Supermarket general merchandise managers have found a lucrative place in the baby food aisle to earn full margins on related accessories.
Retailers such as Gerland's Food Fair, Rosauers Supermarkets and Associated Wholesalers report good impulse sales after they fine-tuned their mixes of baby accessories this year.
"Baby accessories move well," said Kim Botkin, director of nonfood at Gerland's, Houston.
"It's a general merchandise segment that we're making good money on at 50% margins, and it's not price-sensitive," he added.
The wider variety of baby merchandise includes toys, feeding implements and child safety devices that are usually peg-hooked from food aisle shelves. Such items have sparked strong impulse sales in a section traditionally characterized by little or no profit, said general merchandise executives.
"It's a good category and the only one making money in the baby aisle as we are losing money on baby food," said Norm Carpenter, director of general merchandise at Rosauers, Spokane, Wash.
Gerland's revamped the category earlier this year at all 22 stores. It shifted all sourcing for the category to its grocery wholesaler, which expanded baby merchandise. A service merchandiser had been supplying the chain with baby accessories, too.
"Now we get a complete program of about 150 baby needs, including toys, from our grocery supplier. We retail these from $1 to $4," Botkin said.
Some items sell fast enough to reorder twice a week, according to the retailer. Gerland's has gone to a 6-inch peg to display its baby merchandise; in general merchandise, there were 4-inch pegs.
Small home safety devices are strong-selling impulse items, Botkin added.
The 8- to 12-foot baby accessories department is in the baby aisle "because we sell baby food, baby formula and diapers at or below cost. We wanted to put something on that aisle we can make money on."
Gerland's found the space to remerchandise and expand the mix by cutting back socks that were not selling. Rosauers has done well with safety-related gadgets in the baby aisle, including electrical outlet covers, burner caps and switch covers for stoves.
The retailer streamlined its baby accessories with the safety-minded shopper in mind, and brought in devices "that will prevent a kid from turning on the dials to a stove," Carpenter said.
Baby accessories are priced from 79 cents to $6, and carry 32% to 40% margins. The section "competes with baby shops and mass merchants. I'm sure there's a good selection at chain toy stores, too," he said.
The pegged 24- to 28-foot section contains "a lot of safety products. This part of the section is hot with consumers today, although 60% to 70% of our sales are in feeding implements. We've always had an over-representation in slower-selling, low-end toys. We substituted safety items in some of that space and we seem to be getting results," he added.
He said there are few planned purchases in safety devices, which makes it a good impulse category that also can attract grandparents and other relatives.
Associated Wholesalers, York, Pa., finished rolling out a baby accessories department last spring to 138 retailers. The merchandise is concentrated on a larger assortment of baby toys and baby wear.
Charles Yahn, Associated's vice president of general merchandise, said the section contains a 124-item mix designed to boost retailers' general merchandise sales and profits.
Retailers have reported positive sales from the expanded sections. Associated targeted larger, 8- to 12-foot departments.
The enhanced selections are geared to infants and toddlers, and feeding implements and safety-oriented products showed strong movement at more affluent stores, said Yahn.
"There seems to be a demand out there for these items, which consumers purchase on impulse at a food store," he added.
While offering "a fairly wide cross section of products is important, maximizing display space and avoiding heavy duplications are also crucial in this product area.
"You don't really need to carry seven different trainer cups, each in a different theme, so we've scaled that back to two. "Although a mother will pick up basic feeding implements when the baby is born, grandparents will see other items and pick them up."
Most of the products are priced at less than $5. However, Associated carries a few toys retailing for $9.99. Yahn said some retailers will begin merchandising the expanded assortments just before Christmas. Baby accessories turn seven times a year, he noted.