New Lighting Landscape

How many retailers does it take to change a light bulb? All of them, starting in 2012

Over the past several years, consumers have had the opportunity to replace their traditional incandescent light bulbs with more expensive, but more efficient and longer lasting, compact fluorescent light bulbs (CFLs). Starting in 2012, it will no longer be a choice but a mandate to replace their traditional bulbs.

The mandate comes from the Energy Independence and Security Act of 2007, which, among its provisions, stipulates that incandescent bulbs will be phased out between 2012 and 2014. As of Jan. 1, 2012, 100-watt bulbs can no longer be manufactured or imported into this country, followed by 75-watt bulbs in 2013 and 60- and 40-watt bulbs in 2014. In California, a state-ordered phaseout will commence in 2011.

Consumers will be able to purchase remaining inventories of incandescents during the phaseout period. But once those are depleted, retailers can only offer a selection of energy-efficient lighting options that includes CFLs and halogen and LED bulbs. Only CFLs are now commonly available, with halogens and LEDs just beginning to make their presence felt in supermarkets.

Another regulatory change, which will take place starting in mid-2011, is the Federal Trade Commission's new label requirement for light bulb packaging. For the first time, the label on the front of the package will announce a bulb's brightness in lumens [2], rather than its energy in watts, as well as its estimated annual energy cost.

In anticipation of 2012, Valu Merchandisers, the GM/HBC subsidiary of Associated Wholesale Grocers [3], Kansas City, Mo., has been shifting its bulb assortment to greener products for some time. “Our planograms over the past four to five years have been upgraded to CFL products and halogens,” said Bill Dunkle, general merchandise manager, Valu Merchandisers. “We're trying to move on.”

His planograms, for example, have been designed to feature CFLs at eye level. The emphasis on energy-saving bulbs is born out in the percentage of bulb sales they represent for Valu Merchandisers — about 45% — considerably higher than the industry norm.

But many retailers are waiting until 2012 before making any major changes. “They don't want to do major resets because they know that in 2012 the whole landscape will change,” said Pamela Price, marketing manager for retail, Osram Sylvania, Danvers, Mass., the second-leading provider of bulbs in the supermarket sector, with 23.2% market share (trailing GE Lighting with 49.2% ), according to SymphonyIRI Group, a Chicago-based market research firm.

Tandy Arrant, general merchandise business manager for United Supermarkets [4], Lubbock, Texas, will prepare for 2012 by meeting with his representative from GE Lighting, Cleveland, his bulb supplier. “When he says [incandescents] are phasing out, we'll start changing at that time,” he said. Arrant expects his offerings of CFLs to expand and is proactive about making sure United carries new products.

Francois Lebrasseur, channel development manager, GE Lighting, suggested retailers start thinking about how to “guide consumers to the right bulb” in 2012 with signage, Web content and associate training.


While 2012 looms as a milestone for retailers, the emergence of CFLs over the past several years, combined with the economic downturn, has already roiled the mass-market (food, drug and mass merchant) sales of light bulbs.

Dollar sales of bulbs in food, drug and mass outlets dropped 6%, and unit sales fell 6.8%, during the 52 weeks ending Sept. 5, 2010, continuing the downward trend of the past three years, according to SymphonyIRI. The dollar and unit sales decline in supermarkets alone — which account for 59% of mass-market bulb sales — was a bit steeper, slipping 8% and 8.4%, respectively.

According to Price, CFLs last eight to 10 times longer and use 75% less energy than incandescents. The fact that CFLs don't have to be replaced as often as the incandescent bulbs they have replaced “is definitely one of the drivers” of the unit and sales declines seen by mass-market outlets, she noted.

Dunkle also ties the declining sales of light bulbs to the longevity of CFLs, which he said consumers buy 3% less often than incandescents.

The growth of CFL sales has helped to land them in 19% to 22% of light bulb sockets in the residential market, said Price. The sales have been abetted by celebrity endorsements, sales of multiple-bulb packs and rebates from utility companies. “Over the past several years, we've seen people moving away from traditional incandescent bulbs to more energy-efficient products,” said Price. “Incandescent sales are declining and CFLs are going into sockets,” she added, though she acknowledged that CFLs are not growing at their previous pace. Moreover, they have found greater acceptance on the coastal areas of the U.S., where electric rates are higher.

