IMPULSIVE SPENDING

Sticking to the basics -- gum, mints and magazines -- is the front-end formula most stores find themselves going back to. Retailers are cleaning up the cashier area and opting for a neater, more organized approach to checkouts."We're trying not to overcrowd the checkstands. It's more comfortable for the customer, and it doesn't cause a fight with the kids every time they walk through the register,"

Sticking to the basics -- gum, mints and magazines -- is the front-end formula most stores find themselves going back to. Retailers are cleaning up the cashier area and opting for a neater, more organized approach to checkouts.

"We're trying not to overcrowd the checkstands. It's more comfortable for the customer, and it doesn't cause a fight with the kids every time they walk through the register," said Dixie Young, nonfood supervisor for Tidyman's, Greenacres, Wash.

The goal is to get a comfortable array of merchandise that will appeal to all customers, she explained, and drive them to make an impulse purchase. Mixing in products that have consistently produced profits with a few new items has proven to be the best method year after year.

Taking this approach seems to be the trend for the retailers that SN spoke with.

"You go into some stores and you can hardly see the cashier because you have to weave through all the different mazes of displays," Ross Nixon, chief operating officer of Dahl's Food Markets, Des Moines, Iowa, said. "That sort of operation makes a little more money off their front end, and there's nothing wrong with making a little extra money. But we like that experience for our customer up front to be a clean, neat shopping experience."

Stores are also making a point to change the front-end displays only every one to three years, not succumbing to the allure of holiday and entertainment promotions. Changes in front-end displays and merchandise are spread out and minimal, and can depend on several elements. If the display rack is in bad shape, or is not meeting the customers' needs, often retailers will reconsider its value.

"It's basically determined by what the customer wants," said Nixon. "We want to sell what they want, not what we want to sell."

Of course, making money is still a top priority for retailers. Though the appearance may be cleaner, the basic gum and mint products are increasing in variety, and taking over a lot more prime space. With last year's introduction of Listerine PocketPaks, which garnered over $85 million in sales, other companies have quickly followed suit with their own twist on the popular product. Eclipse Flash Strips from Wrigley, Myntz Instastripz from Vitech, and Altoids Strips from Kraft are vying for a spot not only in the over-$100 million industry, but also in the front end.

"These usually are items that would not have appeared on the customer's shopping list," said Steve Broadway, category manager for Boise, Idaho-based Albertsons' Photo/Lobby Shop. "The goal of the front-end merchandise selection is to provide our customers with a selection of appealing and useful items in a convenient location."

According to a study conducted by Dechert-Hampe & Co., 72% of shoppers have bought gum or mints in the front end, with 63% buying them once a month or more. In the candy category, 58% of shoppers have purchased an item once a month or more at the checkout. Dechert-Hampe & Co. is a consulting firm with offices in Northbrook, Ill.; Trumbull, Conn.; and Mission Viejo, Calif., which specializes in marketing, sales and logistics solutions for consumer-centric manufacturers and retailers.

These impulse buys have added up to higher profits, both for retailers and candy companies. In the total non-chocolate candy category -- which includes licorice -- sales were over $1.3 billion in supermarkets, according to John McIndoe, director of public relations for Information Resources Inc., Chicago. The 3.5-ounce bag of Twizzlers, which would be sold in the front end, had a total sales of $58 million.

The net sales for Wrigley in 2002 was $2.7 billion, with 22.9% in new product sales, up $344,899 from 2001. The total sales for the entire gum category was $536 million, according to IRI, with Wrigley's Extra Sugar Free Gum leading in sales with $93 million -- nearly double the amount of Trident Sugarless Gum, the second-place category leader.

Mints and gums have taken over much of the front-end real estate previously allocated to candy and chocolate. At Dahl's they make up two-thirds of the front-end displays, with candy and magazines dividing up the other 25%. Chocolate still remains a powerhouse in the front end, however, with $2.4 billion in sales last year, a 1.9% increase from a year ago, according to IRI.

With the introduction of new products and the revamping of others, Wrigley's has stepped into the limelight for retailers as the perceived front-end leader.

"Wrigley's products have probably seen a good increase just by changing their packaging," said Beth Jones, grocery buyer, Ukrop's Super Markets, Richmond, Va. "They didn't really change their product. They just gave it a new packaging, a new wrapping, and it really helped their image."

The blueprint of mints, candy and magazines has stayed the same, but the products themselves have experienced a complete remodeling. Traditional stick gum is being replaced with pellet gum, which often promises consumers fresh breath, white teeth and improved dental care. The onslaught of mint- and cinnamon-flavored products is overpowering the products aimed at children.

"There has been a decline in the kid's gum -- your watermelons, strawberries," said Young [from Tidyman's.] "LifeSavers are also dropping. They are being replaced by the strips and the pellet gums." Wrigley plans to counteract that decline in kid's products by introducing the first non-mint pellet gum, Juicy Fruit Strappleberry and Grapermelon, as well as two new Orbit flavors geared to a younger crowd.

"The LifeSaver group is more the 50 and over," said Nixon. "The new items are more to the 20 to 40 group." Apparently, even though the older crowd is attracted to these mints, they are still not buying them as much. LifeSavers plain mints experienced a 6.6% drop in sales over the past year, and their CremeSavers and Hard Candy each experienced an over 17% drop.

Products like chips, videos and HBC items are being phased out of the front end in an attempt to simplify. While they are still very popular in other sections of the store, the front end is being reserved for "handheld" items that are intended to be consumed immediately. In response to this uncomplicated approach, companies like Nestle and Hershey are putting out smaller, easier-to-carry products. According to Jones, Nestle is coming out with a new brownie bar and a new cookie bar in early September.

Another popular candy-like item that is vying for space in the new simplified front end is the low-carb meal replacement bar. Packaged to look like candy bars, the new products appeal to consumers following the low-carb diet made famous by Dr. Atkins. In addition to diet bars, energy bars and meal replacement bars are taking a stab at the front-end market as well. "We've taken one checkout and made one side completely dedicated to all the different kinds of fitness and energy bars," Jones said.

Along the same heath-conscious lines, sugar-free candies are increasing in volume. Yet the traditional candy like Snickers and York Peppermint Patties still reign supreme. Nixon reported that Snickers makes up 35% of his entire front-end candy market at Dahl's. Overall, the total sales for Snickers packaged less then 3.5 ounces, a popular size in the front end, jumped 30.7% to $50.6 million.

Even though the trend of overcrowding the front end with candy, toys, videos and HBC items has fallen by the wayside, retailers still see some changes in the future. The continuing trend of mint strips, pellet gums and chocolate candies is expected, along with a few new surprises.