POWER TO THE PIZZA

RUSSELL REDMAN

Frozen pizza's mushrooming sales are prompting a number of supermarket chains to give the category a bigger slice of the promotional pie. But that slice may not be as big as it should be.

While stores are ensuring frozen pizza is advertised routinely -- weekly, in some cases -- a study released in May indicates retailers are not giving the category all the attention warranted by its increasing popularity and its keen response to promotions.

The study, conducted by Information Resources Inc., Chicago, said pizza is growing faster than any other frozens category. From 1989 to 1994, the category's dollar volume surged 40%, compared with 13% for frozen food overall. And the category's strong performance is continuing. Frozen pizza was up 7.4% in dollar sales and 6.2% in unit volume for the 52 weeks ended May 21, IRI reported.

Nearly 55% of all frozen pizza sales occur during promotions, according to the IRI study, conducted for the National Frozen Pizza Institute, McLean, Va. The results of the study also show the category has the highest sales lift (656%) of all frozen foods when featured in an ad and on display. "You see a definite bump," said a frozen food buyer at a large Southeastern chain.

Though retailers have found that bump to be beneficial, more attention and space for pizza still are needed. Among frozen foods, pizza generates the highest return on inventory investment and is behind only ice cream in sales per square foot -- yet it gets 30% less space than its sales warrant, the IRI study found.

Retailers seem to have increased their promotion of frozen pizza, although it may not be at the level IRI suggests.

"We've been promoting pizza highly lately. We've been doing the reduced retail and making sure it gets into our newspaper ads," said the buyer at the Southeastern chain. "And we have seen considerable growth. We've been growing in almost double-digit figures. At least every other week I have some type of pizza running in an ad," she said, adding that multiple pricing has spurred movement.

New brands have triggered more frozen pizza sales and advertising at Save Mart Supermarkets, Modesto, Calif., said Pat Brooks, director of frozen food, dairy and deli.

"With the rollout of Tombstone, Tony's and Red Baron here in the last two years, we've been on an aggressive program to promote the larger-sized pizzas," he explained. "We're advertising on a regular basis and rotating the brands. We do a big job with the Mr. P's pizza as the [low] price pizza. And then we advertise the 12-inch Tombstone, Red Baron and Tony's pizza regularly.

"I try to advertise the lower-end pizza once a month, and then we try to run one of the larger pizzas at least once a month," Brooks said. At H.G. Hill Stores, Nashville, Tenn., frozen pizza promotion has become more competitive rather than more frequent, said Bryan Ryckeley, grocery and frozen food buyer. "Mainly, it's been stepped up in price [reductions]," he said.

Still, advertising has been heavy, he noted. "We're seeing a whole lot of promotion, particularly with Southern Specialties, which has a boxed deluxe pizza. They've increased their pizza size and are doing a lot of promotion. As a result, Pillsbury, with their Totino's, is having to combat that."

Bill Campbell, frozen food merchandising manager at Associated Food Stores, a Salt Lake City-based wholesaler, said promotion of his major brands, such as Jeno's and Totino's, hasn't met demand. "They have not really been too aggressive with their advertising to keep up with what's been going on in the market. So some of that has been lagging a bit," he explained. Associated recently introduced frozen pizza under its Western Family private label, Campbell said, adding that he expects new products to drive the category. "There's going to be a lot of promotion coming in when Michelina's brings out its single-serve [pizza]. It's going to be another boon to the category."

However, at John C. Groub Co., Seymour, Ind., extensive promotion has sliced frozen pizza profits, said Larry Miller, grocery buyer and merchandiser. "We've had to basically back off any [more] promotion because we're already priced so low every day that anytime we promoted it, it was just killing our gross. So we've cut back quite a bit on our promotion of the more popular pizzas," Miller said, citing such brands as Tombstone, Red Baron and Tony's.

"What I've done is gone from promoting the items that were most popular and already low-priced to doing more with the [less-popular] items: the microwave pizzas, different sizes, etc."

Snug freezer space has made it tough to enlarge and more effectively merchandise the already sprawling frozen pizza section.

"The main problem with pizza is space allotment. If I had more

space, I could do more business," the buyer at the Southeastern chain said. "I need the space to grow a lot because [direct-store-delivery] brands have come into our stores in the last two years. They have really helped grow the category because they do a lot of marketing to make people aware of it.

"We are working on realigning some of the frozen section and will increase the amount of space for pizza," she said. "Probably every other day I get a call from somebody who has another new pizza."

