NASHVILLE, Tenn. -- Kroger Co.'s division here is about to adopt a new display tactic in its pet aisle in a bid to boost canned sales in the struggling dog food category.
The project is a case in point of how better category management can result in straightforward sales and profit improvements, even for the most troublesome of center-store categories.
Simply put, the division is dropping a vertical set that segregates dry and canned dog foods in favor of a more horizontal, mixed canned-over-dry shelf reset.
Initial tests of the new Kroger shelf program showed canned dog food volume had leaped 39% on average wherever the experimental reset was used.
The new horizontal wet/dry set is in Kroger banner stores at Hopkinsville, Ky.; Hermitage, Donelson and Lawrenceberg, Tenn., and at
three units in Nashville proper. Shoppers at all 69 Kroger-Nashville stores should be seeing the complete changeover by next March, following a review of the category's assortment.
The effort is one part of a market-by-market drive by the Cincinnati-based supermarket chain to improve sales.
In another case, the company's Atlanta division recently took the route of educating consumers -- a strong suit of the pet specialty store -- when it started running weekly newspaper ads about pet care.
The chain's national strategy also touches on private label, superpremium lines, an emphasis on certain sizes, and cross-merchandising of pet food and supplies, said Rhett Williams, Kroger's corporate pet food category manager.
"Superpremium dry dog food is where I think the market is going; the pet foods supermarkets have a handle on the higher quality product, and some of the national brands are tending to move toward higher end," Williams told SN.
"We are looking at extending our private-label line," he added, referring to the chain's Pet Pride label. "We're getting more into the 13-ounce premium area and getting out of the generics. We've seen a lot of interest in dog biscuits."
He also said Kroger was "moving more toward the larger sizes of bagged dog food," specifically the 25-pound and 40-pound sizes, in line with consumer preference shown in pet superstores.
The chain also is incorporating "a lot of cross-merchandising" into the effort. Williams said examples were dog treats and rawhide bones; dog biscuits, treats and toys, and cat food and litter. "It's a real plus in that category because it combines not only grocery products but general merchandise products."
Kroger officials pointed out that pet food, the seventh-largest grocery category, is under pressure.
"Our numbers showed can sales were deteriorating," said Don Williams, category manager at Kroger-Nashville, who initially agreed to set up the test in cooperation with manufacturer Alpo Petfoods, Lehigh Valley, Pa.
"The stagnation of the dog population challenges us to get a more profitable mix, which is our main interest in switching emphasis from dry to wet," said Bill Platten, the division's current pet food category manager, who took over after Williams moved on to manage other grocery categories.
"Another factor is the growth of competition in this category. We have seen the mass merchants go from 8% of the market two years ago to a projected 18% this year. The pet specialty stores are coming on strong, too, although in Nashville we're not feeling them as strongly as in Atlanta," Platten said.
To fight back, Kroger worked with Alpo to execute the shelf management program on a test basis. The idea, Kroger-Nashville's Williams said, was to play upon the tendency of pet owners to "buy dry, and then add something to it for their animals." The shelf set was designed to strongly suggest that, for a better diet, shoppers try supplementing the dry with more nutritionally complete canned food, instead of table scraps or supplements.
Platten said the tests indicated wet-over-dry was a real solution. "We had basically two groups of seven test stores each. One was a control group where we didn't change a thing. We kept the same vertical set, 28 feet for dry, 16 for canned. Then we had the canned-over-dry group.
"We were going to run it for a year, starting in January , but it was officially over in July because we found our results were very consistent at the three months and seven months monitoring points, which led us to believe we would continue to get positive results.
"We tested a four-week baseline period just prior to the test, and over the baseline period the stores had a 4% decrease in sales. The over-and-under stores reported a 24.2% increase in scanned sales overall, which works out to a total increase of more than 28% vs. the control stores. We saw a gain in really every subsegment of the dog food category," Platten said.
According to data from the shelf management program monitored by Ehrhart-Babic Associates, an independent research firm basd in Englewood Cliffs, N.J., sales of canned were up the most, by 39%; dry by 23%; treats by 33%, and semimoist by 29%.
Alpo calculates that each of the seven canned-over-dry Kroger units increased total dog food sales some $46,300 per year. The stores with the resets also moved nearly 27% more units in all dog food subsegments.
Alpo developed four TV spots to support the canned-over-dry effort, based on lessons learned from a study of value-added consumer feeding behavior done for it by ICR Survey Research Group, Media, Pa. The spots feature San Diego Zoo personality Joan Embry advising owners that dog food is as good or better than leftover people food.
Breaking in the Nashville market last January, the TV campaign is to be expanded to markets holding a third of the U.S. population beginning today, and is scheduled to run through June 1995.
The cans-are-better concept also was reinforced by a brochure titled "All Mixed Up" and subtitled "The healthy way to add meaty taste and variety to your dog's meals." The brochure contained a "buy three, get one free" offer of any Alpo canned dog food.
Three plastic pockets were used per store to offer the literature, and had to be constantly refilled by the vendor's broker.
About 20,000 copies of the brochure were rotated, along with a series of monthly double-sided pamphlets that addressed more general pet-related issues, such as obesity, heart disease and care of an elderly pet.
The supply finally ran out, reported Marty Baum, director of marketing for dog foods and treats at Alpo. "People are looking for information for their pets, and the demand we've experienced definitely demonstrates that," he said.