POSITIVE CHARGES

JOEL ELSON

The main fuel powering battery sales these days is price, say most retailers and wholesalers.

Yet the higher-priced, supercharged batteries, marketed with labels like Advanced Formula, Maximum, Plus and Ultra, are driving category dollar volume up.

For the 52 weeks ended March 28, 1999, battery dollar volume advanced to $2.3 billion, up 11.2%, as units rose 3.7% to 568 million, according to data from Information Resources Inc., Chicago. At $1.1 billion, up 15%, mass-market retailers produced the most dollar volume. Together, food and drug matched that volume. Sales of batteries at supermarkets rose 10% to $559 million, and drug-store sales were up 5.4% to $587 million.

While shoppers are buying the higher-priced batteries designed for high-drain electronic devices, it is the price-conscious shoppers that retailers are targeting in their promotions and by offering a third tier of value-priced brands.

"Whatever is on sale at the best price is what is attracting consumers to make battery purchases," said Jim Key, vice president of marketing at Community Cash Stores, Spartanburg, S.C.

As other supermarkets do, Community Cash places secondary spinners and dump bins at high traffic areas and checkouts that alert shoppers to special pricing and feature packs. The category is promoted with ads, freestanding inserts and cents-off coupons, Key said.

The third-tier brand also is boosting volume for most chains. "If you don't have that value niche, you're in trouble," stressed Thomas Shively, head buyer for Supervalu's Northeast general merchandise division, Easton, Pa.

Suppliers' promotional efforts to gain market share have conditioned shoppers to seek out the best prices in batteries.

"It's a situation that was created by manufacturers in their attempts to acquire market share," stated Claude Millet, general merchandise buyer for Associated Grocers, Baton Rouge, La. Associated retailers are able to spike battery sales about 10% during monthly Power Buster promotions featuring either Eveready, Duracell or Rayovac batteries, said Millet. These promotions are supported with ads, shelf-talkers and floor displays.

On sales of Power Buster features, co-op retailers work on a 10% margin, rather than the regular margins of 28% to 38%.

Last year, in a move to broaden battery selection, Associated added Rayovac. This brand helped boost sales 20%, said Millet. "Rayovac, which is also a known national brand, and Shurfine appeal to customers looking for mid-range pricing that is lower than the top selling lines."

Most retailers agree that heavy supplier ad and promotional support for the advanced-technology batteries is raising awareness and driving dollar value higher.

Batteries like Ultra and rechargeable batteries "will become a larger piece of the battery market. New sales will come from the growth of the cellular and cordless phone market," said Key.

"Duracell has made people realize its higher-technology Ultra is worth the extra cost, and the products are doing real well despite their 20% higher price," said a nonfood director at a Pennsylvania food chain, who asked to remain anonymous.

Kathy Hyman, battery category manager at Affiliated Foods, Amarillo, Texas, also confirmed the new-technology batteries are selling well. "People are buying Ultra AA and AAA batteries. But if they perceive that they aren't better or last longer, they'll go back to regular alkalines," she said.

At Olean Wholesale Grocery Co-op, Olean, N.Y., sales are divided between Eveready, Energizer alkaline and Duracell alkaline. Movement depends on retail pricing, said Linda McDonald, general merchandise buyer.