POP CULTURE 1997

RICHARD TURCSIK

Retailers are putting some fizz back in their soft-drink departments.

In an effort to stem sales being lost to mass merchandisers, membership clubs, beverage wholesale outlets and even drug stores, supermarkets are giving soft drinks a renewed emphasis.

Several chains are creating a destination category with "Pop Shops," an area set aside on the heavily travelled perimeter of the store where an extensive array of soft drinks are merchandised with other beverages and snack foods to create a one-stop beverage destination.

Acme Markets, Malvern, Pa., is one such chain. As previously reported in SN, the division of American Stores Co., Salt Lake City, has installed Pop Shops in several of its newer stores.

The Pop Shops average 600 square feet, and are located in a high-traffic corner. In the department, soda is merchandised on large pallet displays. Cans and bottles of soda are also displayed on perimeter shelves. Snacks are featured in the center of the department and along two perimeters. New Age beverages and bottled water are also merchandised out of the section.

Officials at Acme did not return calls seeking comment, but one of the chain's suppliers said the best-selling 2-liter and 12-pack items are merchandised from the department.

"It gives the dimension of being a good value," the supplier said.

Along with Pop Shops, other retailers are paying more attention to the category by moving their soft-drink aisles further up in the shopping pattern and giving more emphasis to endcaps and other high-traffic areas. And many are building sales by placing coolers at checkout counters and in the deli department to capture last-minute impulse sales.

"The soft-drink category is very important to the retailers, and is one of the top five categories in the store. Retailers want to maximize that potential," said Mark Demuro, senior consultant at Meridian Consulting, Westport, Conn. Demuro said several factors, including price and location, drive soft-drink sales.

Because soft drinks often are an impulse purchase, many retailers are putting them in places where people would most frequently travel, including the periphery of the store, at end aisles and at the checkout with cold product, said Gary A. Hemphill, vice president of information services at Beverage Marketing Corp., New York.

Hemphill said the major manufacturers, namely Coca-Cola and Pepsi, have developed planograms and category management programs to help retailers maximize the category.

Strategies like the Pop Shop idea enable retailers to compete more effectively with the big beer and soda outlets, said Demuro of Meridian Consulting.

"This is consistent with many retail trends that, in essence, create space within their formats, dedicated to key categories, to better merchandise the business," Demuro said.

Willard Bishop, president of Willard Bishop Consulting, Barrington, Ill., said Acme likely borrowed the Pop Shop concept from its sister chain Jewel-Osco in the Chicago area. Jewel-Osco and Dominick's Finer Foods, Chicago's other dominant chain, have had similar departments for several years. Officials at both chains could not be reached for comment.

In Chicago, Jewel frequently promotes soft drinks with hot prices for its frequent-shopper card members, Bishop said.

Leominster, Mass.-based Victory Super Markets, has also installed a Pop Shop-type department in an alcove in its new store in Kingston, Mass., which opened in October.

"It allows us to have a display area where we can display cases and case lots," Steven DiGeronimo, head merchandiser, told SN.

He also said Victory is looking to build sales by putting more cold soft drinks up in the front of the store. The drinks are merchandised in self-service coolers as opposed to the standard vending machines.

Bishop said such front-end merchandisers have been effective at helping supermarkets win back market share that has been lost to convenience stores.

Mitch Meyers, chief operating officer of Zipatoni Co., a St. Louis-based consulting firm, said tactics like installing checkout coolers will help retailers win back sales from other classes of trade.

"Grocery stores are feeling the pinch from that competition, as well as gas stations which stack cases outside," she said.

Meyers added that even retailers like Wal-Mart have stepped up their merchandising of beverages, all to the detriment of the supermarket.

Tom Roesner, beverage buyer for Seaway Food Town, Maumee, Ohio, said his chain will test new merchandisers from Pepsi in two stores. The merchandising units, which probably will be put in the back of the store, will also feature refrigerated store-made deli pizzas and cold New Age beverages, in addition to 2-liter bottles and 12-pack cans of Pepsi products.

"This will be going in the stores probably around June 1. We will test it through the summer and probably for the rest of 1997. We will track the results and see how it does. If it is successful we will probably expand it to other stores," he said.

John Banocy, direct-store-delivery buyer for Shop 'N Save Warehouse Foods, Kirkwood, Mo., said his chain is in the process of moving its major-brand soft drinks from in-aisle to endcap displays, at the insistence of the local bottlers.

"So far we have been taking 8 feet off of each end of the aisle, and putting a massive display of 2-liters on one end and 12- or 24-packs on the other end," he said.

Jon Kramer, president of J. Brown/LMC Group, Stamford, Conn., said, "One of the travesties of the last 15 years is that soft drinks have become a loss leader.

"It is part of the whole trend of grocers making money by buying products from manufacturers, rather than selling them to consumers.

"Retailers have to tie in the soft-drink purchase as part of the home-meal replacement strategy or an impulse purchase," he said.