SOME CHAINS SAY BTS DOESN'T MAKE THE GRADE

STEPHANIE LOUGHRAN

Even though back-to-school forecasts from suppliers and researchers are upbeat for strong sales this season, supermarket retailers are voicing mixed reactions. Some even indicate they have given up the category to mass merchandisers.

According to the latest American Express Retail Index on BTS shopping, parents and teenagers said they will spend $548 per student on BTS clothing and supplies, a more than 20% rise from last year's survey results of $438. BTS products range from basic notebooks to flashy and popular licensed items from animated television series such as Powerpuff Girls lunchboxes and Dragonball Z backpacks.

The influx of mass merchants and office superstores has cut deeply into BTS profits for the supermarket trade, some retailers said, while for others sales have never been better. Supermarkets are attempting to make profit gains through new categories like computer supplies.

With mass retailers always in the back of supermarket retailers' minds, most stores have rolled out their BTS inventory early. Hy-Vee, West Des Moines, Iowa, put out displays in late July, while Angeli Foods Co., Iron River, Mich., kicked off its season about Aug. 11.

Jeff Swartzendruber, an assistant vice president of general merchandise at Hy-Vee, said the supermarket chain brought in many new items, such as backpacks, ink jet cartridges and mousepads. But products that have been flying off the shelves have been the most basic of school supplies, like rulers and note pads.

Keith Schaefer, merchandising assistant for the wholesaler Fleming Cos., Dallas, said standard school supplies have sold out at retailers like Genuardi's Family Markets, Norristown, Pa. More trendy accessories, like gel pens and black paper, have not moved as steadily as expected.

Business has also been brisk at Binney & Smith, the maker of Crayola Products, based in Easton, Pa. Susan Tucker, marketing communications administrator, said, "It could be a record year for Crayola's classic products, like the 24-count box of crayons and the 12-count box of colored pencils."

An anonymous Northeast-based retailer said it has had a 25% sales increase from last year. The retailer also said it has become more fashion-forward, with numerous licensed and fashion items, such as glitzy pencil boxes, day planners or Scooby Doo pencils. Swartzendruber told SN one growing trend in the BTS season is the importance of school-supply lists. He said, "Our stores have aligned with the schools around the area, so students can take a copy of their school's list when they come to the store."

Other trends include vivid, color-coordinated supplies. Kelly Gambina, director of sales and marketing at Better Office Products, said, "sales have been phenomenal this year." She told SN that the manufacturer, based in Canoga Park, Calif., and its signature colorful school and office supplies have gotten a boost from Apple computers and its bright colors. "Many people buy our products [such as Pocket Plus three-ring binder pockets or their multipack back-to-school kits] to match their iMacs."

Marshal Borman, the general-merchandise director at San Antonio-based Handy Andy Supermarkets, told SN bright colors are "in." "Wild-colored zipper binders, with various little pockets and compartments, were the first products gone."

Handy Andy Supermarkets did not concentrate on anything else trendy, or on the BTS category in general.

"[Wal-Mart] has had fantastic promotions, giving away free school supplies," said Borman. "It's been so popular for them that we backed out of the category slowly, just let it go this year."

Other stores have also opted not to take such a proactive approach in BTS. Steven DiGeronimo, a general-merchandise buyer at Victory Super Markets, Leominster, Mass., said the store does not try to do anything trendy and just sells the essential items.

"It's not a big priority category anymore," said DiGeronimo. "People's mind-set is to go shopping at mass outlets, because of their wider variety." He also attributed August as being a slow sales month because of consumers taking off for family vacations.

Sales progress aside, retailers seemed to agree that aggressive pricing and earlier rollout of inventory are essential for a top-grade season.