FOOD LION STORE TESTS NEW FORMAT FOR HBC

SALISBURY, N.C. -- Food Lion here has created a new one-stop shopping image for its health and beauty care department in a test store, according to Pam Kohn, vice president of operations for the Central division of the chain.The concept -- which includes expanded cosmetics lines, private-label vitamins and a new hair care section -- opened in a new Wake Forest, N.C., store late last month. Though

SALISBURY, N.C. -- Food Lion here has created a new one-stop shopping image for its health and beauty care department in a test store, according to Pam Kohn, vice president of operations for the Central division of the chain.

The concept -- which includes expanded cosmetics lines, private-label vitamins and a new hair care section -- opened in a new Wake Forest, N.C., store late last month. Though the HBC department runs about 1,860 square feet, compared with 750 square feet in an average Food Lion, expanding the size was not the retailer's sole objective, said Kohn.

"We've tried to make our department a consumer-friendly destination for all of their HBC needs," said Kohn. "We don't want them to think of Food Lion just for groceries, meat and produce anymore." The new format is planned to roll out to three new stores in Virginia by the beginning of next year. The 1,048-store chain created the store-within-a-store image because it found that its customers wanted their HBC shopping to be more convenient and fun. Food Lion made sure that the department maintained the retailer's low-price image, Kohn stressed.

Remerchandising, line extensions and cross-merchandising were key to presenting the one-stop shopping concept. To achieve this, selected grocery and general merchandise items -- including bar soap -- were brought into HBC. Also, the No Nonsense and L'eggs lines were expanded to include trouser socks, tennis socks and tights. Other features include expanded Maybelline and Cover Girl cosmetics lines, and a new hair-coloring section that contains

a small computer that helps consumers get a sneak preview of hair colors before they take a product home.

"It's one of the fun things we've added," said Kohn.

At the same time, adult nutritional supplements -- such as Boost and Ensure -- and diet aid products, were brought in from grocery and merchandised with vitamins, creating a "health awareness" section for the first time. Food Lion has also launched a line of private-label vitamins that contains about 45 stockkeeping units.

"We really feel that it will give Food Lion a presence in the vitamin category. We didn't have a real representation up until now. So far, we are very pleased with how well the line is doing." The chain has used the front gondola in the center section of the department to promote private label. About 25% to 30% of Food Lion's HBC SKUs are now devoted to private label. The new placement is designed to allow customers easy access to the value-sensitive line.

The front of the department is highlighted with new endcaps that are flexible enough to be merchandised in a variety of ways. They include peg hooks, movable shelving and baskets. Bright colors, a sense of space and eye-catching signs all help the new HBC image.

"Our statement to the consumer is: Here are all your health and beauty care needs in a bright, fun, new setting. The new area, placed in the center of the store, is more easily shopped. It has new racking systems that make it easier to see the product." Other introductions include hair accessories, cosmetic bags, travel accessories, and small personal care appliances such as hair dryers and curling irons. Soon, items such as specialty soaps and a body and bath section will be added.

The retailer, which has an every day low pricing system, is in the process of trying to assess who its chief competition is in each retail arena.

"We want to be the low-price leader in every market we are in," said Kohn. "And we have to pay attention to Wal-Mart, which has such a strong outreach program."

The chain worked with its vendors to gather information on products and selection. But Food Lion's category management team -- including Elwyn Murray, director of category management, and Terrie Rush, category manager for HBC -- brain-stormed and worked hands-on to create and implement the concept. "The Wake Forest store is definitely a test situation," said Kohn, "but we are going to wait and see which of these approaches will work and which will be easily adapted to our existing stores. Then we will translate anything that really works to other stores."