Grocery chains are enjoying lucrative sales from bargain- book promotions that generate about 40% margins and strong sell-through, according to general merchandise executives and book suppliers.
The power of bargain books was clearly evident earlier this year at Tops Markets, when the Buffalo, N.Y. chain moved $300,000 in products in a four-week promotion, according to a supplier.
"Tops set up a total of 150 four-by-four bargain-book shipper displays companywide at high-traffic locations. The chain merchandised up to five colorfully decorated shippers per store along wide perimeter aisles by the meat or dairy cases and at the high-traffic front end," added the supplier, who asked to remain anonymous. Officials at Tops, a subsidiary of Ahold U.S.A., declined to comment.
Shippers, printed in blue, yellow and red graphics, held 500 bargain books, which Tops touted in full-color ad flyers to support the sale.
Title selection is important in driving sales of bargain books at Safeway's 174-store Seattle division, which gives the chain a 40% profit margin. Children's books, regional titles and back list big-name authors account for the bulk of volume, said Steve Leach, vice president of sales and marketing at Adams News, the chain's Seattle news distributor.
The Seattle division sold about $150,000 of bargain books in a summer sales event this past July, with tables set up in lobby areas at $1.99 to $7.99 price points. Safeway officials declined to comment.
The division plans another bargain-book event for January 1997, but with selections that will be tailored more to store demographics. "For example, a larger number of fishing books will be offered in Northwest stores; Seattle stores will go heavier with restaurant titles and Western products will be increased for Montana stores," said the distributor.
Key to reducing the amount of returned unsold books at store level is increasing the mix with what consumers perceive are real bargains. "We'll order titles more selectively from remainder book market suppliers to increase sell-through at our retail accounts," added Leach.
For Safeway's July bargain-book promotion, Adam's News "picked the titles. We were lucky to get a 40% sell-through. But for the January promotion we'll cherry-pick the mix according to store areas to increase sell-though to 60%," said Leach.
Leach will customize the different titles for Safeway's stores in western and eastern Washington, Montana and Idaho, because each region needs a different product mix, said Leach.
For example, in the chain's Seattle stores more sophisticated coffee-table books on art and cooking, large picture books and children's product will be in greater abundance in the January promotion, he added. The chain places bargain-book tables with signage at various areas of stores.
Two successful "blowout book" promotions at Big V ShopRite, Florida, N.Y., in the past year had an 85% sell-through, according to a company source who declined to be quoted by name.
Bargain books work better as "in and outs," rather than as a permanent everyday section, added the Big V source.
"Bargain-priced books brought in as a promotion create a bigger impact and do really well. They appeal to food shoppers attracted to the good values and huge variety. The titles can range from cooking to the most popular titles," said the source.
Big V has found strong shopper response by running these promotions before back to school and just after New Year's Day. "We like to set these displays up as large dumps at high-traffic points. Header signs on top of the displays direct customers to the different children's and adult books there," the source noted.
Big V prices its regular book sections to be competitive with area bookstores. "But for a bargain-book sale, we'll devote a lot of ad space and play up the 33-and-a-third discount and the good titles," said the retailer.
Big V's sales data has shown these promotions work well in every store location, "including our lower-income areas," said the source.
Bashas Markets, Chandler, Ariz., has "done okay with bargain books promoted a couple times in a year as an 'in and out,' " commented Jeff Manning, vice president and director of general merchandise.
As an "in and out," it creates a bigger impact than merchandising these items in an everyday department, added Manning.
Bashas merchandises its bargain books, purchased in a guaranteed program, on tables arranged in the front-lobby seasonal promotion area. Price points are from $1 to $10.
Manning said remainder book sales "appeal to people who might not have purchased the titles at their regular, higher cover prices, or who couldn't afford the [original] cover price."
There is also consumer interest in higher-ticketed selections on art, gourmet cooking and autobiographies of celebrities and sports figures.
The higher-priced items satisfy a growing market for bargain books outside the mainstream reading market, according to Joe Healy, general manager at Target Books, a remainder book supplier, Houston, Texas.
"These promotions also now feature more coffee-table books priced as low as $14.99, which regularly sell between $40 to $50. They can range from art to cooking to titles like 'Rare Air,' the life story of Michael Jordan," said Healy.
Target Books also encourages its retailers to take an "in and out" approach to bargain books, running a promotion two to three times a year for the excitement they can create.
Healy usually discourages permanent bargain-book sections at supermarkets"because people look for an event at a grocery store."
He bases his recommendation on the way discount book retailers successfully merchandise cut-rate books. "If you go into a Barnes & Noble book store, bargain books are what you see first," he said.
The most popular price points in a bargain-book event are $4.99 to $5.99 for hardbacks, and $2.99 for children's books, according to Healy.
Although Genuardi Family Markets, Norristown, Pa., has permanent bargain-book endcaps in four feet of space at some stores, the chain is considering changing the bargain-book program instead to "in and out" promotions, according to Jack Mahon, category manager for general merchandise.