TAKING INITIATIVES

BOB BAUER

Center Store merchandisers are getting aggressive, fighting hard to protect their turf from alternate classes of trade as well as encroaching in-store perimeter departments.

That aggressiveness manifested

itself in many ways in 1995. Here are a handful of specific strategies that became prevalent during the last 12 months:

A pronounced move toward the store-within-a-store concept. Candy shops, pet centers and baby marts are springing up on an almost daily basis.

The continued implementation of category management. As the roots of category management become firmly entrenched, more retailers are turning to it to help them get the most bang for their buck.

An overall upgrade of private label. Store-brand goods continue to improve in terms of packaging and product quality.

A stepped-up effort to educate consumers about nutrition. Shelf-tag programs and on-staff nutritionists are becoming commonplace.

An increased emphasis on the importance of the baby aisle. Targeting young families, stores have turned to everything from bargain-basement prices to day-care centers.

All of these tactics are designed to make the Center Store area a more consumer-friendly environment, something retail executives consider a must in order to protect the supermarket's core business.

The following are the stories that took center stage in Center Store :

Boutique Chic

The store-within-a-store concept took off in 1995. Among the most popular categories in terms of incorporating this idea: pet foods, candy, beverages and natural foods.

In March, for example, Carr Gottstein Foods, Anchorage, Alaska, opened a Sweet Shoppe, a 400-square-foot enclave full of candy, in one of its stores. In just three months the department was accounting for 1% of total store sales.

Tall, candy-filled, crayon-like cylinders highlight the colorful department, which beckons sweet tooths of all ages. In that space, the store has carved out a relatively labor-free boutique area with 180 bulk candy varieties in 296 bins. "For that kind of footage to command 1% of total store sales is fantastic," Larry Hayward, Carr Gottstein's chief operating officer, told SN. "Because of the success of this one, we do have plans for more," he added.

Carr Gottstein is not alone in thinking along those lines.

Big Y Foods, Springfield, Mass., included a 1,500-square-foot Paws Professional Pet Center in a store it opened last month in Spencer, Mass.

Why the move to this concept?

"We realized through our category management plan that we needed to combat the superstores, mass merchants, including Wal-Mart, and we just better get it done before they steal it from us," said Phil Schneider, Big Y's director of grocery sales.

Grocery executives employing this strategy say the concept simplifies the shopping process for time-pressured consumers and allows stores to improve their image in the category involved.

Managed Cure

Category management has become an industrywide buzz word. But nowhere is it more needed than in Center Store. The role of the grocery department is shrinking as retailers continue to place emphasis on perimeter departments and even nonfood.

That means, more than ever, that grocery departments are being forced to make the most of their sections. The combination of retailer and manufacturer data compiled in the category management process helps retailers offer the best mix of products in their stores.

Jeff Savage, grocery buyer and category manager at Randalls Food Markets, Houston, said Center Store merchandisers have to analyze their data and remove slow-moving products, something some retailers are reluctant to do because it might harm their image of offering variety.

"It really doesn't do any good to hang on to that real estate if the products aren't performing in the space," he said.

Category management, said Pat Brooks, director of frozen, dairy, deli and liquor at Save Mart Supermarkets, Modesto, Calif., allows grocers "to have the products consumers want, rather than what we think they want."

Effective category management requires retailers to work with manufacturers to determine the most effective makeup of individual categories.

Dick Salmon, senior vice president at Melmarkets/Foodtown, Garden City, N.Y., told SN that a category management plan developed by Anheuser-Busch has helped his chain keep the space in its beer sections properly allocated.

Although category management has yielded positive results in chains such as H.E. Butt Grocery Co., San Antonio, and Vons Cos., Arcadia, Calif., the high cost of implementing it has kept many chains from employing the strategy.

Mastering Store Brands

The face of private label continues to change. Improved product quality, better packaging and "master brokers" are helping to enhance the state of the store-brand segment.

While master brokers -- also known as in-house brokers -- are contracted as sales representatives for private-label vendors, they function primarily as service providers to retailers, wholesalers and buying groups. They present options for new items and category plans. In stores, they make sure the merchandising gets done.

