipper displays of Lion King candy bars already. We will set up the shippers both in the grocery area and in the video department during the fourth quarter. This is the first time we have carried licensed products for a movie before it was released on video," he said.

"Snow White should be great," Gretzinger said. "Based on past experience, we are sticking mostly with Disney and anything that makes more than $100 million. The Flintstones movie would be borderline."

In the past, Angeli's has offered such licensed products as candy and plush stuffed animals, but the stores have had only limited success with figurines, Gretzinger said.

He said licensed products were "a pretty big contributor" to department sales and carried a "fantastic margin," in the 40% to 50% range.

Sandy French, video coordinator of Thrifty Food Stores, Burlington, Wash., said margins on licensed products are about 50%.

The stores display licensed products on a plexiglass spinner rack set up in the video department, provided by its licensed product supplier (Applause), she said.

"Right now, we have figurines and stamp printers for Lion King. We may order pencils and straws. Some stores have little stuffed animals. Some have coffee mugs. The items are rung up as video purchases. Licensed products probably account for about 5% of video department sales," French said.