SCHNUCKS INTEGRATING NATURALS, ORGANICS

ST. LOUIS -- Schnuck Markets here is integrating its natural and organic products as it remodels existing units or opens new stores, betting the items will sell better if merchandised alongside regular Center Store items.The new 63,000-square-foot Stonebridge Crossing store in Memphis, Tenn., is a recent example. Before that, the retailer completed similar transfers in Lake St. Louis, Mo., Collierville,

ST. LOUIS -- Schnuck Markets here is integrating its natural and organic products as it remodels existing units or opens new stores, betting the items will sell better if merchandised alongside regular Center Store items.

The new 63,000-square-foot Stonebridge Crossing store in Memphis, Tenn., is a recent example. Before that, the retailer completed similar transfers in Lake St. Louis, Mo., Collierville, Tenn., and Green River, Ind. Segregated naturals sections still exist in older stores like Lindbergh, where a Whole Health Center that includes refrigerated and frozen foods stands near the pharmacy.

"As we build new stores, we're trying to increase space in the center of the store to let us incorporate the items," said Lori Willis, corporate spokeswoman. "At this time, we don't have any way of knowing whether or not this is the move that will be supported by our customers. But right now, it does seem to make a lot of sense to make it easier for them to [find] these items throughout the store."

The changes aren't limited to natural and organic items. They also encompass products that fall under the larger whole health umbrella. For example, Schnucks integrates its low-carb Center Store products, identifying them in-aisle with "The Low Carb Choice" signs.

Schnucks' approach is in line with conventional stores, which are leaning toward integration, said Jay Jacobowitz, president of Retail Insights, Brattleboro, Vt., which consults to natural food retailers.

For operators that lack a strong natural food shopper base, integration is a way to expose and convert non-natural food shoppers to the category, he said. In most cases, the products can be offset in the regular display with shelf-talkers or related materials. This middle-of-the-road approach has been employed by mainstream retailers like Kroger, in some market areas, to good effect.

Still, a number of retailers operate under segregated formats. Some operators known for high quality, like Wegmans Food Markets, Rochester, N.Y., and Stop & Shop, Quincy, Mass., have embraced a store-within-a-store model. Sweetbay, the format that's replacing Kash n' Karry in Florida, also is taking the segregation approach to its naturals sections, copying the "Nature's Place" format of another Delhaize America banner, Hannaford Bros., Scarborough, Maine.

Segregation works for Wegmans and Stop & Shop because they showcase their natural/organic products with prominent store position and sometimes distinctive fixtures, flooring and lighting, Jacobowitz said. Tradition counts, too. Wegmans' store-within-a-store model has been around for 20 years, so customers are trained to look for natural products there, he said.

Hannaford's Nature's Place is a 3,800-stockkeeping-unit section that's differentiated by its decor, color, flooring and lighting, Sweetbay spokeswoman Caren Epstein pointed out. "Our research has suggested, and our customers are telling us, it's a convenience for them to be able to find [natural and organic products] all in the same place," she said. "Our customers are telling us it's something they don't want to have to go to a specialty store to get."

"Either way can work, and the most important component is management's attitude," Jacobowitz added. He said sets that are poorly maintained and stocked send the message that the store isn't behind the products.

"If you're going to get in the category, embrace it and be convincing," he said.