MULTIPACKS ARE KING

PAT NATSCHKE LENIUS

The biggest trend in paper towels and bathroom tissue is just that: big. Multipacks are not only what retailers most want to sell; they make up the area where the growth in the paper goods category appears to be.

"Manufacturers in this area are trying to promote larger packs and rolls. Everyone is footballing the four-roll packs and losing money on them. There is a switch under way from the four-pack to double rolls and multipacks of six, nine or 12," said Mike Skowronek, buyer at Copps Corp., Stevens Point, Wis.

At first, he said, consumers were a little put off by the higher price of the double rolls, because they were used to paying 79 to 89 cents for a regular four-roll pack of bathroom tissue. "Consumers are starting to realize the value of double rolls," Skowronek said.

"The sales trend is up and away from the single roll [of paper towels] or four-pack [of bathroom tissue] into larger multiple packs, such as six-, nine-and 12-count packs," said Joe

Czerwien, buyer-merchandiser at Heinen's, Warrensville Heights, Ohio.

There is a move toward the large pack, whether it be a multiple or a big or jumbo or double-size roll, he said. "The consumer doesn't have to buy as many, or as often," he said.

That's a big plus to retailers facing hot and heavy competition for paper goods sales from mass merchandisers.

"The mass merchandisers are eroding our share of the market," said Grant MacLean, pharmacy buyer at Rosauers Supermarkets, Spokane, Wash. "We look at the Target and Kmart ads every week. Some of our stores [compete] with Wal-Mart. Every one of those retailers has a paper promotion on the front or back page every week.

"We have no problem beating them on price," MacLean said. "Because of our proximity to the paper mills, we can buy the products direct and probably get them cheaper than they can. Price is not the issue. We have to continually put these items in the consumer's face at a very good value price to try to discourage consumers from changing their habit of buying at Rosauers.

"We are trying to get out of the four-packs. We want to focus more on multipacks so the consumer doesn't have to make another decision on where to buy next week," he said.

Based on unit sales, the four-pack bathroom tissue is more popular in stockkeeping units sold. However, on the basis of total numbers of bathroom tissue rolls sold, the 12-packs are ahead, MacLean said.

For paper towels, on the other hand, the single rolls still are dominant, he continued. More stockkeeping units of multipack paper towels are being carried and promoted, but on a unit sales basis, the single rolls are still king.

"I would rather sell the biggest package I can possibly sell. That is always the goal. We should be going after the multipack in everything we carry. It connotes value, price, size. It takes a lot of the buying decisions out of there. We want customers to buy everything at Rosauers," MacLean said.

Coborn's, St. Cloud, Minn., has seen mass merchandisers stealing paper sales from grocery retailers for several years now, with paper goods being one of the earliest and biggest targets, said Tom Machula, vice president of merchandising, "We have lost serious market share [in paper goods] to those people. Now we see it happening in food products. Our response is to advertise and offer more value, as hot a deal as we can. We like to go hot on a brand that is not the premium-priced brand. We offer a good mix of the premium brands, but we will run a hot price on an inexpensive brand," he said.

"Unfortunately, paper goods is another category where price gets down to cost or sometimes below cost in order to look good compared with mass merchandisers," Machula said.

"We have always had our eye to what the competition is doing, whether it be a traditional supermarket or mass merchandiser. We always pay attention to what they do. We compete very well. Pricewise, we are very competitive. We promote those items weekly and have always been aggressive on sale prices," said Czerwien of Heinen's.

According to Skowronek of Copps, "The regular jumbo-size paper towel is still important, but consumers are starting to buy more of the multiple packs.

"Overall, the four-pack bathroom tissue is still the strongest item. I would rather sell the larger size because we have the opportunity to make more money on a six-, nine- or 12-pack. Competition is hotter on the four-pack of bathroom tissue. You always have to have a hot price on that. The same is true for paper towels. The multiple packs or larger sizes are not footballed as much as the regular."

However, the traditional package sizes are far from dead, retailers said.

"It is more lucrative for us to sell the standard jumbo roll of paper towel. We can sell them for about three for $1 and break even. In the more premium brands, the price would be 59 to 69 cents for a jumbo roll. That is still what customers recognize and trust," said Machula of Coborn's. Consumers also recognize the value of a four-roll pack of bathroom tissue priced under a dollar, he said.

Copps recently tried promoting the four-count size of bathroom tissue or regular single rolls of paper towels at a special multiple purchase price, Skowronek said.

"We are trying to stimulate customers to buy three or four small packs at a time. If we did that with the megarolls or double rolls, it would be hard to get the sale because the retail might be three for $10," he said.

The paper goods buyer for a large Southeastern chain said larger sizes appear to be growing in popularity with consumers.

"The megarolls are taking over in paper towels and the nine-packs are a big mover in bathroom tissue. In terms of profitability and volume, we would rather sell more of the larger sizes in both categories. Everybody footballs the four rolls of bath tissue. We practically have to give those away. At least we can make a little money on the bigger packs. The same is true for paper towels," he said.

"We don't have many large packs. We have a nine-roll and a 12-pack, but we don't carry the 24- or 30-pack sizes. The mass merchandisers can't do any better than we can in retail price for the nine- and 12-pack, but if they promote a 30-pack and we have a 12-pack, the consumer gets confused about which is really the better deal," the paper goods buyer said.

Lee Salo, buyer-merchandiser at Raley's, West Sacramento, Calif., said the package size most popular with consumers and most lucrative to sell is the multipack of six, nine or 12.

However, the chain competes with mass merchandisers by promoting "valu packs" of 24-count and 36-count and pricing them competitively, he said.

Lynn Herrmann, warehouse buyer at Quillin's, La Crosse, Wis., said double rolls are just starting to show an increase, but the biggest trend is toward multipacks of the standard size.

"From what I have seen over the past six months, the trend is toward max packs in the paper goods line: the nine or 12-count size," she said.

The sales trend is especially strong for traditional four-pack bathroom tissue, but there is a trend toward promoting the nine-pack and 12-pack sizes, Machula of Coborn's said.

"The four-pack seems to be what people still want, or else multiples of the regular four-pack. The double rolls seem to not go as well as the standard four-roll," he said.

There is confusion regarding paper towels because somehow "jumbo" has turned out to be smaller than "big," Machula said.

"The old jumbo single roll was standard. Suddenly we have 'big' rolls, but they are larger than what we called the jumbo rolls. We see some resistance because customers don't know what item we are really talking about when we advertise," he said.

At Xtra Super Food Centers, Pompano Beach, Fla., the best-selling package size for bathroom tissue is the four-pack and the most popular size for paper towels is the single roll, said Jim Malzahn, buyer.

The traditional package sizes are relatively the same as the giant packs in terms of profit margin, he said.

"A few stores in some areas face competition from mass merchandisers, but they are not always a factor. We offer everything that is available. We give customers full variety," Malzahn said.

The number of stockkeeping units in both categories has been flat and is expected to remain at about the same level in the near future, he said.

"During the summer the SKU count will stay where it is or maybe go slightly lower because sales get a little softer. Summer slows down a little for us because a lot of people go north for the summer season," Malzahn said.

Skowronek of Copps Corp. said he expects to see some new entries in the paper goods category as more recycled products are introduced.

Some new entries have increased the SKU count, but that is expected to stabilize in the future, after other companies introduce their versions, said Czerwien of Heinen's.

"If new SKUs are introduced, something has to go [because of] space restrictions," Salo of Raley's said.