Critics of such arrangements -- primarily independent brokers, especially those who serve private-label principals -- say the setup is that of a servant with two masters, both vendor and customer. Meanwhile, local brokers' relationships are disrupted, they argue.

The phenomenon has already attracted two lawsuits by broker groups: one against Albertson's, Boise, Idaho, and Federated Foods, Arlington Heights, Ill.; the other against Wakefern Food Corp., Elizabeth, N.J., and Marketing Management Inc., Fort Worth, Texas. Both suits are still pending, as is a countersuit by Wakefern and MMI against the brokers.

Suits or no suits, there is consensus in the industry that the private-label segment has matured.

"It's not only been product inside of the packaging that has improved, but the packaging itself," Dave Herriman, vice president of grocery operations at Giant Food, Landover, Md., told SN. "First-class quality product, first-class quality packaging -- the ability to do that today is much more prevalent than yesteryear and, as a result, private label is growing."

Tom Stephens, president of Brand Strategy Consultants, North York, Ontario, said private label's market share will continue to improve only if retailers improve their marketing.

"If you take the very basic principles that national brands have used over the years and adopt a 12-month strategy as a retailer, you're going to sell a whole lot more private label," he said.

Healthy Guidance

Grocers are stepping up their efforts in helping shoppers make healthy food choices.

Several employ full-time nutritionists who, among other things, create individualized diets for customers and administer shelf-tag programs that highlight healthy foods.

In the last 18 months, several shelf-tag programs have been launched. However, Tidyman's Inc., Greenacres, Wash., is literally helping its shoppers "See the Light" when it comes to making healthy food choices.

See the Light is the 10-store independent's nutritional education program that uses trademarked traffic light shelf tags to quickly flag the fat content of each grocery product to consumers.

"All we're trying to do is provide a customer service," said Karen Ferguson, Tidyman's health educator. "If they want to know the information, it's there."

That could serve as the motto for all the supermarket nutrition specialists contacted by SN. The primary roles for each are to provide information to shoppers and to answer consumers' nutrition-related questions.

"The role of the nutritionist is growing and becoming more vital," said Cheryl Robertson, manager of consumer affairs at Dominick's Finer Foods, Northlake, Ill. "Consumer interest in nutrition will continue to grow. Having a nutrition expert on hand to help ensure that accurate nutrition information is available for customers is very important."

Consumers receive that information through several venues, including newsletters, store tours, local cable television shows and in-store publications.

Baby Boom

One of Center Store's most competitive arenas is the baby aisle. In an effort to entice those with families to shop their stores, grocers have been known to sell items throughout the aisle at prices well below cost.

However, some retailers have taken to going outside the baby aisle to target parents of young children.

Several chains -- including Stop & Shop Cos., Quincy, Mass.; Giant Eagle, Pittsburgh, and Genuardi's Family Markets, Norristown, Pa. -- have become sponsors of events focused directly at young families. The regional events, produced by Boston-based Baby Faire, have given the chains exposure to as many as 25,000 attendees.

Genuardi's, according to Frank Puleo, the chain's director of nonperishable merchandise, used the event to highlight more than just baby products.

"We focused on the entire family. There was certainly a concentration of baby and toddler needs, but we also had products like ice cream." Genuardi's used the event to enlighten customers about such things as the 5 a Day produce program, as well as its Cookie Club and frequent video renter programs.

Raley's, West Sacramento, Calif., is one of several chains that improved its baby-aisle image -- and total store image -- without leaving the store.

Raley's has installed Play Care Centers -- supervised centers where shoppers can leave their children while they shop -- in several of its stores.

In addition to giving consumers the opportunity to shop without having their children underfoot, the centers are attracting new shoppers.

"Even though Raley's is a little bit more expensive, to me it's worth shopping here because they have the Play Care," said one woman who had just checked her children into a center at one Raley's location. She said she was not a Raley's shopper before the Play Care Center opened.

Several other grocers offer similar setups. Retailers told SN this sort of approach is just another example of how supermarket operators are becoming more sophisticated in their marketing efforts, something they hope will keep consumers shopping in their stores and away from mass merchants.