DEVELOPING INCREASES

Supermarkets will concentrate on building traffic in photo and film this year.Some will do so through increased discounts, while others will launch innovative programs like 30-minute developing and stand-alone photo drop-off boxes.Processing sales jumped 10% at Pay Less Supermarkets, Anderson, Ind., after the chain started a program that provides photo developing in 30 minutes or less.The retailer

Supermarkets will concentrate on building traffic in photo and film this year.

Some will do so through increased discounts, while others will launch innovative programs like 30-minute developing and stand-alone photo drop-off boxes.

Processing sales jumped 10% at Pay Less Supermarkets, Anderson, Ind., after the chain started a program that provides photo developing in 30 minutes or less.

The retailer pledges that if it fails to develop a roll of film in 30 minutes, the customer will get the prints for free, said Dick Sizemore, nonfood merchandiser. "With everybody else in town, including Wal-Mart and Walgreens, offering one-hour developing, we feel we have an edge in the category," Sizemore said.

Pay Less introduced the faster developing in October, when it also expanded the number of one-hour minilabs to three stores, up from one. "People can drop their film off, buy their groceries and then pick up the completed prints in 30 minutes at stores with 1,000-square-foot photo minilabs," Sizemore said. The retailer continues to offer one-hour, same-day and overnight finishing services.

At Hannaford Bros., Scarborough, Maine, officials are working to bring photo and film merchandising into sharper focus year-round with newly designed stand-alone photo drop-boxes. The chain has seen positive sales results in a preliminary assessment of incoming photo finishing orders at six test stores that have piloted the stand-alone drop box since last October, according to Mike St. Claire, category manager for general merchandise. In addition to the drop boxes, Hannaford customers still are able to bring film to be processed to the courtesy desk. The impetus for the new 4-by-6-foot-high, stand-alone photo drop boxes, which are located against a wall next to courtesy counters, came from customer requests. "Some customers said they didn't have time to stand in line at the courtesy counter behind people buying lottery tickets, cashing checks or returning items. But those who want the personal contact can still bring their film processing there," St. Claire said. Hannaford plans to bring the new photo drop boxes to another 40 stores over the next year, he said. St. Claire said Hannaford's 14 one-hour photo minilabs "help in building a presence for faster one-hour processing, regular overnight finishing and ancillary sales in cameras, photo albums and frames."

To bolster awareness of photo processing, Giant Eagle, Pittsburgh, plans to convert about 30 stores with one-hour mini-labs to the Picture Perfect Photo center format. Picture Perfect departments bring processing, single-use cameras and blank videotapes together into one area so that more of the total category can be sold.

"Giant Eagle wants to focus the frequent customer traffic going through its stores at the photo and film area, and build a greater awareness for the products and services there," said a local observer. The observer added that the departments are in a highly visible front-end section of the store. "They're no longer away from the mainstream traffic behind a glass partition," the observer said. Giant Eagle officials declined to comment on the centers.

The chain also is testing new backlighted photo drop boxes at 10 stores. The boxes may be rolled out to 10 additional units early this year, said a trade source. In a move to highlight its photo finishing and film, Pathmark Stores, Woodbridge, N.J., planned to kick off the new year by installing film developing drop boxes at an additional 100 stores. Designed with overhead lighted signs and bright pictures, the freestanding display units were installed in 50 stores last year. The company declined to comment on its photo and film merchandising program.

Pathmark's new photo drop-off fixture merchandises film from pegs on both sides of the unit. The bright picture graphics on the fixture are changed to promote various photo products and services. These include express service on reprints and enlargements, photos bound in an album and photo Christmas cards.

Another Pathmark photo program transfers photos to floppy disks for viewing on a home computer. Associated Grocers, Seattle, now allocates more ad space for film and disposable cameras. "We encourage all our retailers to drive film sales on a weekly basis just as aggressively as other commodities," said Dan Willows, AG's category manager for photo and film. He said grocers supplied with film and disposable cameras through the AG co-op warehouse attract film and camera customers with hotter pricing in weekly ads and store circulars. This increased ad effort has been coupled with in-store displays and promotion shippers of film and disposable cameras.

"It has been pretty effective," Willows said. An example of promoting film at hotter pricing is a single roll of 24-exposure, 200-speed film retailing at $3.77. Willows said that price is close to the competition.

This year retailers will emphasize four-roll bonus film packs to keep up with frequent multipack promotions by mass merchandisers and discounters. "Camera sales are helped by in-ad coupons. A $2 Kodak coupon for disposable cameras really popped and helped increase our camera sales for 1995 by 25%," Willows added. An internal photo processing lab launched a year ago at Harvey's Supermarkets, Nashville, Ga., has enhanced photo finishing profits and lowered retail pricing.

The lab, which services 39 of 40 stores, helped volume jump about 30%. The chain currently processes about 130 rolls a week. Finishing profits per order rose six points, from 19% to 25%.

Photo developing retails also dropped 2% from the time when when an outside overnight lab was used, according to Dennis Webrand, photo and video manager at the 40-store chain. The Harvey's chain also installed its first one-hour photo minilab in December 1995 at its Valdosta, Ga., store. The photo system's performance will be assessed in six months, when Harvey's may expand it to additional selected stores, Webrand said. Harvey's maintains higher shopper interest in photo processing with coupons valued to $1 face value, 25% off any photo processing service, and a second set of prints for 99 cents. For the spring, Webrand may incorporate single-use cameras and processing discounts in the chain's wedding package program. Under the promotion, customers planning a wedding can choose from a variety of store services, including deli and bakery. If launched, the photo/wedding program, which will include 10 single-use cameras and a 30% processing discount, will be offered in 14 stores with a deli-bakery. "The idea is to include 10 disposable cameras that the wedding party puts on the tables. Then we develop all the film at a discount," Webrand said. Byrd Food Stores, Burlington, N.C., shifted from a high-low merchandising approach to everyday low pricing in photo processing last summer. The program boosted the number of rolls processed monthly per store to about 80. When the program was first launched, very few rolls were being processed. Byrd, which now also advertises photo finishing about twice a month, has set a goal to process 100 rolls per store per month, according to Randall King, nonfood buyer. "Byrd is now probably one of the cheapest for photo processing you'll find in town," King said. The chain now retails a 24-exposure roll of single prints at $2.96.