SEEING STARS

WENDY TOTH

Everyone from publishers to consumers agrees that celebrity glossies are a great read. However, their low price point means that supermarkets need to find creative ways to keep them from overshadowing higher-priced monthlies.

To do so, retailers are partnering with publishers and wholesalers to create promotions, displays and destinations for magazines in their stores.

“Our customers seem to enjoy the celebrity news and tabloid magazines,” said Joe Duggan, HBC category manager, Schnuck Markets, St. Louis. “However, we believe that the popularity of our cooking and recipe [magazine] offerings will increase as we put more focus on these options and expand our selection.”

“Celebrity titles are knocking them dead,” said Jim Gillis, president and chief operating officer of Source Interlink, Bonita Springs, Fla., a magazine distributor.

Those lower-priced magazines are good and bad, he said. “In the celebrity category, low-priced sales take away from titles with higher cover prices. However, the entire industry appreciates that publishers are taking the initiative to launch these new types of products.”

Based on numbers released by the Audit Bureau of Circulations, Schaumburg, Ill., and BPA Worldwide, Shelton, Conn., single-copy magazine unit sales were up 1.6% in the second half of 2006, according to a report on the numbers from Harrington Associates, Norwalk, Conn. “However, because of the continuing presence of low-priced titles, retail dollars during the period grew by a smaller 1.4%,” the report said.

Celebrity titles feature a lot of the same topics as women's magazines do, according to Ann Finn, vice president of consumer marketing, Magazine Publishers of America, New York. “The celebrity magazines are priced lower, with similar content, so it's up to the buyer to decide what they will spend.”

For instance, single-copy sales for the celebrity weekly In-Touch, which costs $1.99, were up 7.7% to 1.2 million for the second half of 2006, according to figures filed with the Audit Bureau of Circulations. Yet single-copy sales for the women's title Allure, which costs $3.99, were up only 0.1% to 292,028.

Women's title Cosmopolitan, however, was up 5.9% to 1.9 million with a cover price of $4.29. On the other end of the spectrum, celebrity weekly OK!, which debuted in the U.S. in 2006, sold 513,473 issues in the second half of the year at $1.96 each.

While this is good for the consumer, it means the retailer is getting a percentage of that lower cover price.

A price point for publishers to keep in mind is $2, according to Gillis. “Anything under $2 is just about death for the wholesaler, regardless of the volume.”

Distributors and wholesalers manage to keep very-low-priced titles on the racks by charging the publisher a handling fee — just enough to “break even, because we want to help them launch new titles,” Gillis said.

When OK! entered the market, it debuted at a low 25 cents for a limited time, “for instant recognition,” Gillis said. “But once they got the distribution right, they moved to a cover price that allowed us to distribute it affordably.”

Retailers should consider running cross-promotions and displays to “keep the level of unit sales of the lower-priced magazines up while selling additional higher-priced titles,” Finn said.

Strong types of magazines to concentrate on, Finn noted, are epicure titles and creative titles that cultivate “an interest in making things fun and easy.”

She cited Real Simple, a publication aimed at making activities like organizing, cooking and shopping easier for readers. According to numbers from the Audit Bureau of Circulations, Real Simple's single-copy sales increased by 4.6% in the second half of 2006. It sells for $4.50.

Another example is Bon Appetit, $4.16, for which single-copy sales rose 2.4%, and Country Living, $3.50, for which single-copy sales rose 12.6%.

HANDS ON

At Scolari's Food and Drug, Sparks, Nev., magazine dollar sales are up slightly, “but the category is mostly flat due to a ton of competition opening up around our stores,” said Nick Barainca, director of nonfoods.

To combat this, Scolari's has set up cross-merchandising throughout its stores. “I saw something similar at a competitor's during my travels,” he said. “So I researched how to set up the displays with our distributor.”

Scolari's carries Wine Spectator in its liquor section and keeps a magazine display rack that features a flipbook of tear-off and take-home recipes at the top in its produce and meat departments.

Titles like Sunset, a West Coast lifestyle magazine, are placed with produce, while all types of food magazines are placed in the meat department, Barainca said.

Competition from big-box stores has led Day's Market Place in Heber City, Utah, to concentrate on specialty items to cross-promote with magazines presenting similar topics, according to Preston Phillips, GM manager.

“Because we can't compete on the pricing that is negotiated by bigger companies on many common general merchandise items, we have started focusing on things they don't offer, like home decor, gift and other upscale items.”

Because of this, the supermarket is seeing increased sales of magazines like Better Homes and Gardens, he said.