To fit the DSD items, other pizzas have been sifted out, she said. "Mainly, we've limited the economy items: Jeno's, private label, etc. In a lot of our stores, you have one or the other; you don't have both."

Save Mart already has expanded pizza space but plans to add more. "A lot of our snack items are in the pizza area, and we're looking to relocate our snack section to give us an extra door or two for pizza," Brooks said. "On average, we have five or six doors [for pizza], depending on the store."

H.G. Hill also is looking to accommodate the expanding frozen pizza and snack categories. "We are probably a little underspaced on pizza and snacks," Ryckeley said. "Some space would probably come out of the entree/ dinner section."

Groub's Miller said the space devoted to pizza is "not a lot for the sales," noting the segment gets 10% to 15% of total freezer space. Based on scan data, some space has been added for frozen pizza at newer stores, he said.

Upright door cases were the display method of choice for retailers SN contacted. Buyers and merchandisers said they preferred to have pizza propped up on its side for better visibility, but space often does not allow that.

"You want the product so you can see the whole face of it. You can't do it everywhere. You have to decide which ones you're going to do and which ones you're not," the buyer at the Southeastern chain said.

"It does make a difference, but even when they're in the coffins, you still notice the pizza," she explained. "That's why in some of our stores we have put the pizzas in the coffins and dedicated more room, for example, to dinners and entrees."

Signs, shelf tags, endcap displays and product sampling help showcase frozen pizza, retailers and wholesalers said. But the space-starved category still relies on ads, they noted.

"When you're in frozen food, there's not too many creative ways you can merchandise stuff other than to decorate the case and put up signs to draw attention to it," said Danny Wells, frozen food buyer at Minyard Food Stores, Coppell, Texas.

At four supermarkets in New York's Nassau County -- Foodtown, Waldbaum's, King Kullen and Pathmark -- frozen pizza is advertised consistently and is overflowing its display space.

SN tracked frozen pizza advertising and merchandising at four locations, one from each chain, over a four-week period from July to August. Officials at Foodtown and Waldbaum's reported that pizza promotion in that time was normal. Pathmark and King Kullen officials declined to comment.

All of the stores advertised frozen pizza weekly, sometimes twice a week between a circular and a newspaper ad. Two or more brands were often featured in the same ad, with a rotation of different brands, sizes and varieties from week to week. King Kullen also had a weekly in-store, no-clip-coupon flier that usually included a frozen pizza.

Most specials were price reductions, such as half-price sales, but buy-one-get-ones and multiple pricing also were offered. Advertised brands typically were featured in end displays or were highlighted with point-of-sale signs.

Pathmark made extensive use of end displays. For example, one week it had Celeste in an endcap bunker, McCain Ellio's in an endcap case plus 27-slice Pathmark and Ellio's pizza in a Big Deals coffin across from the main pizza section.

King Kullen drew attention to a three for $5 Tombstone special with a sign taped to the upright door. An adjacent sign read, "Tombstone will donate 5 cents to Little Flower Children's Services of New York for every pizza purchased at King Kullen during July and August."

Similarly, Foodtown called attention to Tombstone with large signs atop endcap bunkers. One read, "Tombstone and Foodtown introduce Tombstone French Bread Pizza." The other, promoting a free baseball card in specially marked Tombstone packages, read, "Play Ball with Tombstone" and urged customers to "Stock Up."

Advertised brands among the four stores included Tombstone and Ellio's -- by far the most promoted brands -- plus Celeste, Tony's, Jeno's, Tree Tavern, Totino's, Mr. P's and Celentano. Private-label pizza also was advertised, including Pathmark and Pathmark Preferred, King Kullen and Master Choice (Waldbaum's).

At the four stores, pizza snaked into other frozen food sections. At Foodtown, a large hanging sign indicated the pizza section of the frozen food case, but pizza stretched out into the pasta, snack, seafood and dinner/ entree sections. Weight Watchers pizza was with the brand's entrees in a separate section, as were Kineret and Empire kosher frozen pizza.

King Kullen did not have a sign marking its lengthy frozen pizza section, which lined the upright for 10 doors. Most pizza lay flat stacked at the bottom of the case, hampering the section's visibility. Door signs indicated specials, however.

Pathmark also did not have signs or markers to denote the pizza section. But pizza was very visible in the case because most brands were propped up on their sides, with Tombstone and Pathmark Preferred pies, for example, seated in logoed plastic stands. Likewise, Waldbaum's made its frozen pizza stand out by displaying most brands facing out toward customers. Overhead signs called shoppers' attention to the pizza section. Empire pizza was displayed in a separate, smaller area with kosher frozen food.