POWERING UP

Stephanie Loughran

Retailers are putting more power into their battery sets. Batteries with newer technology, larger bulk quantities, and more visibility and promotional muscle are adding juice to sales.

Suppliers are producing disposable and rechargeable batteries specifically for digital products like cameras and camcorders. Meanwhile, supermarkets are merchandising multipacks with more batteries to get higher rings while catering to consumers' demand for convenience and portable lifestyles.

"It keeps growing and growing," said Bill Foster, assistant nonfood buyer, Strack & Van Til, Highland, Ind. "Everyone is going to AAs and AAA-size batteries because of channel changers, digital cameras and pagers. Four-count blister packs were hot, and now it's going to multipacks in eight-count and 16-count [quantities]. In this area, we're promoting that for a higher dollar ring."

Martin's Super Markets, South Bend, Ind., advertises four-packs and eight-packs once a month, said Ken Bruce, director, nonfood. In the past, the retailer promoted tray packs featuring 20-count packs as an in-and-out promotion. "Multipacks are the big thing and that's what you advertise," Bruce said.

Overall consumer electronic industry sales totaled $95 billion last year, according to the Consumer Electronics Association, Arlington, Va. Moreover, CEA estimates that unit sales of digital cameras will increase 31% this year, reaching 10 million units. By 2005, CEA forecasts that sales will hit 16.3 million units.

Top battery players like Duracell, Bethel, Conn.; Energizer Holdings, St. Louis; Panasonic, Secaucus, N.J.; and Rayovac, Madison, Wis., continue to enhance their battery offerings with high-performance batteries suited to these high-drain products. A slew of new offerings for digital gear continues to create more options for consumers and more merchandising punch for retailers.

"Digital is still pushing the market," said Gordon Thompson, general merchandise buyer, Rosauers Supermarkets, Spokane, Wash. "We're pushing multipacks. On popular ones like AA batteries, [customers] can save more money in the long run."

Alkaline battery sales dipped 3.8% to $1.3 billion for food, drug and mass channels excluding Wal-Mart Stores, Bentonville, Ark., during a 52-week period ending April 20, 2003, according to Information Resources Inc., Chicago. Alkaline battery sales remained steady but flat in the supermarket channel at $609 million for the same 52 weeks. However, non-alkaline batteries, including the nickel metal hydride (NiMH) chemistry used for rechargeable batteries, totaled $3.27 million in the food sector during that 52-week period, a sales uptick of 14.6%.

"You'll see the digital trend continue, as people are going to want those batteries that last longer for digital products in general," said a nonfood retail executive, who asked to not be identified. "People are either buying cheap, low-end batteries or a step up with Duracell and Energizer, or moving to something that says 'digital' on the package."

Heightened homeland security concerns caused a "pantry-loading" effect for batteries in recent months, said retailers.

"Stockpiling for emergencies has become more common in the last one or two years," said Thompson.

However, Joseph Altobello, senior analyst, consumer products, CIBC World Markets, New York, said this trend is over.

"Pantry-loading is now behind us, and demand for batteries is slowing," he said, confirming the IRI numbers. "If you're buying a bunch of batteries and throwing them in your pantry, it doesn't matter what merchandising strategies are out there. It's very hard to come up with new innovations at this point."

Weather-related emergencies also warrant battery stock-ups, depending on the different parts of the country. The spring storm season in Indiana and other parts of the Midwest have brought about extra battery purchases, said Bruce of Martin's Super Markets. " They keep on hand extra C- and D-type batteries for flashlights [because] power outages are pretty common around here."

In addition to advertising batteries once a month in Martin's in-store circulars, the retailer promotes them in the film department and in other areas of the store on a seasonal basis. During Christmastime, Bruce said the batteries are promoted near the toys.

"Supermarkets need to take advantage of the high-impulse nature of the category by putting them in high-traffic areas like the front-end and checkout lanes, and cross merchandise them with other products like school supplies, the seasonal toy section or in the sun care aisle [for portable music players on the beach]," said John Daggett, director, marketing services, Rayovac.

Grant Blanchard, nonfood buyer, Macey's, Sandy, Utah, said the retailer posts clip strips of Energizer batteries in almost every aisle.

"Have batteries on sale [frequently] and on checkstands. Make them easy to see so customers buy them for impulse," Blanchard said.

Strack & Van Til puts clip strips near toys or in the seasonal aisle, said Foster. The chain also houses batteries on 8-foot endcaps, and places two endcap displays back-to-back to create "one big battery rack," he said.

"What's driving the overall category is that consumers have fully embraced their portable lifestyles," said Daggett. "Consumers have more battery-operated devices in their households today than a few years ago and the penetration of high-tech and high-drain devices like digital cameras will fuel growth of rechargeable nickel-metal hydride batteries."

"People are clamoring for batteries for digital cameras, because these cameras eat up batteries," said Christine Denning, marketing and communications specialist, Panasonic. "Food retailers should do all they can to show that they are customers' No. 1 destination for batteries," she said, such as offering a variety of battery options at a consistent value.

In an example of a cross promotion, next month Panasonic will participate with all 185 ShopRite Supermarkets, a banner of Wakefern Food Corp., Elizabeth, N.J., in a sporting event tie-in with the ShopRite LPGA Classic in Atlantic City, N.J. In support of the golf tournament, the "Seize the Savings" $1 coupon promotion will cover 3,500 displays containing all sizes of Panasonic alkaline batteries for digital electronics, said Denning.

Meanwhile, Duracell plans to introduce Prismatics batteries for digital cameras and other portable audio devices later this year.