THE IMPULSE IS WITH YOU

WILLIAM SMYTH

This summer may prove an old adage -- "You can't have too much of a good thing" -- as retailers happily promote new items tied to the blockbuster "Phantom Menace" in the already healthy novelty-candy category.

According to Information Resources Inc., Chicago, novelty-candy sales in supermarkets were up 11.6% during the 52-week period ended March 28, 1999. Retailers made $107.5 million on these "impulse items" during that period.

"Novelty candy is a huge growth area and it keeps getting better and better every year," said Jim Corcoran, director of trade relations for the National Confectioners Association, McLean, Va. "It's an area that's seeing much growth in supermarkets."

Since novelty candy is often linked with children's movies, it is not surprising that retailers are planning to cash in on candy tied in with "Episode I: The Phantom Menace," by Lucasfilm Ltd. The film has already broken one record, reaching the $200 million sales mark in the shortest period of time. The Star Wars film hit theaters nationwide May 19 and had already grossed $210 million by June 7.

Save Mart Supermarkets, Modesto, Calif., is promoting some novelty-candy items with other Star Wars-themed products. According to Randy Slentz, candy buyer, the retailer is currently cross merchandising novelty Star Wars Pez dispensers with Farley's fruit snacks, Pepsi, Frito-Lay chips and Capp novelty toys. These items are all licensed for "Phantom Menace."

"Novelty candy is an area that is hot today, dead tomorrow," said Slentz. "Currently, we have 600 Star Wars floor displays in all of our stores." He went on to say that it is important to cash in on the demand for themed items while the movie remains popular.

"Novelty candy is not what people come into a supermarket for," he continued. "We've added some novelty candy to the regular candy aisles, but we won't take out items that continuously sell well for an item that soon won't. It's really an impulse item."

Like Slentz, Rich Ehrhart, category manager for Fleming Foods York division, York, Pa., said that timing is crucial when it comes to promoting some kinds of novelties.

"If you have it at the right time it will sell. The Star Wars promotions had to be out a couple of weeks ago," Ehrhart said when he spoke to SN in May.

According to Ehrhart, there is currently a strong trend toward creating novelties based on movie themes. "Nestle is doing a tie-in with "Tarzan," and they [have] added new items [or] changed the wrapper and flavors of [already existing items]," he noted.

Like Slentz, Ehrhart has Star Wars Pez dispenser displays set up in his stores. "They have a loyal following. They're a hot item because they're popular with kids and collectors alike," said Ehrhart. "Some collectors never open them."

The freestanding displays are set up at the front end and are about 3 or 4 feet tall. Each display is ten dispensers wide, Ehrhart said.

Slentz of Save Mart sees novelty candy as an "in-and-out" category. Novelty candy is doing well, said Slentz, but not keeping pace with the other non-chocolate items. "We're not seeing a huge increase where it will dominate the confectionery category," he said.

Nonetheless, about four or five Save Mart units have designated novelty-candy areas. These areas are 4 to 8 feet in length and combine toys, hanging bag items and Capp toy goods. The distributor helps manage the section and determine which items go into it. "The [novelty] niche is a good little test market," Slentz explained. "If you try an item in those five stores and it does well, you can maybe put it in with the regular candy in the [other] stores."

The rest of the stores at Save Mart use endcap fixtures, 4 feet by 4 feet, to merchandise novelty candy. While the top shelf merchandises regular candy, the bottom three shelves are used for novelties, as are the baskets attached on each side of the fixture.

"The challenge of the novelty-candy area is the maintenance," said Slentz. Since items change quickly as well as move quickly, it is difficult for category managers to keep the sections fresh, he said.

Slentz has noticed that larger trends will also affect novelty purchases. "In California the hot thing now is yo-yos. They're selling like crazy, and we now have a candy-filled yo-yo," he said. "You have to watch out for the new trends. If I can sell a couple of floor stands while it's hot, that's profit for me."

In general, Ehrhart of Fleming is not convinced that novelties are a large asset for the supermarket retailer. "Novelty candy is doing OK, but I think we've lost some [novelty] business, especially during the holidays. I don't know where all of it is going, but some of it is being picked up by the Wal-Marts and mass merchants of the world," he said.

In the stores that Fleming services, novelty candy is mainly placed on the front end, with shippers in the candy aisles. Seasonal novelties are sometimes merchandised away from the rest of the candy, in an aisle that gives them prominence.

Endcaps are also set up during the seasonal periods. "We're starting to stick with the major companies with novelty candy," said Ehrhart. "M&M/Mars and Hershey have done very well. They send prebuilt modules that we just put up and put out. We still deal with a handful of smaller vendors, but we're steering away from that, as I think a lot of companies are. There's just too much stuff to make room.

"Bubble tape is another item that does well for us," Ehrhart continued. "Mostly what we're doing is staying with majors and going with themes."

Whitco Foods, Vidalia, Calif., treats novelties as a separate candy category. "They do well in our stores, but they're 'in-and-out' promotions, and not a part of our standard items," said Monty Rainwater, a candy buyer and director of health and beauty care and general merchandise at Whitco.

"We have them on in-and-out floorstands. We may put them in gravity-feed bins in the lobby of the stores," added Rainwater.

Homeland Stores, Oklahoma City, uses a lot of shippers to merchandise novelties. Because novelty candy is such an impulse item, Homeland devised a shipper program for all its stores.

"We send a new shipper display with novelty candy every week to every store," said Ralph Radcliffe, candy category manager at Homeland. "We get the novelty shippers at multiple price points, and we can move them quickly." Homeland is not doing any Star Wars promotions.

At Dahl's Food Markets in Des Moines, Iowa, decisions about which novelties to buy are made at store level, according to Ross Nixon, vice president of marketing. Keith Shannon, category manager at Schnuck Markets, St. Louis, told SN that "Novelty candy is doing very well [for us] and it is certainly a trendy category." Schnuck Markets merchandises 103 stockkeeping units of novelty candy on the front end and 50 SKUs in the grocery aisles.