SUNNY SALES SEEN FROM STRONG SUMMER

JENNIFER L. BALJKO

The lazy days of summer are proving to be golden opportunities for supermarket sales.

This season's sales are surpassing last year's, particularly in the produce, deli, meat and beverage categories, according to chains SN contacted. Though phalanxes of circulars and point-of-sale aids are pitching summer fare, favorable weather, strong local economies and supermarkets' one-stop shopping convenience are fueling sales gains, retailers said.

And while business traditionally slows down in August as more people go on vacation, several operators said they expect to keep their edge and report higher overall revenues for this season. At Nob Hill Foods, Gilroy, Calif., pleasant weather for outdoor cooking has helped beef up business in most store sections, especially in the produce and red meat aisles, and is pushing sales higher than year-ago totals, said Lynda Trelut, vice president of advertising and corporate communications. "We have been having great weather. We are in a very traditional weather pattern. It's foggy in the morning, clear and warm in the afternoon and cool in the evening," Trelut told SN. "The weather is conducive to outdoor eating. Here, as in other parts of the country, summertime is really outdoors time.

"I think there is a renewed confidence [among customers] and a better feeling in the economy," she added.

Compared with other retail formats, supermarkets are showing a stronger appeal among consumers seeking staple summertime items, Trelut noted. "I like to think shoppers are coming back to supermarkets because we have what they want," she said. "There are so many other opportunities to buy food -- whether it's from a mass merchandiser, a gas station, a restaurant or wherever. I like to believe people are coming back and coming to rely on supermarkets again."

To keep the momentum going for the rest of the summer, Nob Hill is stepping up promotion of key summer products like ice cream and red meat on the cover of its weekly circular and is tying in with local events such as the Gilroy Garlic Festival and a rodeo in Salinas, Calif., Trelut added.

Raley's Supermarkets, West Sacramento, Calif., also reported that its sales are climbing above summer 1995 levels. "Sales are up anywhere from 5% to 10%," said Michael Teel, chief operating officer. Though Teel said it's difficult to point out particularly robust categories, he noted that "there's an increase in overall business."

Northern California's continued rebound from a lingering recession a few years ago is helping to spur consumer spending, Teel said, adding that Raley's improved promotional pop may partly account for the sales spurt. "We are getting better at what we do at Raley's," he said. "We are constantly promoting products every week. Anytime you enter into a season you promote items for that season."

The deli, meat and produce departments are drumming up summer business at Byerly's, Edina, Minn., according to Tracy Wiese, communications manager. "We are seeing a lot of activity in the deli section. Customers are looking for easy, fun meal ideas," Wiese said. "We do a whole series of meals to go and other items that are easy to throw on the grill when [consumers] get home from work."

Sweet corn, berries and Byerly's packaged shish kebabs are among the chain's hot-selling summer items, she said, adding that Byerly's red, white and blue pie sold well during the Fourth of July. Byerly's store managers also are supplementing seasonal displays and fliers with promotions tied to the chain's 12-page Byerly Bag shopper guide, Wiese said. For example, a recent Byerly Bag pitched lemons, and stores linked some of their displays to that fruit, she explained.

In Texas, a drought has triggered high sales of beverages, bottled water, bagged ice and meat at Minyard Food Stores, Coppell, Texas, a company spokesman told SN. The state has had very little rain in the last few months, and temperatures have crept above the 100 degree mark for several weeks, he noted. "We went from spring to a really hot summer," he said. "The more Gatorade we can get the better. Customers are taking water faster than we can get it. All sorts of beverages and packaged ice have been critical for the last couple of weeks. They are moving really fast. Also, with no rain, everyone here is enjoying cookouts, and that's where we see most sales."

Besides the scorching heat, a large number of people moving from other parts of the nation into Minyard's trade area also may be lifting business, the spokesman said. "Sales have been exceptionally good this year. I don't know what it is. Maybe it's all those people moving into the Dallas-Fort Worth area. At least we are getting part of that volume."

Several chains reported sizable sales gains going into early summer. For the second quarter ended June 15, sales climbed 5.1% at Safeway, Pleasanton, Calif.; 10% at Food Lion, Salisbury, N.C., and 5% at Quality Food Centers, Bellevue, Wash. For its first quarter, ended June 15, sales for the retail arm of Supervalu, Minneapolis, rose 5%. Weis Markets, Sunbury, Pa., had a 6.1% sales rise for its second quarter, ended June 29.

In the first few weeks of the summer, sales at A&P, Montvale, N.J., took a bit longer to reach last year's levels due to less traffic at the shore resort stores, said Michael Rourke, senior vice president of communication and corporate affairs.

"We got off to a little bit of a late start in the Northeast. Schools ran late because they had to make up snow days," he said. "We noticed that many resort-area stores were a week or two behind. Other than that, the stores were pretty much the same as last year. In the last couple of weeks, it has really picked up because of the good weather we've been having."

The chain witnessed some fluctuation in sales activity at its Mid-Atlantic stores about two weeks ago as Hurricane Bertha pounded the coast. "We saw a surge of business before the hurricane with people buying things, and then there was no business because everyone had to leave," Rourke said. In Colorado, a strike-lockout involving Safeway and King Soopers, Denver, boosted early summer sales at Steele's Markets, Fort Collins, Colo., said Russ Kates, president and chief financial officer. The six-week dispute, which affected roughly 140 stores, ended last month when Safeway and King Soopers reached a settlement with the United Food and Commercial Workers union local. "Before the strike, we were in the 3% to 5% range. We popped up in the double digits during the strike. We leveled off when it ended," Kates told SN. "It's hard to tell how things are going to go, but we are looking at a 4% to 5% increase over last year's sales for this summer."

As in other supermarkets across the country, Steele's deli and produce departments are seeing the most growth this season, while other segments, such as bakery, remain flat, Kates said.