CANDY LAND

AMITY K. MOORE

Smart deliberations and thoughtful planning are crucial to a supermarket's front-end sales success. Products shelved there have evolved to include produce, magazines, batteries, film and other general merchandise, but the paramount item is still candy.

Retailers expect to capture the majority of their candy sales at the checkstand, the creme de la creme of impulse locations. In order to grab those sales, supermarket executives agreed they must keep the section well-stocked and carefully manage the product selection because space is so limited.

"Supermarkets need more space," declared Randy Slentz, grocery buyer/merchandiser at Save Mart Supermarkets, Modesto, Calif. "In our largest stores, we have about 37 inches, while Target, for instance, might have 60 inches. From a grocery point of view, we fall short," he added.

An anonymous representative with Minneapolis-based Supervalu agreed, saying his company developed a fixturing program for its independent customers, but with limited space. "We don't have the luxury to make them too big. We use the whole display, every inch of space, which is 60 inches high and 64 inches in width," he said.

Because space is such an issue, retailers and manufacturers alike dabble with other alternatives, such as shippers and count-goods boxes placed at the checkout.

"We have an additional area as you go out the front end; outside the whole row of checkstands, there's more candy. Sometimes, [the stores] will put a shipper or similar display at the front end," explained Chuck Jones, senior buyer at Scolari's Food & Drug, Sparks, Nev.

"We also do large front-end candy displays for seasonal; the only other time is when there's a tie-in," he added.

Often, multiple promotions, such as four for $1, or four for the price of three, are offered in conjunction with shippers, according to retailers polled by SN.

"We have [single pieces] on the checkstand, [rather than in the traditional candy gondola] because the gross profit is better if the cashier runs it through than if somebody puts it in their pocket," Jones joked.

In reality, those individual-count goods ring in a worthy profit for retailers. "Manufacturers approach us with case and shipper deals. We try to be consistent and offer something in every lane, in every store for a month to two months," said Save Mart's Slentz.

"We put impulse items up there. Right now it's Cadbury eggs for Easter. At Christmas, it's candy canes. We take the No. 1 count good [stockkeeping unit] for that season and push it for that season. During the off season, we pick unique items or those that we make a decent profit on," he added.

Furthermore, Save Mart limits the number of boxes placed on the counter in an effort to keep the front-end space tidy. "You don't want your customers, after you've spent all this money on a nice, clean store, to walk out seeing a cluttered mess," Slentz said.

Other retailers and wholesalers echoed Slentz' point.

"[The front-end candy display] is very important," said Scolari's Jones. "It's the last thing the customer sees. If it's well stocked, then they'll pull more on impulse," he added.

Keeping the racks filled is key in this area because the shopper is on his or her way out the door, the purchase is driven by desire, and if the product is not available, the shopper will not pursue it.

"The main problem is out-of-stocks," said a source with Copps Corp., Stevens Point, Wis., who wanted to remain unidentified. "The rack should be in pristine condition all the time, so the customer has a choice."

According to the source, a customer might pick another candy bar if his or her choice is unavailable, but many times the shopper wants two or three bars. "If it's out of stock, they're not going to buy it," the source said.

Perhaps the pressure for an orderly checkout display explains why consumers aren't bombarded with shelf signs on the racks. One of the wholesalers interviewed by SN couldn't proffer a reason, except to say that the front-end is usually controlled by the retailer.

Retailers said manufacturers don't usually approach them with front-end display signs, but if they did, added Jones of Scolari's, "we wouldn't put any signs on the checkstand displays. We don't want the profile too high."

"I don't know why retailers don't -- maybe clutter," suggested the anonymous source from Supervalu. "Although, we put signage on top of our display for phone cards because it was a new program. It's a 3-inch by 11-inch display alerting our shoppers about the phone cards," he said.

Supervalu recently renovated its wholesale front-end candy program. The company also has a retail program that is coming up for re-evaluation in June at the wholesaler's subsidiary, Cub Foods.

As part of the wholesaler's mission, it designed new checkout fixtures that have been modified to accommodate peg space for general merchandise, shelf space for candy and wire pockets for magazines, according to the anonymous source.

"[The program] is a critical part of the store. Customers see it there, so it's important to have the right items, and items that are profitable," the representative said.

When designing a fixture, Supervalu, along with other executives interviewed by SN, said choosing merchandise is based on how categories are doing in terms of sales, plus what the competition is doing.

Traditionally, supermarket retailers rotate their front-end sets every three years. Sometimes manufacturers participate in the process, sharing their sales data and planograms.

For example, this time when Supervalu began revamping its wholesale program, it used a study from M&M/Mars. With that information, Supervalu generated a plan that incorporates king size bars, standard-sized bars, gum and mints.

Ted Gardner, senior vice president of nonfood and specialty products at Unified Western Grocers (formerly Certified Grocers of California), added that if a supermarket sees a 3% to 4% increase, its management is happy.

The wholesale program his company developed is helping some of its customers realize a 71% increase. "In year two and three, they're also continuing to see increases upon that increase," Gardner said.

Unified's secret may be its attention to each store, confessed Mike Ortiz, sales manager of candy, pet and store supplies at the wholesaler. "We established each store's current dollar volume based on what they sell on a weekly basis, and made that our benchmark. Then we survey satellite locations, look at the customer base they serve, pull demographics and look at section size. From the survey, we put together the schematics, decide which items to keep, which ones will merchandise toward a particular ethnic group," Ortiz explained.

If the store is near a grammar school and the store gets a lot of traffic from 2:30 p.m. to 4 p.m., then Unified would suggest a display of kids' novelty items. Or, if it was close to housing for a mature audience, the supplier would place items more traditional in taste, such as Pearson Nips, Ortiz added.

"Then every 13 weeks, we use category management principles and scan data to pull the items that may not be pulling their weight," he said.

Presumably, Unified will apply similar category management tactics to its new corporate checkstand program, expected to launch within the next 60 days, according to Ortiz. There will be three size variations of the front-end fixture from which retailers may choose. The displays will be free of charge and are meant to succeed inherited or outdated fixtures. "This will bring some consistency to the program and our retailers," Ortiz said.

This program completes what the older successful program started, Ortiz added. Like the other one, this program relies heavily on merchandising for specific demographics, so schematics will be implemented on a store- by-store basis applying category management.

Even retailers manage their front ends in that way. When asked how his company decides which confections to place at the checkout, Scolari's Jones said he bases it on "historical velocity.

"We service it ourselves, rather than having an outside service come in and do it. One side is candy, gums, mints and fast-selling single bars. The other side is magazines. The checkstand is the only place we display gum and mints, so until it becomes a proven front-end item, we merchandise it in-line," Jones added.

At Copps, planogram researchers work with manufacturers, but the bulk of the decision is founded in the company's own research. "Our company is proactive. We research and develop the planogram; we work with all the manufacturers on the candy end," said the unidentified source.

"When a new item comes in, that manufacturer has to take something out of his space to make room for the new product," the source said.

At Save Mart, merchandise that has made its way to the checkstand has passed rigorous category management measures. "For instance, right now hard rolled candy is on a downswing while power mints are on an upswing. We try to take advantage of consumer trends," added Slentz.

The next step, suggested Unified's Gardner, is to evaluate potential impulse candidates outside traditional confections. "We're trying to add further value, build on things that are impulse like Power bars and single-serve brand names such as Goldfish, Chips Ahoy and Oreos. What's the arena, the total spectrum of what could be bought on the front end?" he asked.

Once again, it seems, the answer lies in available space.