At United Supermarkets, CFLs sales have “steadily increased” and now represent between 20% and 25% of bulb sales, said Arrant. “The knowledge is out there about what energy savings they offer.”

But some consumers have found fault with CFLs for the harsher appearance of the light and the twisty shape of the bulb. In addition, CFLs contain a small amount of mercury that needs to be disposed of when the bulbs break. “Most people don't realize that CFLs contain mercury,” said Arrant.

Disposal has also been an issue for CFLs, since putting them in landfills exposes the environment to mercury emissions, though localities vary on disposal restrictions. Some retailers have put out bins for customers to drop off used CFLs, said Dunkle.

The tough economy is another factor impacting bulb sales, causing at least a temporary slowdown in CFL movement and upsurge in lower-priced incandescent sales. “Our piece count is up but they're buying lesser-priced incandescents,” Dunkle said. Prior to the recession, energy-efficient bulbs had been experiencing double-digit growth. “Everybody wants to be more energy efficient,” he said, “but with the decline in the economy, they can't afford them. Hopefully, that will turn around.”

With the growth of higher-priced CFLs over the past few years, the average price of a bulb has increased steadily to its current level of $3.06 in supermarkets, according to SymphonyIRI. Despite the rising prices, consumers favor branded bulbs, with private label accounting for just 16% of supermarket sales. In FTC surveys, consumers said branded bulbs “gave them a feeling of higher quality,” said Price.

United Supermarkets has been able to buck the declining bulb sales trend — achieving flat sales this year — by promoting bulbs about three-quarters of the time in its ad circular. “It's a very competitive category,” said Arrant. “We have 9 to 15 feet for bulbs while Home Depot has an aisle. So we try to be competitive on price.” Because of CFLs' higher price, “we notice a substantial lift in sales when we promote them,” noted Arrant. But the promotions cause margins for bulbs to be lower than those of other GM categories, he added.

Valu Merchandisers is also seeing flat light bulb sales rather than a decline, said Dunkle. Valu Merchandisers, which also carries GE bulbs, has been aggressively pushing sales of both incandescent and energy-saving items with displays, ads and temporary price reductions, he said. Bulbs are given extra promotional support for Earth Day and in the fall.

Price is taking a more optimistic view of light bulb sales trends, noting a slowdown in sales declines. “We're seeing some data that people are spending money on light bulbs again — all types, incandescent, CFLs, LEDs and halogens.”


Though the economy is currently affecting bulb sales, suppliers and retailers are looking ahead to 2012 and readying the new breed of energy-saving products, particularly halogens and LEDs. Several major grocery chains in the Northeast are already inserting halogen bulbs into their planograms, despite suggestions that they could wait until 2012. “They want to do the right thing and offer energy-saving choices now,” Price said. United's halogens — mostly for flood lighting and recessed lighting — so far account for about 5% of bulb sales.

Halogen bulbs have the advantage of resembling incandescents while offering the same light quality. Similarity to the look and feel of incandescents is important, noted Price. “Let's face it, people have had [incandescents] for 100 years.” Halogens also have about the same lifespan as incandescents, but consume 28% to 33% less energy. In terms of price, halogens fall between incandescents and CFLs; a two-pack of halogens often retails for $3.99, compared with $4 to $6 for a two-pack of CFLs.

But the bulbs that may have the biggest long-term impact are solid-state LEDs, which last from 25 to 40 times longer than traditional bulbs. Like halogens, LEDs resemble a traditional incandescent in shape and lighting.

Dunkle sees the future potential of LEDs and has started carrying a few LED spotlight bulbs. But for now, LED price points — they were recently selling for between $19 and $45 apiece at Home Depot — are outside an acceptable range for supermarkets, he said. “I don't see LED being a big part of the business for the next few years.”

LEDs will be the bulb of the future “when the cost comes down,” agreed Arrant, adding, “Consumers haven't realized the benefits of them yet.” So far, United carries an LED nightlight.