WHEN THE LIVING IS EASY

Spring and summer general merchandise may be all about fun in the sun for consumers. But for supermarket retailers, this ever-important category means serious business. The opportunity for capitalizing on seasonal sales in general merchandise is growing. According to last summer's Seasonal Best Practices study, conducted by the GMDC Educational Foundation, Colorado Springs, seasonal product sales

Spring and summer general merchandise may be all about fun in the sun for consumers. But for supermarket retailers, this ever-important category means serious business.

The opportunity for capitalizing on seasonal sales in general merchandise is growing. According to last summer's “Seasonal Best Practices” study, conducted by the GMDC Educational Foundation, Colorado Springs, seasonal product sales grew 10% yearly over the past five years. Non-seasonal GM sales, by comparison, fell by almost 4%.

“Over the last five years, we've sustained continual growth, and most of that has come from our seasonal program,” said John Harris, director of GM/HBC for Associated Food Stores, Salt Lake City, a wholesale company that supplies nearly 600 independent grocery stores.

Supermarkets are taking note of information like this, especially during the warmer months. They now understand better than ever the nuances of the GM market and, as a result, are incorporating well-researched, specific strategies to further hone their efforts in the category for spring and summer this year. This includes distributing detailed advertising campaigns and mailers, focusing on items with proven sales records, and merchandising products around a theme or event.

The result can be increased sales in the emphasized categories.

“2006 truly set the stage for our direction in 2007,” said Mike Isom, director of GM for Bashas', Chandler, Ariz. “We saw a marked increase in sales, and requests for products that enhanced the outdoor living experience. We anticipate this trend to continue for at least the next couple of years.”

Industry analysts praise these focused, innovative approaches to GM retailing. In many ways, they said, it's a sign that operators are taking the category more seriously, bringing it in line with the innovation levels seen in food practices — the front line for supermarkets.

“I think many of the supermarket chains overall are doing a little better and a little more focused job than they did 10 or 15 years ago,” said Jim Wisner, president of Wisner Marketing Group, Libertyville, Ill.

MORE ‘DISCRETION’

Many supermarkets would like to compete with other mass retailers and Wal-Mart for seasonal GM dollars. However, operators don't have the same amount of space to merchandise GM and they must maximize sales in the square footage they have.

With this in mind, one of the trends this coming spring and summer, sources said, is the paring down of the number of GM categories to those that will have the most impact. This doesn't necessarily mean fewer items overall — just a focus on the items that, over time, have proved to be consistent best sellers.

“They're honing in not just on items, but on categories where they believe they can be competitive,” said Ken Harris, managing director of Cannondale Associates, a consulting firm with offices in Wilton, Conn., and Evanston, Ill.

Harris mentioned greeting and holiday cards, batteries and containers as a couple of categories where supermarkets should look to compete. Not only do these fit well with the supermarket format, he said, but consumers are very market-savvy in regards to these items, and will often comparison shop for them.

“I think you are going to see more discretion by retailers who want to stay in that game in their overall promotion platform,” Harris said.

Doug Barnett, nonfood director at Brookshire Brothers, Lufkin, Texas, said that his stores are following this exact strategy. He pointed to outdoor furniture, grills and other big-ticket items as being best sellers for Brookshire during the spring and summer seasons.

“We're taking the approach of buying more of less,” he explained. “In the past I think we tried to concentrate on variety too much and have not done a good job of presentation in the stores, whereas now we're taking something like wicker furniture or a six-piece patio set and buying more pieces per location. We want to try to get the sales that way instead of selling 100 items at small retails.”

BUILDING A THEME

For many supermarkets, the need to structure offerings around specific holidays is a no-brainer. However, sources say there is also ample opportunity to build around ongoing, durable spring and summer themes, of which there are many. Doing this, they say, is an effective way to concentrate sales and cross-merchandise throughout the store during the entire season.

Bill Bishop, president of Barrington, Ill.-based consulting firm Willard Bishop, explained that savvy operators are building promotions, displays and numerous other tie-ins around the summer cookout theme.

“Supermarkets are really at an advantage because they have the full array of products to support the cookout theme: general merchandise associated with charcoal, grills and utensils and so forth, all the way to storage and serving paraphernalia for the food itself,” Bishop said. “I think what you're going to see here that's a little different is these themes launched a little more comprehensively, as a storewide or companywide retail commitment to a theme like cookout. It would seem to me that this is really going to create opportunities for synergy for general merchandise.”

These themes are numerous, and can cater to regional audiences, focusing on beach activities, camping, sports and picnicking, to name a few.

John Harris said that camping and cookout themes work particularly well in the stores Associated Foods supplies. Camp chairs sold extremely well last year, and as a result he'll order a record number for spring and summer this year.

“Usually in the month of July, we push tons of those camp chairs through our stores,” Harris said.

An effective way to hammer home these themes, sources said, is to organize an event or contest. This can include anything from a parking lot cookout to product giveaways.

