BLOCKBUSTER'S NEW FORMAT OPENS IN TWO BIG BEAR UNITS

ANNE SHERBER

COLUMBUS, Ohio -- Big Bear Stores here is the first supermarket to host "store-within-a-store" formats corporately operated by Blockbuster Enter-

tainment Group. They are in two Parkersburg, W. Va., units.

The Blockbuster stores average 1,500 square feet each and carry between 3,000 and 4,000 tapes, according to an official. In comparison, freestanding Blockbusters average 7,000 square feet and carry between 10,000 and 15,000 tapes.

According to Karen Bennett, director of consumer affairs for Big Bear, in addition to renting and selling videos, the store rents video games and sells used games. Bennett declined to comment on the agreement between Blockbuster and Big Bear or on the effect that the video store is having on store traffic. Industry sources said the units are being run in a leased-space arrangement.

The new stores, which debuted earlier this year, are part of Blockbuster's recent push to expand its reach. Jonathan Baskin, senior vice president of corporate relations at Fort Lauderdale, Fla.-based Blockbuster, said its push into supermarkets is just the beginning of an aggressive expansion campaign. He noted that Blockbuster has a large database with which it can more effectively target customers, locate new stores and determine inventory. After years of setting minimum square-footage standards and rigidly dictating store layouts for all new Blockbuster locations, Blockbuster Entertainment is incorporating flexibility into its new marketing strategy. Under fire as an unprofitable cog in parent company Viacom's wheel, the video rental giant, which is in the process of moving its corporate operations from Fort Lauderdale to Dallas, has initiated an aggressive expansion and relaxed many of its requirements.

Big Bear, which operates a total of 81 stores in Ohio and West Virginia, established ties with Blockbuster franchisee Buckeye Entertainment, based in Dublin, Ohio, in June of 1996 when Buckeye opened a Blockbuster Video department in one of the supermarket's locations. Buckeye's agreement with Big Bear gives Buckeye "first option to place Blockbuster locations inside Big Bears whenever they build new stores or reconfigure an existing store to include a larger video department," according to Tom Carton, Buckeye president and chairman of the Blockbuster franchise advisory committee.

The partnership has been so successful, according to Carton, that when Big Bear built a new store and reconfigured an old one in Parkersburg, W. Va., outside Buckeye's franchise area, the supermarket chain approached Blockbuster corporate about installing truncated Blockbuster locations in the two stores.

Carton said he is very pleased with his three Big Bear locations and said he believes that Blockbuster corporate's decision to locate its first supermarket-based departments inside Big Bear units was based, in part, on his input.

He said that Blockbuster asked him about his stores' performance and his experiences with Big Bear. "I'm sure they located inside Big Bear based on my success," he stated.

"Part of our new, reinvented mission at Blockbuster is to expand our customer base by a variety of creative means and move Blockbuster into nontraditional areas. We're investigating inside or adjacent-to agreements with other retailers, like Wal-Mart, as well," said Baskin.

Along with the two Big Bear stores, Blockbuster is currently operating six "stores-within-stores" at Wal-Mart units in the Southwest, and Baskin said that those stores are performing well.

"We are pleased with the performance of Blockbuster's Wal-Mart locations," he said. Elements of the Blockbuster marketing strategy that were once non-negotiable are now open to discussion. Baskin said that signage -- the ubiquitous blue torn ticket -- outside new "stores-within-stores" depends on the contract that Blockbuster has with different vendors.