DAIRY AND GROCERY TIE-IN DOUBLES SALES AT KROGER

JOEL ELSON

CHICAGO -- Kroger doubled the sales of refrigerated puddings and pasta products at three of its Cincinnati marketing area stores by cross-merchandising the products at grocery aisles.

The sales results surfaced in a limited test of the cross-merchandising strategy started at three stores in February, Mike Schultz, group category manager for grocery, told SN after his talk on category management in the dairy department during the Food Marketing Institute annual convention here.

The merchandising strategy was devised after a category management program the chain implemented in the dairy department showed that stores were overallocating space in the two subcategories while fluid milk, yogurt, chilled juice and shredded cheese categories were underallocated.

In a bid to carve out more space for the underallocated items, Kroger successfully moved refrigerated puddings to an upright refrigerated display fixture adjacent to the dessert section, and repositioned refrigerated pasta products next to spaghetti sauces.

The decision to redo the dairy case planogram came as a result of a category management sales, profit and shelf schematic analysis in the dairy department that determined yogurt warranted a greater amount of space, and refrigerated pastas and puddings could do with less footage, Schultz said.

Armed with the positive preliminary sales results, Kroger is mulling whether to extend the cross-merchandising of the two refrigerated subcategories to the division's other 97 stores.

"Additional follow-up and tracking of results will be needed to confirm whether or not this merchandising decision to allocate both pasta and puddings outside the traditional dairy case is beneficial," he said.

"We'll evaluate the results fully at the end of the first half and then determine if we would want to extend the merchandising approach in the second half of the year at our other stores." Taking a category management approach to the dairy case is especially crucial as perishables and specialty departments in meat, floral, frozens and others engage in a "market share battle on the supermarket sales floor everyday," the Kroger executive told the attendees of the morning workshop.

With this departmental jostling for a larger piece of total store sales and merchandising space, the "need to understand consumer trends, information, technology, suppliers, assets and how they all interact is a compelling reason for finding a better management approach to handle this complexity and change, and category management provides this approach," Schultz said.