ON THE MOVE 2006

LIZ PARKS

Portable merchandisers can be a retailer's best friend.

The merchandisers, strategically placed near checkout lines and other high-traffic locations, attract customers with rotisserie chickens, barbecue ribs, fresh bread and other prepared foods. In fact, there's no better way to generate incremental sales from customers who might otherwise stop at a quick-service restaurant or diner on their way home, retailers said.

"They have eye appeal and they make a nice presentation," said Dan Lautt, purchasing agent of back-room equipment for Carteret, N.J.-based Pathmark Stores. "Certain items can sometimes get lost when they're only merchandised in the deli, but when we have them up front, customers can smell and see the food as they come in, and they often make a note to pick something up on their way out."

Abingdon, Va.-based K-VA-T Food Stores, which operates 96 Food City stores, uses the merchandisers primarily for promoting baked goods. The stores also use heated displays that merchandise rotisserie and fried chicken at its checkouts. There, sales of the fully cooked chickens typically are 40% higher than sales of chickens merchandised in the standard hot food displays, said Phil Gass, K-VA-T's bakery/deli director.

"We try to merchandise it close to where the customer is going to buy it, so we can retain as much of the heat as possible since they will go home and eat it," he said.

Chandler, Ariz.-based Bashas' Supermarkets places the merchandisers adjacent to the delis or in the lobbies at the store entrances.

"Our customers can just come in and grab a rotisserie or fried chicken, turkey breast, meat loaf, ribs, and they don't have to wait in line at the deli," said Scott Triplett, vice president and general manager of perishables. "It also creates sales that do not require service, which enhances our productivity."

When Bashas' started using the portable units almost five years ago, sales of rotisserie chicken tripled, he said. "You can get a [return on investment] pretty quickly just based on the turns and the profitability of the chicken."

When they commit to a new piece of equipment, retailers said they expect to see their investments pay off quickly. That's a realistic expectation, according to equipment manufacturers, who noted it's possible to see positive returns sometimes within a few weeks.

Retailers with smaller stores have special needs. Brian McGregor, owner/manager of Archie's IGA, one of three IGA stores operated by St. Maries, Idaho-based McGregor Stores, said having a portable heated unit would be valuable but he'd need a merchandiser to fit his stores, which average 26,000 square feet.

Bob Grasch, co-owner of Grasch Foods, Brookfield, Wis., thinks the merchandisers could be a profitable investment but he, too, needs a unit small enough to work in his 28,000-square-foot store. He also wants to be sure he can get an ROI in six to 12 months, Grasch said.

The potential profits on prepared foods are high enough to make it worthwhile for retailers to make the investment, manufacturers told SN.

Some retailers can sell rotisserie chicken "for five times what they can sell a raw chicken," said Todd Griffith, national sales manager for Menomonee Falls, Wis.-based Alto-Shaam. "There is a tremendous margin increase by offering hot foods, and the more diverse the menu, the larger the sales potential."

Retailers can see a return on investment on a portable merchandiser for a high-volume store in 30 to 60 days, Griffith said. "In smaller-volume stores, it could be six months to a year. It all depends on how much product they are selling."

One upscale high-volume supermarket chain - using the manufacturer's island merchandisers to cross-merchandise fresh-baked, 12-pack specialty rolls with rotisserie chickens - sold enough rolls to pay for the units in six weeks, said Tim Kasler, marketing director for Eaton, Ohio-based Henny Penny Corp.

A retailer who added a wooden bread basket accessory shelf to BKI's grab-and-go displays featuring rotisserie chickens generated increases of 15% to 25% in its stores, said Ken Goodwin, president of Simpsonville, S.C.-based BKI-Worldwide.

Gass uses hanging baskets on K-VA-T's heated rotisserie displays to merchandise rolls, garlic bread and French bread. "[For] the volume of sales that we do with rotisserie chickens, we get a good ROI," he said.

Any heated product that can be prepackaged can be sold in the mobile food display units including side dishes like macaroni and cheese, potatoes, vegetables and stuffing. Cold unitstypically hold packaged items including imported olives, stuffed mushrooms, stuffed peppers and sun-dried tomatoes.

Pathmark, which merchandises heated packaged chicken in its grab-and-go units, moves them to various locations depending on customer traffic, but most commonly they are at the checkouts or near the deli.

While retailers like Dan Lautt and Phil Gass said they are fairly satisfied with the displays on the market, others would like to see more variety in shapes, sizes and colors.

"I would need mobile displays that are about 2 or 3 feet wide and at about counter height or a little higher," Grasch said. "Then I could move them out by the checkout lanes, and take them to the perimeters such as our deli, meat or produce departments. We have heated entrees in our deli and those displays could help us extend the deli into other areas and capture incremental sales."

At Bashas', Triplett said he's seeing improvements in the products manufacturers are rolling out. "The displays we have are single shelf units with the overhead heater, but I'd like to see some multilevel units with cross-merchandising opportunities for side dishes and warm crusty breads. That would give us more holding power using the same amount of floor space."

McGregor Stores has some electrical outlets in the floors of its stores but mostly in the fresh food departments. "I've never taken the portable displays that we have up by the registers," McGregor said, "mostly because of space and power considerations. I'd like to see the manufacturers make smaller units."

Manufacturers said they have new prototypes in production that next year will take portable merchandisers to the next level.

Alto-Shaam is incorporating a new technology - a thermal kinetic glass - into several heated display units. By moving heat energy through the glass shelves, Griffith said, the technology eliminates temperature variations within the units, creating "a stable holding environment and a longer shelf life" for heated foods. The risk of anyone reaching in and getting burned is also reduced, he said.