General merchandise and health and beauty care have come of age in the last half century. Some examples here include Albertson's grocery/drug combination format stores, then and now; a Reasor's supermarket video rental department; a King Soopers photo-finishing booth; original Tylenol over-the-counter medications; a giftware counter display.
Counting on GM
HBC Breaks Out
Pharmacy on the Front Line
Video: Ups, Downs and DVD
Services: Moving In Up Front
Fifty years ago, nonfood products were virtually nonexistent in supermarkets. Here and there a general merchandise or health related item would find its way into the store, but the predominant view was that supermarkets were only for food.
In the beginning, the growth was slow, with rack jobbers putting in minimal 4-foot sections that encompassed all the nonfood products the retailers would dare to sell. But once grocers and their wholesalers realized the customer demand for these products and their profit potential, they quickly expanded with more and varied offerings that in many cases led to the construction of larger stores. Retailers' vision to expand the nonfoods presence gave rise to the concept of one-stop shopping, and helps them compete against other classes of trade that are expanding into food. Nonfoods' journey from last-minute convenience items to full destination centers created a new definition of the supermarket. On the following pages, retailers and other observers recall the road trip.
Counting On GM
It's something old and something new, but general merchandise also is a weapon supermarkets can count on in their battles with other classes of trade.
Fifty years ago, general merchandise hardly existed in supermarkets, which then only specialized in food. But years before, there was the general store, which incorporated general merchandise of all kinds with food. Even gasoline, the latest hot trend in supermarket services, was an expected offering of the old country store, noted Rick Tilton, president emeritus of the General Merchandise Distributors Council, Colorado Springs, Colo., and now a consultant based in Scottsdale, Ariz.
It was in the years following World War II that consumers began to place more of a premium on personal leisure time after the long war experience, Tilton said. As a result, they started to value convenience in their shopping trips. "It all began with the consumers and their desire to buy more general merchandise and health-and-beauty care in the grocery store," he said.
So in the last 50 years, the entire general merchandise area, along with related categories such as health-and-beauty care, pharmacy, video and other front-of-store services came into being in supermarkets and grew up along with the industry. Now, as other types of retailers begin to challenge grocers with an increased selection of food, many in the industry believe supermarkets' best competitive strategy is to go after the core, nonfood offerings of those merchants.
"The more services they can provide and the more things a consumer can get from the supermarket, that keeps those shoppers out of the other classes of trade, and results in bigger purchases," said Jeff Manning, managing partner, F&M Merchant Group, Lewisville, Texas, and a former executive with Bashas', Chandler, Ariz., and Fleming, Lewisville.
In the early 1950s, the first displays of general merchandise were no bigger than four-foot sections, often combining health-and-beauty care products, Tilton said. These were supplied by rack jobbers, known now as service merchandisers, and these companies fought to establish the nonfood products in supermarkets, said Fran Wilmes, former vice president of general merchandise, Spartan Stores, Grand Rapids, Mich.
Before joining Spartan in 1965 to launch that company's general merchandise program, Wilmes worked for two rack jobber companies. Later, he was the driving force in the founding of the General Merchandise Distributors Council, becoming the trade association's first president.
"At the time, except for some old-time country general stores, general merchandise products were unheard of in most supermarkets. It was a real pioneering job to get it started," he said.
Retail management was receptive to the nonfood products, recognizing their profit potential, Wilmes said. "But when it got down to the operating level, a lot of the store managers were negative about general merchandise." They didn't understand what these products were doing in their food stores. "It was a selling job," he said.
Some retailers placed strict limitations on the kinds of general merchandise they would carry, Wilmes said. For example, "A&P would allow food-preparation kitchen items, but not plastic dining-table covers. That was a dining-room item," he said.
Eventually, the first growth in these small sections came as health-and-beauty aids -- the change in terminology to HBC came much later -- was split from GM, Tilton said. This was begun by some "forward running" East Coast supermarket chains in the 1950s. "It was generally in the same aisle, but there was a distinct GM department and a distinct HBA department," he said.
It was the rack jobbers that pushed manufacturers for supermarket-friendly packaging and display materials, Wilmes said. At the time, most general merchandise was sold in dime stores and hardware stores that didn't have J-hooks and didn't need polybags, he said.
"It was a real hard-sell education program to manufacturers to get them to package for self-serve," he said. "But it's come a long way since then. Everything is packaged now, and a lot of things are over-packaged." "That was the start of it, and it grew with the help from companies in the associations," he said.
The packaging and displays led to sales growth, more selling space and increased departmentalization, he said. The four-foot general merchandise section led to four feet for sewing notions alone, then to 16 feet for housewares, 16 feet for hardware and 20 feet for automotive, he said.
When Wilmes joined Spartan in 1965, it was a time when direct purchasing of general merchandise was on the rise among wholesalers and self-distributing retailers. Again the manufacturers resisted the new way of doing things. "I had some problems, but because of my knowledge of the trade and my relationships with manufacturers and sales representatives, I was able to convince a lot of manufacturers that we were going to drive the business because we were going to service it just like a rack jobber would service it," he said.
About 15 years ago, feeling the pressure from direct buying, service distributors started to focus on providing only merchandising services, said Gary Ebben, president, National Association for Retail Merchandising Services, Plover, Wis.
"The cycle has come all the way around," Ebben said. Because of the uniqueness of HBC merchandise and seasonal GM goods, "supermarkets are now sourcing the materials through distributors, but are beginning to use service-only organizations to help them with the merchandising."
Store-in-store departments have contributed to general merchandise growth in such categories as greeting cards, pharmacy and video, Tilton said. But this was related to a similar trend in other areas of the stores, he said.
As retailers increased the emphasis on their perimeter departments, they started to squeeze GM for space, noted Manning. The move to fresh departments was warranted, but the space should have come from slow-moving, low-profit packaged grocery items, and not from GM and HBC, he said. "They were taking out something that was very efficient to operate," he said.
