THE BASHAS' SCHOOL OF THOUGHT

JOEL ELSON

CHANDLER, Ariz. -- Everyone knows when it's back-to-school time at Bashas' Markets here.

Beginning in August, Bashas' turns its 70 stores into back-to-school headquarters. Large signs hung from store ceilings reinforce the idea for shoppers, who can find products prominently displayed in store lobbies here.

The chain has proved it can compete in this highly competitive back-to-school market that is characterized by aggressive loss-leader pricing by the deep discount drug chains and mass merchandisers. Bashas' strategy is to counter the competition with its own hot promotional prices on key items. It also offers shoppers a solid selection of products that are displayed up front in a specially created seasonal section.

The importance Bashas' places on the back-to-school season can be seen in the subtle details of its displays. An example is backpacks.

"Backpacks have turned into a good business for us," said Jeff Manning, vice president of general merchandise. "We order them stuffed with filling from our supplier. Although it raises the cost slightly, the backpacks look better in displays than when empty. We sell more of them," he said.

It also is significant that Bashas' has created a new promotional section for back-to-school goods. The section is located in the store's lobby, opposite the pharmacy.

This new setting for back-to-school merchandise will be rolled out to new and remodeled stores that have enough front lobby space.

"I'd almost like to see even more product sold in the lobby. It sells better and creates more excitement. We are going to more lobby sections for our seasonal general merchandise promotions," Manning stated.

Promotional features included filler paper, packs of fashion pens and pencils, notebooks, theme books and binders.

The chain's 100-count Mead filler paper, priced at a penny, ran as one of some 70 Bargain Booster items from various departments that are featured weekly in a frequent shopper program. Products in the program are sold below cost.

"A customer with a Bargain Booster card receives a stamp with each $5 purchase. Once the card is filled with six stamps, the shopper can purchase products at a great bargain," noted Manning.

"Nobody else in town runs filler paper like this. Our customers know it and wait for it every year," he said, explaining that the filler paper special draws shoppers into the promotional section. Stacks of filler paper were on a center aisle display with signs that explained the promotional price was only through the frequent shopper program.

"It's been very successful, and creates a rippling effect on overall category sales," Manning added.

Despite the steep margin cuts on targeted back-to-school products, Manning said the chain still makes a good profit. It has increased category volume, and enhanced Bashas' image as a full-service store.

Back-to-school hot price specials are featured in newspaper ads and in-store circulars to bolster Bashas' low price image in the category.

"We always run pencils, pens, binders, notebooks and theme books at attractive prices in our ads, and filler paper way below cost. We'll use shelf stickers letting customers know how much they are saving," said Manning.

Bashas' breaks its first back-to-school ads the second week of August. Featured displays are up for three to four weeks during the season, but the chain will maintain its lower promotional prices for six to seven weeks through the middle of September.

SN visited several Bashas' stores during the back-to-school season.

At Bashas' Chandler Boulevard location, back-to-school promotional items were set up on a 24-foot-long rack against a lobby wall and directly opposite the pharmacy. A series of freestanding pallets and shippers of various suppliers were displayed in the section.

Several shippers of hotly priced back-to-school items also were set at peak traffic areas such as at deli and bakery departments.

Bashas' also put back-to-school shipper and spinner racks in the photo department. "We move a lot of film that first day of school, and with a child starting kindergarten, it's very big for film sales," said Sue Brady, lead general merchandise specialist.

"It's amazing the amount of film high school kids buy for back-to-school. Film, in fact, can be as important as other school supplies," she added.

As back-to-school gets into the peak selling period, the chain brings in shippers and pallets of items in an expanded assortment of lunch boxes and bags, contact paper, student planners, writing instruments and Crayola products.

Retails were cut across a variety of items, including 100-count packages of 3- by 5-inch index cards, reduced from 69 cents each to two for $1; a box of 50-count envelopes, cut from $1.29 to 99 cents; 12-inch wooden rulers, cut from 69 cents each to two for $1, and a 10-pack of pencils, lowered from 99 cents to two for $1.

Manning noted that fashion is an important part of the mix. "It [fashion merchandise] is always important, especially in writing instruments, notebooks, binders and in licensed characters," he said.

Extra space was devoted to additional floor shippers and dumps of crayons and marking instruments, a growing segment of the business, said Manning.

At a Tempe store, a large display, shaped something like an oversized Crayola box, held products. The display was set off to the side of the main back-to-school section. The mix contained 64-count boxes of crayons, priced at $3.49, and 96-count boxes for $3.99.

"Markers in particular are doing very well, and we offer them in a wide variety," said Brady.

"Color is universal and has become a big part of everyone's focus. Certain schools now call for students to use only specific color pencils for certain things like map work and geography. We sell out of these products even after back-to-school promotions are over," Brady said.

Manning said schools start at different times, and there has been talk about school going year-round in Arizona.

"It would change how and when you would promote the section, and you may not see the big push in August and September. Instead, you'd see a push throughout the year."