KROGER MICHIGAN DIVISION CHECKING OUT OF VIDEO RENTALS

DAN ALAIMO

LIVONIA, Mich. -- Running counter to the expansive trend in most other divisions, the Michigan Kroger Marketing Area is apparently phasing out video rentals.

In calls to multiple stores, employees confirmed that the division plans to take video rentals out of all stores. The process began earlier this year and will continue until sometime in 1999 depending upon each stores current sales volume, the employees said.

"Because we do so well on rentals, we heard it won't be until some time next year," said an employee at the Lapeer, Mich. store.

"They are going to take it out of all the stores sooner or later. We've been told we will be one of the last," said an employee at the Troy, Mich. store.

Divisional vice president of merchandising Dave Babinsky deferred a request for comment to Kroger's Cincinnati headquarters. However, Paul Bernish, the company's spokesperson, did not return phone calls.

Among the stores that shuttered their video rental departments earlier this year were Warren, Garden City, Royal Oak, Bloomfield Hills, Canton and Mount Pleasant, all in Michigan. Employees said the space had been filled by various other products, such as soft drinks, greeting cards, and beer and wine. A store near divisional headquarters in Livonia will close this month, while another in White Lake will close in September, employees said.

Video suppliers reported that the company may be operating as many as 20 departments now, down from 35 a year ago. The division has 80 stores.

While the store employees attributed the closings to insufficient revenues, suppliers said the cause was more likely a lack of commitment by divisional management and a revolving door in the video buyer's office. This contrasts dramatically with other Kroger divisions that place a strong emphasis on video and put modern, well-merchandised departments in most new stores.

"We've been through more buyers there than in any other Kroger division," said one supplier contact.

As a result, the division has missed out on promotional and buying programs, the suppliers said. "This was simply a KMA that wasn't doing video right. They missed a lot of opportunities."

In most of the other Kroger divisions, "the new video departments are gorgeous. They are putting a lot of money into it. As a chain, there is a serious commitment to video and there are a lot of serious executives involved," said the supplier.