RETAILERS POLISH HOUSEWARES AFTER BRIGHT FORECAST

Supermarkets are implementing new strategies in light of a positive turnaround in housewares sales.Retailers, wholesalers and market analysts generally agree with Kurt Bernard, president of the forecasting firm Bernard's Retail Trend Report, Upper Montclair, N.J., that "the housewares industry is going to do extremely well this year. The reasons are a surge in housing starts, and an ongoing demographic

Supermarkets are implementing new strategies in light of a positive turnaround in housewares sales.

Retailers, wholesalers and market analysts generally agree with Kurt Bernard, president of the forecasting firm Bernard's Retail Trend Report, Upper Montclair, N.J., that "the housewares industry is going to do extremely well this year. The reasons are a surge in housing starts, and an ongoing demographic shift to a growing number of aging baby boomers.

"Home sales are soaring out of sight. Every time a home is sold people spend on refurbishing, including their kitchens," he said.

Bernard also said the aging of America will help boost the housewares category over the longer term. "The older generation is less prone to splurge on a thousand-dollar garment. Instead, they invest in the home -- and this trend will remain."

At Valu Merchandisers, the nonfood subsidiary of Associated Wholesale Grocers, Kansas City, Kan., officials are bullish on housewares, and plan to expand its Chef's Table, a kitchen shop format, to another 10 retailers.

Chef's Table sections, rolled out at three stores last October, "are doing well," said Dick Swain, VM's executive vice president. "We're moving forward in our Chef's Table Shops with more upscale items priced halfway between products sold at department stores and supermarkets."

The mix includes small kitchen appliances like toasters, water-purification systems and boxed pepper mills, gadgets, tools, bakeware and cookware. Goods retail up to $39.

The 40- to 120-foot Chef's Table section is triggering good impulse sales, said Swain, who is also chairman of the board at General Merchandise Distributors Council, Colorado Springs, Colo.

"We're trying to make that shopping experience less mundane and a little more exciting by giving the customer something new to see," he added.

Soft-handle and stainless-steel implements are popular sellers, Swain noted. "We're giving customers a chance to buy these while they are still in the supermarket."

The aging of America and the upswing in housing starts presents new housewares opportunities for A&P, Montvale, N.J., said Andy Carrano, vice president of marketing and corporate affairs.

Housewares sales are trending positive for the chain, he said. "People are trading up to better brands and quality."

What caught the eye of A&P buyers at this year's International Housewares Show were glassware and new fashion colors in party goods, candles, dishware and Rubbermaid products.

A&P "will evaluate these to decide how they would fit into store-level shelf planograms," added Carrano.

Supermarket and wholesale buyers said they remain confident about the category's outlook. They anticipate strong sales for kitchen household products, particularly stainless-steel and soft-handle tools and implements, countertop appliances, dishware and candles.

But a downturn in consumer spending could eat into sales and put pressure on margins, said William Steele, an analyst at San Francisco-based Buckingham Research.

"It's going to be a difficult year. I'm worried about consumer spending. If we do have a little softening in the economy, it will be felt there. Discretionary items, such as household products, could suffer. In that case, pricing could become even more deflationary, resulting in lower volume, prices and lower profitability."

For Genuardi's Family Markets, Norristown, Pa., housewares is on an upward surge with nonfood executives upbeat over department performance. "We project sales growth of 20% for the category this year," said John Stahl, director of nonfood.

To beef up sales in kitchen implements, Genuardi's introduced last month additional upscale items. These include a new 12-foot section of Roscan gadgets, priced from $2.99 to $6.99. The cookware mix was broadened with a new 8-foot set of Ballarini pots and pans, priced between $10 and $20.

"This is what customers want. It's the kind of product they're buying at major home-furnishings stores," said Stahl.

The chain also is carving out additional housewares display space. "Consumers have grown more aware of fashions and designs in kitchen tools. Supermarkets need to move into selections carried by department stores and cookware shops," Stahl added.

Ray's Food Place, Brookings, Ore., has decided to revamp its housewares and kitchen tools and gadgets set, said Dan Van Zant, supervisor and buyer for general merchandise and health and beauty care.

Display space, product lines, selections and promotions are being evaluated in an effort to improve last year's flat category sales, said the retailer.

"We're reviewing ways suppliers can assist us in growing the category," he said.