YEAR-ROUND SCHOOLING

JOEL ELSON

Back-to-school has become like Christmas in July for many supermarket chains and is now being promoted throughout the year, they said.

General merchandise buyers, who say they just came off a very profitable back-to-school season, will be attending the SHOPA Show, produced by the School, Home & Office Products Association, in Dallas this week, Nov. 14 to 16, searching for products that can better meet their shoppers' needs.

Some will be looking to expand their offering into the home-office and computer-accessory segments, while others will broaden their school supply mix with higher-priced fashion goods. Still others will be planning for small-scale back-to-school promotions in winter, spring and summer.

Rouse Enterprise, Thibodaux, La., is one company that has enjoyed solid sales of back-to-school products in January.

"Mid-term promotions seem to work well," said Bob Stelly, director of nonfood, who said back-to-school sales jumped 5% to 8% this year.

Associated Grocers, Baton Rouge, La., begins promoting the back-to-school season with its retailers in July. More grocery chains are doing the same thing in order to better establish in the consumer's mind that they are in the back-to-school business.

Associated's retailers benefited from a double-page insert tucked into the regular circular that went out two weeks early, on July 14. "It did very well and was out even before Wal-Mart," said David Himel, health and beauty care and general merchandise buyer, who said sales were up about 30% this season.

"We went out with hot pricing from the very beginning and everything sold well. Taking this more aggressive position worked out absolutely fine for retailers," he added.

Associated also held its wholesale pricing levels for a month to give retailers the option of ordering added stock and to prepare for the mailing of the insert to households in the area.

Promotional items also will be featured from January through May. "We're going to break another ad in January for the second semester. In past years we've found this is a good way to pick up sales from students who run out of supplies," said Himel.

Here is how retailers and wholesaler-distributors further assessed the 1996 season and their plans to make other segments grow.

Stop & Shop Cos., Quincy, Mass., gave back-to-school big play with promotions highlighted at regular in-line positions and promotional aisles. Displays also went up in lobby entrances and on gondola endcaps.

The back-to-school mix was dotted with "filler papers, 70-page subject notebooks, pencils and 10-packs of pens and upscale fashion merchandise. But paper products and writing instruments were basically the guts of the category and did well," said the source.

At Fairway Foods, Bloomington, Minn., back-to-school sales were up 7%, according to Jim DuCharme, general merchandise buyer/merchandiser.

Fairway pulled heavy store traffic with a mail-in rebate offer on 70-page notebooks, which it ran as a loss-leader promotion.

Consumers could purchase one to five notebooks at 39 cents each and receive a check for the full retail purchase price by mailing in a rebate form. The promotion "helped overall volume," said DuCharme.

Fairway limited its loss on this kind of program by requiring shoppers to make an effort and mail the completed form to a clearing house to recoup the full amount.

DuCharme believes that school, office and stationery supplies are emerging as a year-round business. He is attending SHOPA to search for a proposed new computer accessory section that Fairway plans to test at two stores in December.

The new departments will be integrated into the overall home-office stationery sets "as a way to try and expand the whole category," said DuCharme. The sections would be positioned in a high-volume store and at a medium-sized market.

DuCharme said school, home and office supplies range up to 64 feet at larger stores, and have become a year-round department worthy of a big push during the fall back-to-school season and again in the second semester.

"You need to show customers you're in that business and that they can find these products at the supermarket," said DuCharme.

Fairway has broadened its writing instrument selection into items with higher price points, up to $5.99. This is a growth category at Fairway that did very well this year, he said. Copier paper was merchandised in smaller pack counts.

Food Lion, Salisbury, N.C., saw higher back-to-school sales this year by incorporating some items into its frequent-shopper program.

Featuring the items as part of the frequent-shopper program "made it a very attractive promotion," said Chris Ahearn, company spokeswoman.

Among the better moving selections in the whole mix were writing instruments, fashion portfolios, notebooks and other basic supplies in pencils and paper products, she said.

Food Lion also stressed licensed products more and cut back promoting as heavily with commodity paper products and spiral notebooks. The chain stressed more licensed fashion items "since customers seem to want these,"she added.

Back-to-school business ran about 3% ahead of last year at Associated Food Stores, Salt Lake City, according to Mike Adamson, manager of communications and general merchandise advertising coordinator.

The volume increase came as retailers "took a more forceful approach at store level with floor displays and endcaps devoted to back-to-school items.

Adamson said they are finding a lot more success at stores that have dedicated promotional areas.

"We also tried to pick a blend of items with some gross [margin] rather than just footballing items," said Adamson. Associated saw sales of folders, binders, portfolios, organizers and subject notebooks increase.

Retailers also saw better shopper response by repeating the break ad two to three times through the back-to-school promotional period.

Adamson said stores with at least 24 feet or more of everyday school supplies also have a 4- to 8-foot cutout of some 50 to 75 stockkeeping units in home office supplies. "This has been a growing trend and is where we want to be now. Adding these items has been a growing process in the past few years. We've had the mix and are getting more space at store level."

He said these sections generate enough sales at 45% margins to warrant keeping them up at the 250 or so stores with home-office supplies. He said in the computer supply segment however, "diskettes and paper show the best movement, but not much else."

Associated will begin highlighting the home-office mix to a greater degree early next year. "Almost every woman you see in a food store uses a daily planner to be more organized, and we need to get more into promoting home and office supplies," said Adamson.

The goal, he said, is to make category promotions more comprehensive "like a mini back-to-school with an assortment of items, and not just at tax time."

Spartan Stores, Grand Rapids, Mich., garnered 5% to 10% higher back-to-school sales this year by highlighting licensed products and higher fashion pens, mechanical pencils and cloth products, according to Greg Huls, nonfood buyer.

Under its new strategy for back-to-school, Spartan is "trying to play down commodity price points and instead, advertise a complete back-to-school department. We're also tying in stationery, health and beauty care, housewares, film and batteries," said Huls.

Herb Finke, buyer at The Finke Co., a Dayton, Ohio, service merchandiser that supplies some 100 independent retailers in Ohio, Indiana, Kentucky and West Virginia, said back-to-school volume was higher this year and that basic products did well.

"Our retailers stressed only the items they needed for their area in national and knock-offs. But by and large, retailers must become more competitive and be out earlier with a series of special features in ads to build this business," he added.

Finke said as more products tend toward a trendy fashion look, he looks "at what the older kids are doing, which then works its way down to the younger ages.

Rouse Enterprise reported a good year with more aggressive ad features that highlighted the whole mix. According to Stelly, promoting stores as back-to-school headquarters helped push sales.

Rouse positioned its back-to-school displays at high-traffic points like lobby areas, and set up imaginative point-of-sale displays with canned goods and nonfood formed into the shape of a school bus.

The retailer prices sensitive items like filler papers and notebooks to compete against the mass merchandiser, "making sure we're close to Wal-Mart, who really low-balls those items," said Stelly.

Rouse had strong sales in lunch boxes, filler papers and notebooks, with backpacks having the highest price point at $14.99. And while the overall back-to-school mix hasn't changed much during the past year, "people didn't seem to mind paying a higher price if an item had an upscale appearance," added Stelly.