Kevin Fiedler, co-owner of Ken's Supermarkets, an independent based in Aberdeen, S.D., operating seven stores, said that his chain incorporates a baseball theme throughout the summer months.

To tie in with this, each of his stores awards a Minnesota Twins weekend baseball package to one family. With this, the winning family receives game tickets, hotel accommodations and a tailgate package of food, beverages and coolers — a prize worth $1,000.

Promotions such as this, Fiedler said, emphasize his stores as a competitive alternative to big-box retailers.

“We want to impress upon customers that you don't have to go to a Wal-Mart or a Kmart or Shopko,” he said. “You can stop here and get everything you need.”

According to analysts and retailers, all this focus and market savvy are for naught if consumers don't know about offerings. That's why a number of operators are innovating the way they're advertising spring and summer seasonal items, both inside and outside of stores.

There is, however, room for improvement, analysts said.

“With your existing customers, you have to let them know that you're ready for the season, primarily through your advertising,” Wisner said.

This year will mark the first spring/summer seasonal period in which Associated Foods will send out mailers advertising general merchandise themed items, according to John Harris. He said the wholesaler will send 1.5 million mailers four times throughout the season, each coinciding with a holiday or other popular buying period, such as back-to-school.

“We've increased our focus and our intensity in terms of how we communicate to consumers that these products are in our store,” Harris explained. “That's what it's all about — if the consumer doesn't know you carry it, they're not going to pull into your store.”

IN-STORE PROMOTIONS

It's not just a matter of directing customers to stores. It's also a matter of directing customers once they're inside the store, sources said.

Bishop explained that capitalizing on themes like barbecuing, for example, require that people know that these items are available, as well as where to find them.

“There are ways to use graphics and in-store communications to project the solutions that are available in the store without turning everything upside down,” he said. “I think you see the better-practice people doing more of that.”

One approach is to create a checklist pegged to a particular holiday or buying event, then placing it at the front of the store. This will inevitably cover items that customers have overlooked, and thus capture these sales before competitors. According to analysts, supermarket retailers aren't doing enough merchandising like this.

Another area supermarkets are failing to capitalize on, analysts believe, is the marketing of multicultural holidays — particularly those of the Hispanic communities.

“You can't just slap up a Cinco de Mayo poster and expect that people are going to migrate to your store vs. someplace else,” said Robert Passikoff, president of Brand Keys, a consulting firm based in New York. “Especially in the Latino community, holidays are important, families are important and a sense of community is important.”

Multicultural promotions should play up the aspect of family, a cornerstone of these holidays for many communities. However, according to Bishop, operators shouldn't alienate customers outside these communities, as there is a high level of cross-cultural interest, especially on food-related items.

“I think with the interest in distinct flavors, with ethnic flavors, you have the opportunity to not only appeal to the local communities, but other people outside those communities who might be interested as well,” Bishop said.

A HIGHER PRICE

Predictions for top sellers this year are varied. According to the GMDC study, however, a large opportunity lies with high price point items.

Bashas' Isom said that outdoor furniture should be a hot category this season, due largely to the extended season in the warm Arizona climate.

“Upscale wicker and resin patio sets, gazebos, and barbecue and outdoor entertaining accessories should lead the list,” he said.

Outdoor furniture will also fare well for Brookshire Brothers, according to Barnett, if for a different reason.

“We had some storms — a hurricane a couple years ago — and people are still replacing what they lost,” he explained.

Texas Crawfish Cookouts

LUFKIN, Texas — February is crawfish season in East Texas, and there's no better way celebrate this than with a good crawfish boil, said Doug Barnett, director of nonfood at Brookshire Brothers here.

Stores throughout the Brookshire chain hold these boils in their parking lots throughout the month, drawing quite a crowd.

“We'll have 50 people in line to get some crawfish,” Barnett said. “It's crazy.”

Cookout events such as these are a fun, bankable way to draw attention to spring and summer general merchandise, sources said.

“Cooking out is just a natural fit for the season,” said Bill Bishop, president of Willard Bishop, a Barrington, Ill.-based consulting firm.

Grills, containers, furniture and utensils are just a few of the GM items that go along with the theme. Barnett said his crawfish boils draw attention to his lines of outdoor cookers in particular.

“And ice chests. We sell a lot of ice chests at that time,” he explained.

John Harris, director of GM/HBC at Associated Food Stores, a wholesaler based in Salt Lake City, helps encourage his member stores to hold parking lot barbecues to push general merchandise. During the summer, Associated Food Stores promotes an “All American Summer” theme, which cross-merchandises products throughout the store, including camping chairs, coolers, hotdogs, hamburgers and soda.

“They'll go out and make it a fun event in the front of their store for the weekend, cook hotdogs and hamburgers on a Saturday afternoon,” Harris said. “And they'll have all that product out on display with ads going, just making it a fun time to kick off that sale.”
— J.W.