ACME TO EXPAND VIDEO RENTAL PROGRAM IN SIX NEW STORES

DAN ALAIMO / Additional reporting: Joel Elson

MALVERN, Pa. -- Following Albertson's acquisition of parent company American Stores, Acme Markets here will expand its video rental program, said Marc Ehle, director of general merchandise sales.

At one time, Acme had as many as 30 rental departments in its stores, but now has 15, he said. The chain will put video departments into six new stores it has planned for next year and will consider replacing the departments it has taken out, he said.

"Video rentals have been flat, but Albertson's is big in video. They are firm believers in it," Ehle said. Available space will be the main factor in determining whether stores get video rentals, he said. "Movie rentals have wide appeal across all socioeconomic demographics."

If Albertson's, Boise, Idaho, reintroduces video rentals to other American Stores divisions, it would be a big boost to the overall supermarket video rental market, which has suffered some reverses as chains took under-performing rental departments out in the face of competition from big video specialty chains, said industry observers. Albertson's has one of the strongest commitments to video rental and sell-through in the supermarket business and SN ranked it first earlier this year among all supermarket chains in rental, based on sales and merchandising acumen. Albertson's executives did not respond to a call for comment.

The departments will be racked by the Movie Exchange,

Oaks, Pa., which services the existing 15 departments, confirmed Brian Ward, director of operations for the Movie Exchange. "Acme has indicated that since American Stores was purchased by Albertson's, they are looking at doing video rental departments again. Video rental will be a part of the new stores scheduled for next year and some of the existing stores will be candidates for the program," said Ward, who could not provide any details about the retailer's plans.

"With the consolidation of the specialty stores, there is an opportunity for the grocery stores to capture some of that business," he said. As independent specialty stores go out of business because of competition from the big chains, supermarkets have a chance to pick up some of that revenue, Ward added.

Acme will also consider DVD rentals and sales, said Ehle. "We're watching DVD for sell-through opportunities. We've brought some product into stores in higher income areas."