STOP & SHOP MULTIPLIES ENTERTAINMENT SECTIONS

DAN ALAIMO

QUINCY, Mass. -- In one year, Stop & Shop Supermarket Co. here will have nearly doubled the number of its Best Sellers! entertainment product departments, a development that is being closely watched by other retailers and suppliers.

The Ahold division has gone from 46 Best Sellers! departments at the end of last year to a projected 90 by the end 2003, said Rick Stockwood, spokesman for the retailer. More will be added to new and existing stores next year, he said.

"We have had positive feedback, and we have expanded," Stockwood said. "The concept came about because Stop & Shop has always strived to be a place for one-stop shopping. By adding the Best Sellers! section, we've been able to add the entertainment media to our mix of items," he said.

In 2000, Stop & Shop tested the concept in one store, Stockwood said, and it was expanded to another 42 stores in the spring of 2002, as SN has previously reported. The approximately 900-square-foot sections carry about 6,000 stockkeeping units of VHS and DVD videos, books, magazines, compact discs, video games, computer software and licensed toys.

This "total entertainment" approach is regarded by many in the industry as the next step in merchandising entertainment products in supermarkets. It creates a competitive advantage over other grocery chains, while addressing one of the strengths of mass merchants' offerings, observers said. However, space limitations and existing programs hinder the integration of such products by many retailers.

Giant Eagle tried placing video game magazines near video games in its rental departments, but it didn't work, said Chuck Porter, director of Iggle entertainment and video. "Even though it is the same customer, I don't believe they are interested in getting both of those forms of media in the same trip."

Giant Eagle has made a "concerted effort" to offer a wide variety of books and magazines, he said. While the publications are often located near video -- in many cases along the wall of the video department facing the main store -- "I don't see integrating them," Porter said.

Meanwhile, changes in pricing policies by the music industry are causing the retailer to take another look at CDs, he said.

Stop & Shop's approach is "a good concept," said Andrew Miller, director, supermarket division, Rentrak Corp., Portland, Ore. "But I'm not sure how many people can carve out the kind of space you need to pull that off." Another retailer that is doing it well is Ingles Markets, Asheville, N.C., he noted.

At Bashas', Chandler, Ariz., lack of space is the biggest issue preventing a grouping of entertainment products, said Ray Wolsieffer, video specialist. "We stay pretty focused on video and other nonfood sections by carrying music and related products," he said.

"The potential for total entertainment sections in the grocery sector is excellent," said Michael Rigby, group vice president, vendor managed inventory, Alliance Entertainment Corp., Coral Springs, Fla., a music and video distributor.

"The benefit of a total entertainment offer is a significant, profitable, incremental business that can really help the grocery channel compete against the mass merchants. These are fundamental product categories, and to not be in them limits your competitive viability," he said.

"It's an impulse purchase when you are talking about movies and music and books. It increases the transaction value, which is a goal of many grocery chains," Rigby said. A comprehensive entertainment department also boosts the perception of supermarkets as exciting and fun places, and the selection is renewed with the weekly flow of new releases. Because many of these come out on Tuesdays, it has the added benefit of increasing traffic on an otherwise slow day, he said.

To accomplish this effectively -- as Stop & Shop has done -- chains first need to make a commitment to the category and not be hindered by concerns like shrink, Rigby said. When video and music products are displayed prominently, they sell more, and shrink as a percent of sales diminishes, he said.