Talking Shop with... Perry Reynolds

The vice president of marketing and trade development for the International Housewares Association says celebrity chefs and fresh and organic foods are fueling growth in housewares. Grocery Headquarters: What is the current state of the housewares category? How is the economy impacting sales in housewares industrywide? Perry Reynolds: Housewares is bouncing back quickly and many retailers are reporting that housewares and home products are key elements in their current sales growth. Retailers we have spoken with tell us that they see several factors playing into the recent success of the category, including the continuing fascination with celebrity chefs and the tools they use, increased attention to fresh and often organic foods and the fact that consumers have been spending more time at home. Reports say that meals eaten at home are on a growth path. Even coffee brewed in the home is increasing. In our conversations with consumers they also tell us that they are tightly focused on keeping their homes organized, their laundry and clothing care efficient and their surroundings clean. Supermarkets are exceedingly well positioned to reach the consumer in response to each of these factors. How are supermarkets doing in the category? Many supermarkets are capitalizing on higher-margin housewares products, but there are still greater opportunities in the housewares categories. Our most recent State of the Industry Report shows supermarkets holding steady at just over 8% of the total housewares market. That report also shows that housewares as a category is comparable in annual sales volume to fruits and vegetables and roughly twice the size of dairy products. It appears that there is still room for significant growth. Why and how should grocery stores get involved with the housewares category? What merchandising tactics should they employ? Other retail channels are not shy about adding or expanding food assortments to draw traffic. Supermarkets, if merchandised well, have the opportunity to return the favor in housewares, and at an attractive margin. Supermarket merchants have been quite successful over a long period of time using classic approaches such as appropriately positioned in-line sections of basic products such as bakeware, cookware, foilware, kitchen gadgets and cleaning tools. Many have used seasonal outposts, j-hooks, clipstrips and power panels. Somewhat newer tactics include dedicated sections in fresh food areas and creating extended store-within-a-store categories in larger-footprint locations. Based on the success stories we hear from supermarket retailers, one of the key strategic considerations is to match the price point and quality of the product offerings to the specific demographics of the store’s customers. They have told us that higher price - points are less of a challenge than they might seem. It appears that value and functionality also play an important role in the customer’s purchase decision. And any demoing has a strong positive effect on sales. What are the benefits for those supermarkets that do get involved with housewares? The most important financial benefit is the extended gross margins that the housewares category offers. Other considerations include saving the customer a trip to competitors in other channels and the overall lift of offering well-known brands associated with cleaning, food preparation and home organization. As one retailer told us recently, housewares can make a significant contribution to raising the average each customer spends per visit, which is a key goal for many supermarket merchants. What does the future look like for the category? What segments will particularly do well? The housewares category has benefited from a significant infusion of innovation over the last two years. At the 2010 International Home Housewares Show, we hosted more than 550 new exhibitors and we expect to see that many new entries for the 2011 show, scheduled for March 6 - 8 in Chicago. Buyer and exhibitor registration increases bear out the trend that homegoods and housewares are a hot category. As we said earlier, the consumer, lead by emerging chefs, is looking for more sophisticated menus and the tools to prepare them. They have a renewed desire to bring order and cleanliness to their homes. Supermarkets are very well positioned to profit from the coming growth of housewares.