WHAT THE CAT DRAGS IN

MIKE STERNMAN

The tail that wags the pet care business in supermarkets is still very much pet foods. But now the pet accessories set is beginning to do some purring of its own as food retailers move aggressively to retain pet care shoppers' loyalty.

As one avenue for growth, supermarket pet care buyers are eyeing the "cat people," who have been the fastest-growing large group of pet keepers and who also are becoming increasingly aware of their cats' special health needs.

Cat lovers historically have posed a challenge because they normally buy fewer supplies than dog

owners -- the notable exception being cat litter, a commodity that brings them back to grocery aisles every week or so where they spend some $420 million annually, according to Nielsen Marketing Research, Northbrook, Ill.

Otherwise, cat accessory items represent a minority 30% of the market, according to data reported by ConAgra, Omaha, Neb., a major vendor.

A 1993 study from Packaged Facts, a New York business information firm, cites product and sales trends toward a wider array of health-focused foods.

Among the trends are lower magnesium and ash products for feline urinary tract health, and beverages for lactose-intolerant cats -- products that would have been unheard of years ago when most cat lovers thought milk was good for kitty.

These have been drawing more traffic to the pet food aisle, where cat owners can find themselves shopping what amounts to the animal counterpart of the human health and beauty care section.

"As far as keeping cats healthy, the flea collars, the sprays, anything that's concerned with the care and keeping of a cat is doing well for us," said Sue Hosey, spokeswoman for P&C Food Markets, Syracuse, N.Y.

One key strategy that supermarkets have hit on to keep owners and themselves happy is cat toys.

They're a fast-turning, multiple-purchase item. Supermarket buyers such as Lou Mullins, nonfood merchandiser at Thrifty Food Stores, Burlington, Wash., described toys as best sellers around the holidays and good movers that can be promoted year-round as well.

Mullins said he gets a lot of support from the two major vendors in the food channel, who told SN they had steadily increased stockkeeping units for toys.

"They're constantly changing and upgrading their selections, " Mullins said.

"The variety is greater. If you have 30 toys on display, you can have every one of them different," said Don Reba, vice president of operations at Griffith, Ind.-based Petco Marketing, one of the service merchandisers that helps move the hundreds of nonwarehoused pet-supply SKUs through supermarkets.

"Cat toys have been outselling dog toys, particularly around November and December, for the last three years," Reba said. Marketers have been introducing fashion-oriented cat versions of flea and tick collars in hot pinks and purples, and have redesigned brushes and other dog-grooming items to appeal to cat fanciers.

There is a movement, too, albeit tiny in relation to the total mix, to bring in items likelier to be on the shelves of a pet shop. Nontraditional pet toys, which previously could not be found in most supermarkets, are cropping up all over. For example, the pet care buyer at a large West Coast chain told SN that Cuddly Companions, a specialty toy from a major pet vendor, went "gangbusters" in the past season.

According to a cross section of trade sources, the biggest news in this half-billion-dollar, high-margin supermarket segment is a "significant" shift in all pet supplies -- from being merchandised in a section identified with a primary vendor, such as Hartz Mountain Corp., to being sold in a multibrand set that blends the program with other strong names.

"In addition to Hartz, we have product from ConAgra [ConAgra Pet Products Co., Omaha, Neb., under the Sergeant's label] and other manufacturers. It gives us better grosses and more variety," reported Joe Pat Smith, pet supplies buyer at Minyard Food Stores, Coppell, Texas, whose comments echoed many other retailers.

Chains adopting a multiline or hybrid program have been able to increase their pet supply sales 20% to 50%, said Reba at Petco.

Among retailers that Reba and others said espouse notably strong multiline programs are Dominick's Finer Foods, Wegmans Food Markets, Price Chopper Supermarkets, several Kroger divisions and the entire U.S. operation of Dutch retailing conglomerate Ahold, including Bi-Lo and Giant Food Stores.

Retailers testified that accessories hadn't grown much in physical space, but had certainly become more ambitious in scope. "We are happy when we get 16 feet in line. We don't often have that room in older stores. We do put accessories on endcaps, but it isn't our choice," testified Tom Beauchat, director of general merchandise for Giant Food Stores, Carlisle, Pa.

A majority of those polled by SN saw changes in the set being propelled as much by added sales as by competition from two directions: first, the rising distribution of super-premium pet foods -- the tail that wags the supply category -- in nonfood outlets, particularly the emergent pet superstores; and second, the surge in multibrand presentations of pet accessory items in channels dominated by Wal-Mart-type stores.

According to first-time data from Information Resources Inc., Chicago, mass merchandisers accounted for $711.3 million, or 56% of the $1.3 billion in pet supply sales for the 52 weeks ended in September 1993.

By contrast, supermarkets during the same period accounted for $460.4 million, or 36.2%, with drug stores generating the remainder of the sales. Some retailers interviewed said they were stepping up promotions or otherwise showcasing the little-advertised category.

"What has worked very well for us in driving sales in our Alpha Beta stores is off-shelf display," said Larry Ishii, director of nonfood for Food 4 Less Supermarkets, La Habra, Calif., which serves one of the nation's most competitive and heavily populated pet markets.

"We realized that we weren't getting enough promotional activity in the pet-supplies program," Ishii pointed out. "A special circular display rack in the pet food aisle for monthly promotions was the solution."

Like Food 4 Less, Save Mart Supermarkets, Modesto, Calif., is booking expanded pet goods promotions six months in advance. "In 1994, our goal is to promote pet supplies every month, " said Clarence Abid, a general merchandise buyer at Save Mart, adding that past efforts "had been infrequent and not on a schedule."