SHOP 'N SAVE ZOOMING IN ON NEW RELEASES FOR RENTALS

DAN ALAIMO

KIRKWOOD, Mo. -- A new video department opened by Shop 'N Save Warehouse Foods last month focuses heavily on new releases, with over 75% of its rental inventory devoted to the new titles.

The department occupies less than 350 square feet in a new store in Belleville, Ill. But in that space 2,500 rental titles are displayed in an attractive, bright environment, SN found in a store visit. About 1,900 of the titles were new releases. Shop 'N Save, a subsidiary of Supervalu, Minneapolis, has rental departments in 25 of its 33 stores.

"The new releases drive our business," said Kim Stewart, video specialist.

But the size of the department was a big factor in the retailer's decision to devote such a large portion of the inventory to new releases, he said. In that situation, "you've got a choice. Either you can go heavy on what drives your business, or go with [titles] that just rent occasionally," he said.

The catalog inventory in the store includes mostly children's titles and fast-turning older movies, he said.

The department was located next to the service counter, early in the shopping pattern, across from the aisle of values. It is also easily accessible to people leaving the store. Large windows face the aisle of values and display promotional messages. The fixtures were angled racks that showed most of the box art.

If there was more space in the store, the retailer would have put in more catalog inventory, but new releases still would have been 50% to 60% of the selection, Stewart noted. The department will continue to be comprised of three-quarters

new releases in the future, he added.

In another Shop 'N Save store visited by SN, the inventory was 1,500 new releases and 1,500 of the other tapes.

Shop 'N Save offers the lowest rental rates in the St. Louis market: 99 cents a night for new releases and 49 cents for other titles. Stewart would not discuss profitability at these price points except to say, "in general terms, I can tell you we are doing very well."

The main purpose of the low rental rates is "to drive traffic," he said. When SN visited the Belleville department mid-afternoon on a Friday, the foot traffic was brisk.

Despite the low rental rates, Shop 'N Save does not skimp on new release depth of copy, SN found. For example, of titles priced for the rental market, there were 25 copies of "Braveheart," 40 copies of "Waterworld" and 20 copies of "Under Siege 2."

The rental department also carried titles priced for the sell-through market in depth. There were 20 copies of "Ace Ventura: When Nature Calls," 12 copies of "The Many Adventures of Winnie the Pooh," 10 copies of "The Aristocats," 10 copies of "The Baby-Sitters Club," eight copies of "Tom and Huck" and eight copies of "Pocahontas."

Although the department did not offer any 16-bit or new format game software for rent, it did carry 75 pieces of CD-ROM software. "We are starting to rent CD-ROMs in some of our stores and we will probably expand that in the next three months," said Stewart.

The stores offer both videos and CD-ROMs for sale.

The retailer's primary distributor is Sight & Sound, St. Louis.