ADDING NONFOOD CATEGORIES CAN BUILD TOTAL-STORE SALES

David Merrefield

There's no secret about the fact that supermarkets are casting about in different directions to find ancillary product lines to offer shoppers in a bid to take advantage of existing traffic, build traffic, and shore up flagging sales and profits.

That's why parking lots are sprouting fuel and convenience stations and why interiors are sprouting film-developing kiosks and whatnot. And, as news and feature articles in this week's SN point out, there are many more moves of those sorts that supermarket retailers could contemplate.

In the Nonfood Strategies section, which starts on Page 19, you'll find a suite of articles about what some retailers have done to build sales with products other than food. Some of these concepts aren't entirely new, but in the aggregate they suggest some ways to go that could help build business.

Jewelry: Supermarket chains can and do own jewelry stores, but what about moving jewelry stores into the supermarket? A&P has plans to open a store in New Jersey that's to feature a jewelry store near the front end. A&P won't be the operator of the store. It's to be in leased space and under the banner of an existing, freestanding store in the region. A&P has already tried the concept with one of its Waldbaum's stores. In that unit, there's also space leased for a hair salon. There's no reason that any service such as these that would tend to build traffic couldn't be considered.

Phone cards: The sale of phone cards in supermarkets isn't new, but the concept of the prepaid value card is morphing in all directions and continues to offer sales opportunities. Retailers are leveraging their phone-card business into prepaid wireless, prepaid Internet, prepaid general-purpose stored-value cards and gift certificates. Some of those moving toward offering more types of prepaid cards recommend obtaining product from a single vendor to reduce complexity and to offer cards that are activated at the point of sale. The latter point underscores the fact that cards kept under lock and behind a service counter tend to stay there. Some retailers use vending machines to obviate that problem if they aren't equipped for POS activation.

Cellular phones: In addition to the possibility of offering prepaid phones, supermarket retailers are having success with phone accessories. That's particularly true in states that have banned the use of handheld phones while driving a vehicle. In those areas, retailers are gaining impulse spending by offering inexpensive headsets and microphone combinations. At the moment, such devices tend to wear out on a fairly frequent basis, so repeat business might not be out of the question. Moreover, the universe of cell-phone users continues to grow. Incidentally, the entire wireless-phone category is likely to heat up from this point forward, driven by the new picture-phone technology. Should that technology catch on as well as it has in other countries, it's easy to imagine a high percentage of current cell-phone users replacing their current hardware.

That brings us back to the store-in-a-store concept. Why not have a cell-phone shop at the front of the store, too? Trade channels now eroding supermarkets' food sales will do that.