KROGER ROARS WITH 'LION KING' PROMOTION

Dan Alaimo

CINCINNATI -- The Kroger Co. here conducted the largest-ever promotion in the supermarket trade on behalf of a single video title this month, according to knowledgeable industry observers.

The event supported the Oct. 7 release of "The Lion King Special Edition," and was carried by all divisions and banners of the chain. It involved nine tie-in partners; heavy advertising, which included prominent placement in most divisions' circulars the week of release; and a significant buy-in, sources said.

A Kroger executive declined to speak with SN; Buena Vista Home Entertainment, Burbank, Calif., could not be reached for comment by press time.

"This was the largest promotion a supermarket has ever run on a prerecorded DVD and VHS, and it shows how much product can be sold when this much emphasis is placed on a title," said Bill Bryant, vice president, sales, Ingram Entertainment, La Vergne, Tenn.

"This also might be the single biggest video promotion for any store," said Bob Alexander, president, Alexander & Associates, New York. The mass merchants and big specialty video chains haven't run programs like this because they don't carry products from all the tie-in partners. And other retailers, like other supermarkets and the electronics chains, don't have as many stores as Kroger, he said.

The unique, two-phased promotion ran from Sept. 21 to Oct. 18, when Kroger offered loyalty card users the opportunity to earn points toward a discount on "The Lion King." Customers could potentially earn enough points to offset the entire $19.99 purchase price, the company reported. Brands involved in the first phase were Kellogg's, Keebler/Sunshine, Powerade, Minute Maid, Nestle, Orville Redenbacher Popcorn and Kodak.

In the second phase, which began on the street date and ran through Oct. 18, customers who bought "The Lion King" on DVD or VHS were offered the following items at no cost: Orville Redenbacher Popcorn two-pack, three pack or mini-bag; Minute Maid Hi-C Blast 10-pack; and Dannon Water six-pack of six-liter bottles. Also, shoppers were offered a $2 instant savings on "Lion King" plush toys.

"I've never seen anything like this," said Andrew Miller, director, supermarket division, Rentrak Corp., Portland, Ore. "It's the most aggressive supermarket promotion on a single title ever."

No other retailers, including other supermarket chains, promoted "The Lion King" to the extent that Kroger did, sources told SN. Some retailers had special offers, like Circuit City giving away a portable radio and headset with the purchase of the title below cost, at $14.99. Best Buy advertised a free "Lion King" mouse pad/calendar with purchase at $15.99, also below cost.

Most interviewed by SN said this promotion was especially noteworthy because it was for the re-release of a movie that had already sold 32 million copies. Even though "The Lion King" was being issued on DVD for the first time with additional materials, including a new song within the movie, the common wisdom in the video industry is that a re-release will not sell nearly as many copies as a new movie, like the upcoming "Finding Nemo."

Also, the success of the promotion would depend on store-level execution of cross-merchandised items, the observers noted. Reports from different parts of the country indicated this kind of follow-through was inconsistent at Kroger stores.

"To me, it's just too confusing," said one source who asked not to be identified. "I think they overdid it."

Yet, the promotion also indicates the potential of supermarket in video sales, the source said. "Lots of luck to Blockbuster in trying to compete with this. This is an example of supermarkets' might being used in video sell-through. What other kind of retailer could offer something like this?"

"Supermarkets are a great impulse location for sell-through," said Tom Adams, president and senior analyst, Adams Media Research, Carmel, Calif. "I think Buena Vista is counting on an enormous number of 'what-a-great-movie-that-was' impulse buys for what was, everyone would agree, a truly great movie."

In a press statement issued by Kroger's Great Lakes Division, Livonia, Mich., Jon Flora, president, said, "The promotion further differentiates Kroger, and reinforces our commitment to saving customers [money]."

Sales numbers for Kroger were not available to SN, but Buena Vista had said that "The Lion King" re-issue had sold 3 million copies in its first two days of release, according to media reports.