NO FLASH IN THE PAN

JOEL ELSON

Single-use cameras continue to breathe new life into retailers' photo sales. Last year the one-time-use camera segment was the hottest photo category of the year with a projected 40 million units sold, according to the Jackson, Mich.-based Photo Marketing

Association's 1993-1994 Industry Trends Report. This year units are expected to soar past the 50 million mark and contribute $1 billion to the $12 billion amateur photo market.

"Were it not for single-use cameras, neither Kodak nor Fuji would be where they are today. This camera is a large portion of their business and where their main growth is coming from," said Dan Black, buyer-merchandiser of general merchandise at Raley's, West Sacramento, Calif. For many chains polled by SN, the category represents 20% to 25% of their overall film sales. Some retailers also report making 30% to 35% margins on disposable cameras.

At Associated Food Stores, Salt Lake City, disposable camera sales are growing very fast. Said Kit McMullin, seasonal and promotion buyer at Associated, "Orders to retailers have doubled from 72 to 140 shippers of some camera models for certain months tracked vs. a year ago."

Raley's Black said single-use camera sales were up 25% last year, and account for 20% to 25% of the chain's overall film sales. "The category has steadily increased as our film sales have tapered off and been basically flat," he added. The photo category manager of a large Midwest chain, who asked to remain anonymous, said, "Disposable cameras are probably the largest growth segment of the film category right now. Our margins are running around 25% to 30%, a little bit higher than our film, and we are getting higher gross dollars."

The strength of single-use sales also is favorably affecting supermarkets' film-processing business. "Just as with film, the more we sell, the greater the opportunity to process the cameras that customers bring back for prints," said Don Beairsto, photo specialist at Hannaford Bros., Scarborough, Maine. The first single-use camera marketed in the United States was the Kodak Fling, introduced in October 1987. Clearly, Kodak has captured the lion's share of category sales, with nearly 79% of single-use purchasers buying the Kodak brand in 1993, according to PMA statistics. Fuji captured 17% of the single-use cameras purchased that year. Quality, ease-of-use and convenience can explain why consumer demand is high for single-use cameras. Manufacturers have improved the cameras each year. The latest models on the market are lighter, smaller, more durable and better designed than those first introduced. They also include high quality film for results that usually exceed consumers' expectations.

"It's getting high usage and growing rapidly in popularity with people who were never comfortable with a camera. They also don't have to worry about damaging a camera in outdoor activities," commented a nonfood merchandiser from a Southeast chain, who asked for anonymity. But manufacturers also are aggressively promoting and advertising the category, and they are getting strong follow-through at retail. Holiday and seasonal occasions have been particularly good promotional periods for one-time camera sales. Some manufacturers have even introduced party packs, and special-edition cameras tied into major sporting events and even Disney.

Such promotions have helped triple sales at Fleming Cos.' general merchandise division, Memphis, Tenn., said Phyllis Liversiedge, photo buyer. Manufacturers have promoted various models during certain periods "such as one for vacations, a weekend camera, and Polaroid's talking camera, priced at $15, at Christmas. This has enhanced exposure to the overall mix," she said.

Arranged on power wings and at gondola endcaps, "people will pick them up for vacations, trips to the beach and for snapping pictures of guests at wedding receptions," she added. Liversiedge said a nine-month sales contest for a five-day Caribbean cruise also helped lift retailers' single-use camera volume during the contest period. Although single-use sales peak during seasonal and holiday periods, Vic Anthony, general merchandise buyer at Abco Foods, Phoenix, said, "We're seeing it [sales] all year long." Single-use camera sales are growing about 4% a year at Abco, generating 30% to 35% margins, and are now included in many seasonal promotions "with coolers, outdoor and lawn products, and at back-to-school and with Father's and Mother's Day displays," said Anthony. Supermarkets, which sold 13.9% of the single-use cameras in 1993, behind mass merchandisers and drug stores, and processed 16.3% of the single-use film, according to a PMA survey, are in a good position to take advantage of cross-promotional opportunities and further increase their share of the market.

And, according to one manufacturer, the market still has a lot of growth potential left since research indicates that only 25% of American households have ever used a single-use camera. Here is what retailers and wholesalers said about single-use cameras.

Don Beairsto

photo specialist

Hannaford Bros.

Scarborough, Maine

Our Kodak and Fuji single-use camera sales are increasing. We're especially seeing big increases in the wide-angle panoramic models.

Kodak is first in sales of single-use cameras, with flash models having the most sales. Just as with film, the more we sell the greater the opportunity to process the cameras that customers bring back for prints. The cameras are merchandised on J-hooks at film endcaps near our one-hour minilabs, and in other stores close to the service center. They have a built-in demand. At certain times of year, such as graduations and in summer, we increase facings and cross-merchandising with bottled water and other tie-in locations. The cameras are priced at $8 to $12. We get a lower profit on single-use sales than film. But the cameras are a higher ticket item. Traditionally, we drive a hard bargain for our cost per roll of film, and don't go back to the manufacturers for promotional dollars for individual items.

Phyllis Liversiedge

photo buyer

Fleming Cos. general merchandise division

Memphis, Tenn. The single-use camera segment has been very successful. Sales have tripled in the past year with promotions that focused attention on different models. Stores featured a different model every holiday, one for vacations, another as a weekend camera. At Christmas, Polaroid's talking camera sold at $15. Stores set up the different disposable cameras on power wings at gondola endcaps. Shoppers will pick them up for vacations and trips to the beach and for wedding receptions. A Fleming sales counselor whose stores met a single-use camera sales quota won a five-day cruise for two to the Caribbean. The competition helped drive sales during the nine-month contest period. The $2,000 cruise was funded by advertising and co-op allowances, and field counselors and merchandisers made sure all checkstand clip strips and other displays were refilled weekly. This moved products and generated impulse sales.

Craig Carpenter

advertising director

Harris Teeter

Charlotte, N.C.

We carry Kodak and Fuji single-use cameras. Cameras are merchandised with film. We've had disposable cameras for a year. Kodak with flash, which we added last September, is currently our No. 1 seller. We've seen steady interest in these products, and expect this momentum to continue. We will occasionally promote new packages or seasonal additions.

Kit McMullin

seasonal and promotion buyer

Associated Food Stores

Salt Lake City

Disposable-camera sales are growing very fast. Orders to retailers have doubled from 72 to 140 shippers of some camera models during certain months tracked a year ago. We do very well with panoramic cameras in the summer. Many tourists use them at Bryce Canyon National Park and other parks and canyons in our region. We carry Kodak and Fuji models in daylight and flash, panoramic and underwater, and a private label.

Vic Anthony

general merchandise buyer

Abco Foods

Phoenix

Our disposable-camera sales have grown about 4% a year and we get 30% to 35% margins, which is much better than the 16% to 17% we get in film. Consumers like the convenience of the camera, which is now a year-round item in our area with the number of tourists that visit here during summer and winter. This camera has become part of the advertising package from all manufacturers. The freestanding inserts with coupon, newspaper ads, in-ad coupons and tear-off coupons they use are good for sales. Each [manufacturer] offers promotions four to five times a year. Spread out through the year, there is some promotion almost every couple of weeks.

Dan Black

buyer-merchandiser, general merchandise

Raley's West Sacramento, Calif.

Our single-use camera sales were up 25% last year, and account for 20% to 25% of our overall film sales. They've steadily increased as our film sales have tapered off and become flat. Kodak single-use cameras do about 75% of sales, and Fuji and Polaroid account for the balance of the volume. We merchandised them in high-traffic areas.