SUPPLIERS ADJUSTING TO PAPER SHORTAGE

CAROL ANGRISANI

High paper costs have forced suppliers to modify some of their business practices. To help retailers with the upcoming back-to-school season, some are offering more reduced-count filler paper, while others are focusing more attention on value-added items.

"The gap between commodities and value-added products has narrowed," said James Schmidt, director of merchandising at Stuart Hall, Kansas City, Mo.

Stuart Hall's paper prices have more than doubled in some cases. And the company is not alone. Paper prices at Pen Tab Industries, Glendale, N.Y., like at other companies, have increased 25% to 75%, depending on the grade, according to Gary Scherlag, sales manager. Both Stuart Hall and Pen Tab have maintained promotional support, but said most retailers have not been eager to use it. This may be because, due to higher paper prices, retailers have shifted attention to fashion items and accessories. Scherlag predicts that retailers will still promote paper, but not as heavily, offering two-for-a-dollar or one-for-a-dollar deals, rather than three for a dollar. To protect their back-to-school orders, many paper companies are not soliciting any new business so that existing customers can be serviced. "We made commitments to customers and we intend to stand by them," said Hal Rahn, president of Norcom, Atlanta, which supplies supermarkets, including H-E-B Grocery Co., San Antonio. Norcom currently pays 59 cents for a pound of paper, up from 26 cents.

Nonetheless, retailers are being cautious with orders, Rahn said. "They're looking at last year's [point-of-sale] numbers and ordering according to that amount. They don't want to be left with excess inventory," he said. Some retail customers of Roaring Spring Blank Book, Roaring Spring, Pa., have cut back on orders of commodities like filler paper, but have maintained supplies of one-, two-, three- and five-subject notebooks, said Mark Garach, national sales manager.

Though most paper suppliers are offering 150-count filler paper packages, down from 200-count, the majority of retailers are sticking with the 200-count. But Rahn of Norcom predicts that this will change in 1996.