ETD EXITS VIDEO AFTER STORES GIVE UP RENTAL

MARK HAMSTRA

HOUSTON -- ETD Corp. here, a major supplier of entertainment products to supermarkets, last month said it would no longer deliver video and DVD recordings.

Some in the industry speculated that the exit of Kroger Co., Cincinnati, from the video rental business in the past year might have heralded the end for ETD's video distribution division.

Ron Eisenberg, chief executive, ETD, told SN that Kroger comprised "close to half" of the company's video and DVD business.

"Supermarkets are fairly rapidly exiting from the category, and it reached a point where there weren't nearly the number of stores we used to have, and there just wasn't sufficient volume to make it a worthwhile business anymore," he said.

When asked if he saw supermarkets' retreat from video rental as an industrywide trend, he said Kroger and its subsidiaries were actually alone in their elimination of video rental.

Other supermarkets that had been supplied by ETD included Safeway's Tomb Thumb and Randalls chains, Bashas' Markets, Supervalu, H-E-B and about 320 Albertson's stores that are supplied through video-racker B&M, New Braunfels, Texas. ETD retained its book and magazine distribution business.

Bashas', Chandler, Ariz., selected Video Product Distributors, Folsom, Calif., as its new supplier for video and DVD, while most of the other supermarkets were being supplied, at least on a temporary basis, by Ingram Entertainment, LaVergne, Tenn., according to Bill Bryant, vice president, sales, grocery and drug, Ingram.

"Our goal is to get everybody their product on time," Bryant said. "It's been a challenge, but we feel we're going to execute close to 100%."

The exit of ETD from the video distribution business came at about the same time that Valley Media, Woodland Hills, Calif., a distributor of sell-through video, DVD and audio products to drug stores and supermarkets, filed for Chapter 11 bankruptcy protection.