Schnucks, which works with distributor Anderson News, Knoxville, Tenn., plans to increase its identity as the “Food Experts” by using books and magazines to educate its consumers, Duggan said. “One of our goals is to expand our cooking and recipe books and magazines to other departments, most notably meat and produce.”

Last fall, Ralphs Grocery Co., a division of Kroger Co., Cincinnati, and Meijer, Grand Rapids, Mich., ran promotional programs in partnership with Martha Stewart's Everyday Food magazine.

The programs gave buyers a discount off their overall bill if they purchased a copy of Everyday Food along with products from participating sponsors such as Reddi-wip and Hefty OneZip, according to Martha Stewart Living OmniMedia, New York, publisher of Everyday Food.

“The purchase incentive offer was designed to drive sales of both the magazine and sponsors' products through invaluable exposure in-store,” said Anne Balaban, vice president and publisher, Everyday Food.

“The program was supported in the stores with circular ads, multiple in-store magazine displays, free recipe booklets, signs on checkout pockets, and shelf talkers on display by all partner products,” according to Wendy Mure, brand development director, Everyday Food.

The promotion was successful in both Meijer and Ralphs, increasing sales of the magazine by over 50% in each chain, Balaban said. “The sales increase combined with increased consumer awareness for both the Everyday Food brand and our valued sponsors in hundreds of supermarket stores across different regions of the U.S. made this program extremely valuable to us.”

Ralphs and Meijer use Source Interlink as a distributor, Gillis said. “If there are promotions they want to do, we do them. But generally, it is up to a third party, such as the publisher, to fund the special service,” he said.

In addition, Meijer and Kings Super Market, Parsippany, N.J., are partnering with Cooking Light magazine from publisher Southern Progress, Birmingham, Ala., to support the magazine's 20th anniversary reader recipe contest, the companies said late last month.

As retail partners, the supermarkets will each promote the contest by offering in-store samplings of food from product sponsors in 20 locations across the U.S. Sponsors include Cook's Ham, Kikkoman, Quaker Oatmeal and Kraft 2% Milk Shredded Cheese.

TEAM EFFORT

Planning in-store promotions can be challenging, because it depends on organization between the publisher, the wholesaler and the retailer, Finn said. “What it really takes is a huge coordinated effort.”

Since communication between the wholesaler and the retailer usually happens on a corporate level, it is up to the supermarket's headquarters to give individual stores all the information they need to make the promotion as exciting as possible, she said.

Another way to entice readers is to provide a destination where they can peruse books and magazines, retailers told SN.

“We have an eating area by our deli and bakery, and people take magazines over there to read,” Phillips said. Day's Market Place also provides benches in its magazine and book section.

A Barnes & Noble-type atmosphere was created in a handful of Scolari's Food and Drug superstores, Barainca said. “We have 25% off hardback books there, along with audio books, magazines, coffee, and tables and chairs.”

This kind of destination atmosphere is important, distributor Gillis said. “Our sell-through percentages on magazines are 10 points better in bookstores than in grocery stores.”

To remedy this, the company is putting a task force together to help supermarkets create better in-line displays, fresher titles and anything but “a mishmash of titles all jammed together.”

Getting Engaged

Although supermarkets offering informational publications to their customers is nothing new, a polished, customized magazine can strengthen brand loyalty.

Hannaford Bros., Scarborough, Maine, offers its magazine Fresh to customers for $2 an issue, or free with an in-store purchase of $25 or more, according to Diana Pohly, president, The Pohly Co., Boston, publisher of Fresh.

Although she would not comment on the financial strategy of the supermarket's publication, Pohly explained that it is structured like a traditional magazine, but focuses on its position as a value-add, designed to engage customers in all things pertaining to Hannaford Bros.

The supermarket did not respond to an inquiry from SN.

“It does offer interaction with customers,” she said. Each issue includes a section called “Fresh Forum,” which features letters from readers, as well as an area called “Food Lover's Favorite” that profiles Hannaford Bros. customers and their favorite recipes.

Fresh is placed on stand-alone racks in several locations throughout the store, said Pohly spokeswoman Susan Boucher. Since it is not merchandised with the other magazines, Fresh does not need to be coordinated with titles placed in racks by the supermarket's magazine distributor.

“Food shopping is a chore, to the extent that we all have to do it every week or two, and Hannaford's brand is focused on the celebration of food, so this is really a nice extension of their brand,” she said.

Because today's consumer is generally “inundated with messaging, if you don't do something that's engaging beyond the product and service you are offering, then you might lose out to the heavily competitive environment you're in,” she said.
— W.T.