PAPER COSTS HOLD BACK BTS PROMOTIONS

Soaring paper costs left many of this year's supermarket back-to-school promotions with reduced-count filler paper packs and fewer multiple-priced notebooks.In ads that broke Aug. 3, Winn-Dixie's Tampa, Fla., division played down many paper products, focusing instead on single 150-count filler paper at 77 cents. Until this year, 200-count filler paper packs had been featured merchandise.Due to increased

Soaring paper costs left many of this year's supermarket back-to-school promotions with reduced-count filler paper packs and fewer multiple-priced notebooks.

In ads that broke Aug. 3, Winn-Dixie's Tampa, Fla., division played down many paper products, focusing instead on single 150-count filler paper at 77 cents. Until this year, 200-count filler paper packs had been featured merchandise.

Due to increased demand and not enough supply, paper costs have gone up an average of 50% to 60%, according to executives interviewed by SN. In some cases, depending on the type of paper, costs have even doubled, forcing many retailers to shift their attention from filler paper to back-to-school accessories.

The 100 supermarket operators supplied by Supervalu's Anniston, Ala., division featured 70-count notebooks priced at four-for-$1 as the lead ad item. "With filler paper prices practically doubling, it necessitated going with a different item at a good retail to keep a low-price image for the entire category," said Randy Coleman, marketing manager for general merchandise and health and beauty care at Supervalu. John C. Grubb Co., Seymour, Ind., did not feature as many notebooks as in past years, according to Tom Weasner, advertising manager.

"We cut back on notebooks in ads this season," Weasner said. "We usually don't advertise filler paper due to 30-cent retails by the Wal-Marts and Kmarts of the world, which is about 30 to 40 cents below our cost."

Fleming's Houston, Texas, division avoided playing up higher-cost paper items in ads. Instead, retailers offered backpacks priced at $15 filled with school merchandise approved by local school districts, said Randy Childers, division nonfood sales manager at Fleming.

The backpack and items inside were offered free to shoppers who used a coupon booklet worth $40 toward other merchandise, said Childers.

In addition to Crayola crayons, pens and pencils and portfolios, ads carried 200-count filler paper at two-for-$1 compared with four-for-$1 offered last year, he added. Acme Markets of Virginia, North Tazewell, Va., held last year's 69-cent price point for its leading filler paper feature, but promoted a 150-count pack instead of a 200-count, said Bill Kisker, purchasing manager of grocery, dairy and frozen food. Acme had 50-count wireless notebooks at two-for-$1 vs. three-for-$1 last year. Also, portfolios were offered at five-for-$1; a 10-pack of pencils at 59 cents; Papermate pens, 10-pack, $1.29; combination locks, $1.99, and correction fluid, buy-one-get-one free. Bed pillows for college students were retailed at $3.99.

Rosauers Supermarkets, Spokane, Wash., decided to lead with a basic variety after it found that trying to lock in a final price in the spiraling filler paper market back in February was difficult. "We featured instead more of the basics, like pencils, calculators and insulated lunch bags at prices from 69 cents to $12," said Norm Carpenter, director of general merchandise. Meanwhile, back-to-school promotions and merchandising efforts ranged from special displays to community tie-ins.

The Winn-Dixie division's 114 stores built product displays featuring the advertised specials with signs that "gave the products a bigger play," said Marc Sutherland, director of merchandising. The advertised specials were in addition to the chain's "everyday low-priced school and stationery items our customers are able to purchase at a 20% discount throughout the year," added the Winn-Dixie executive.

At Grubb, the back-to-school season was kicked off with the traditional kids' week, a 15-day event in August to boost traffic at its 25 stores.

"It's something we've done for many years and it is highly effective in bringing parents in too," added Weasner. During the second and third weeks of the month, stores ran contests, such as a paper plate toss for youngsters aged 3 to 12. Prizes included bicycles, snacks and soft drinks. Fleming retailers tied-in the free backpack with the coupon book offer to raise funds for local charity groups and the Boy Scouts. Volunteers from these organizations stuffed the backpacks with school supplies at store level. Childers said Fleming reimbursed retailers who made donations to the community groups that assembled the school bags at stores.

In other promotions, Acme arranged its school supply assortment along the wall of value close to grocery specials of candy, pudding cups and small snack cakes.

At Supervalu, back-to-school goods also were merchandised with related grocery specials of snack packs, juices and cereals, according to Coleman.