SCOLARI'S SWITCHES TO TOPCO BRANDS

Lucia Moses

SPARKS, Nev. -- Scolari's Food & Drug Co. here has been rolling out new private-label lines in Center Store from Topco Associates, Skokie, Ill., as it strives to strengthen its price image vs. Wal-Mart Stores and other players.

Nineteen-store Scolari's has been launching Food Club, Topco's national-brand equivalent; Topco's Top Crest household products line; and its new high-end pet food line, Paws. The retailer also plans to launch Valu Time, Topco's multi-category economy tier of items that often are priced at $1, and used against Wal-Mart and dollar stores. The retailer has been carrying Topco's Top Care personal care products for the past year and a half.

When it picked up Topco, Scolari's dropped Federated Group, Arlington Heights, Ill., its supplier for 17-plus years. Asked the reasons for the switch, Richard Peschke, vice president of merchandising and marketing for Scolari's, said, "Quality was one. Price was another. The third was a more extensive line of product that was available to us."

Scolari's had carried 800 Hy Top items from Federated. Now, it has more than 1,000 Food Club products, for example, he said. Paws gave Scolari's a premium store-brand canned pet food, something Federated doesn't have.

Lou Nieto, president and chief executive officer of Federated, said his brands otherwise offer retailers wide variety. "We have well over 2,000 items in Hy Top," he said. "They may have chosen not to carry them. Clearly, wider selection was not a real issue."

As for Scolari's other objections, Nieto said Federated is one of the top private-label suppliers, excluding the top five supermarket retailers. This gives it the scale required to compete on price.

"Our prices are very competitive with all the key competitors out there," he said. "In the industry, one of the things we're recognized for is good quality."

Nevertheless, Scolari's believes the switch will improve its position in its core market of northern Nevada, where its leading market share position is threatened by Winco of Boise, Idaho, a non-membership warehouse store, Peschke said. Scolari's also competes with a host of publicly owned chains: Albertsons, Smith's Food & Drug, Safeway and Super Kmart.

Wal-Mart, which is rapidly gaining share in the process, provided the biggest motivation for the new private-label strategy, though. The discounter has opened four supercenters in northern Nevada, with five more scheduled to come, and three Neighborhood Markets planned for the Reno area, Peschke said.

"We're being inundated with Wal-Marts," he said.

Scolari's has been using its weekly ad, in-store sampling on weekends, signs and radio ads to promote the new private-label lines in what Peschke described as an extensive campaign for the retailer. The Nevada circular recently promoted Food Club products on the bottom half of the first page under the banner, "Introducing a Wide Selection of Grocery Products Designed with the Consumer in Mind."

Scolari's also seeks to set itself apart with a premium natural beef line and high-quality produce, he said.