ATLANTIC CITY, N.J. -- These are challenging times for video in the supermarket trade. That was the clear consensus of participants in the roundtable discussion on supermarket video held during the East Coast Video Show here.
Harding's Friendly Markets, Plainwell, Mich. Because video makes up between 1% and 1.5% of the company's total business, "it just is not the priority that it needs to be for us to move forward," he said.
"I think the biggest challenge is education," said Ed Sam, president of Entertainment Management Services, Irwin, Pa. Having managed supermarket rental programs for video supply companies, Sam is starting his own firm to do that on behalf of retailers. "If you are going to expand video in the supermarket industry, you need to educate the decision makers and that has to come from the studios. They have to be told that this is a good, viable business," he said.
"I believe that the copy-depth deals coming up right now are the biggest threat to supermarket video because most of the deals are not really meant to work in the supermarket environment," said David Stewart, president of Video Consultants, Westwood, N.J., who runs video programs for several independent retailers. "In the smaller supermarkets I work with, we are trying to use video rental as a profit center," he said. Some stores may only make $600 a week on rentals, but $300 of that is profit.
"If you go to shared revenue, and they take 55% of the revenue, I can't see it working. Where are you going to get it? You've got to do more volume. I don't think these stores are going to get enough volume to offset the profit that is being taken away from them," Stewart said.