APPAREL IN THE AISLES

LONDON -- Those crackers go well with this shirt. That kiwi matches your pants. This skirt complements your oatmeal.Asda, a British division of Wal-Mart Stores, Bentonville, Ark., has surpassed Marks & Spencer as the top clothing retailer here, raising the question of whether a similar situation could work in America.Sales of Asda's George line rose nearly a third to 9.4% in the three months ending

LONDON -- Those crackers go well with this shirt. That kiwi matches your pants. This skirt complements your oatmeal.

Asda, a British division of Wal-Mart Stores, Bentonville, Ark., has surpassed Marks & Spencer as the top clothing retailer here, raising the question of whether a similar situation could work in America.

Sales of Asda's George line rose nearly a third to 9.4% in the three months ending July 31, compared to the same period a year before, according to a report released by Taylor Nelson Sofres here. Marks & Spencer's market share remained steady at 9.1% for the same period.

"One would think that these facts would encourage North American supermarket operators to offer clothing to their customers," said Jack Mulqueen, chief executive officer of JAM Global Trading Co. He told SN in May that he plans to launch tests of 1,000-square-foot clothing shops carrying "Jack Mulqueen" branded clothing in leased spaces within supermarkets by early 2005.

"Indeed, in the last few months, the early adopters have been very enthusiastic about installing our test shops in their stores. Chain size has not been a determinant as the early adopters include chains with 25 stores right up to those in the $10 billion to $50 billion category," Mulqueen said.

Most analysts agreed Asda is doing so well in the United Kingdom because the George brand brought integrity to the concept of selling clothing in supermarkets. Wal-Mart now sells the line in its U.S. supercenters and discount stores.

"What Asda did to get that jump-started was to develop the George line, which was done with an extremely well-known U.K. designer," said Neil Stern, partner, McMillan-Doolittle, Chicago. "That created instant credibility for the line." If a supermarket were to offer clothing in America, they would have to create a similar excitement about the brand they were offering, Stern said.

"I don't know if I would buy clothing by Kroger, but I might buy clothing by Gap in a Kroger," he said.

"If you start now coming in with apparel, it would require an advanced way of thinking and paradigm shift," said Tony Pooler, director, HBC/GM, Save Mart Supermarkets, Modesto, Calif. "You probably would have to prove it in a small way before you could do it in a big way."

The need for supermarkets to consider new opportunities was confirmed recently in the "Merchandising for Success" study put out by the New York-based Educational Foundation of the General Merchandise Distributors Council, Colorado Springs, Colo. Being "best in class" may no longer be important, according to the study, which was conducted for GMDC by Wisner Marketing Group, Libertyville, Ill.

"For the consumer, there is only best. What is most compelling about this conclusion is that it suggests that any retailer in any channel can be successful in almost any category," the study reported.

However, there is a difference in America between supermarket shoppers and shoppers looking to buy clothes, said Art Turock, sales growth strategist, Art Turock & Associates, Kirkland, Wash. When shoppers go looking for clothes and see that food is offered at the same store, it's seen as a time saver. Yet when a customer goes into a store looking for food, clothes are not an item they are considering buying, he said.

"The supermarket shopper doesn't go to a supermarket with the thought of clothing," said Turock. "It's not like a supercenter where customers have that expectation. If you look at the conventional supermarket, there's a disconnect with the shopper in terms of clothing. They have to ask themselves, 'Are we in the food business or the rag business?"'

People enjoy shopping for clothes during their leisure time, said a nonfood executive with an east Texas retailer. "The American consumer still likes going out to the mall. They like to go to a clothing store. They like to go to places where they can relax and try on clothing. Is a supermarket it, when you're in a hurry to run in and grab a gallon of milk?" he asked.

Mulqueen agreed that a lack of familiarity with apparel has been a obstacle for supermarkets. "There does not appear to be real garment literacy among North American supermarket operators. As in the case of Toys 'R' Us' management of Albertsons' 1,900 toy departments, the chains want this new apparel category to be managed by professionals."

In addition to the lack of interest and knowledge, Turock said lack of space keeps supermarkets from successfully experimenting with clothing. If supermarkets used their current space for clothing, another area would have to be scaled back. For example, if clothing took the space of perishables, then a store would no longer be able to differentiate itself on that level, he said.

"I just don't think it would work in a traditional supermarket setting," said Michael Felleph, president, chief executive officer, Imperial Distributors, Auburn, Mass. "It's a space issue. It's a service issue. It's a markdown issue. It's a different business. It does not have the same characteristics of food retailing. It can't be run as an adjunct to food retailing. It has to be looked at as a very dedicated, separate business. It does require different space requirements, different service requirements and so on."

Dan Spears, HBC/GM director, Ingles Markets, Asheville, N.C., agreed. Ingles occasionally promotes clothing items like golf shirts or T-shirts, but currently has no plans to make clothing a permanent addition to the store layout.

"I think it's going to be a space issue more than anything else. It depends on the size of the stores you're out there with. By the time you get all the departments and the grocery and all this other merchandise you need to be considered a traditional supermarket, you have to balance your remaining space," said Spears.

While stores can sell occasional clothing items at drastically reduced prices, an everyday clothing line would not fit in stores, said Charles Yahn, vice president, merchandising, Associated Wholesalers, York, Pa.

"At this point, I don't see it happening in the next few years simply for lack of space. We [don't] have the space or the signage or the offerings of the display capabilities that we need to do clothing," said Yahn. "Wal-Mart certainly does it, but Wal-Mart has double the space of most of our larger stores."

Mulqueen sees his leased-space stores as an opportunity for supermarkets to stand out and as a solution to the competitive challenges presented by big-box retailers.

"We expect that over the next five years, virtually the entire industry will recognize apparel sales as key to their survival in the face of invasion of their space by Wal-Mart and other discounters."