TOYS MAKING HOLIDAYS HAPPIER FOR SOME CHAINS

MARK HAMSTRA

PLEASANTON, Calif. -- Safeway here and Price Chopper, Schenectady, N.Y., are enjoying some initial success from a new venture in which a national toy retailer is providing the supermarket chains with products, according to sources.

Safeway last month rolled out 200-square-foot displays of toys selected by retailer K-B Toys, Pittsfield, Mass., to about 1,000 Safeway supermarkets around the country. Price Chopper, meanwhile, has installed the displays in the seasonal aisles of all 102 of its supermarkets.

"It's off to a great start," said Maureen Murphy, customer services manager, Price Chopper. "Customers are definitely responding."

Unlike the four-store partnership between Giant Food, Landover, Md., and Toys R Us, Paramus, N.J., the displays in Safeway and Price Chopper do not carry the toy retailer's brand. The Safeway and Price Chopper displays also are much smaller.

Safeway is carrying about 100 to 110 stockkeeping units of toys, which are selected and purchased from manufacturers by K-B, which then delivers them to Safeway's distribution centers. K-B also provided Safeway with a suggested planogram for the toy displays, although the actual implementation varies from store to store.

Michael Glazer, president and chief executive, K-B Toys, indicated in an interview with SN last week that sales at Safeway have been strong, although he declined to reveal specific volumes.

"So far, so good," he said. "In one of their ads, they showed a bunch of the toys, and it was quite successful."

He said the tests came about after discussions with Safeway in which the supermarket operator revealed that it had not been satisfied with its performance in the toy department.

The Price Chopper rollout followed a successful, 12-store test the chain conducted with K-B about six months ago.

The toys were selected based on their popularity and on the price points. Most are offered for less than $10, although a few items are priced up to about $20. Profit margins can be in the 30% to 50% range for some items, sources said.

The toys include such high-impulse items as action figures, dolls and basketballs.

Isaac Larian, chief executive, MGA Entertainment, North Hills, Calif., said supermarkets need the expertise of the toy retailers.

"It's a fashion business," he said. "Unless you have the expertise in how to manage it, you're going to fail."

Supermarkets also can benefit from the buying power of the toy retailers, Glazer pointed out.