AMARILLO, Texas -- Affiliated Foods is meeting its goal to boost nonfood sales by 1% at some of the 300 supermarkets the co-op wholesaler services.
In a bid not only to increase sales of nonfood at retail, but for Affiliated stores to compete more effectively with alternative formats, Affiliated Foods' retailers are expanding department sizes and variety, and promoting nonfood categories in-store.
George Satterwhite, Affiliated director of nonfood, said with the greater emphasis placed on nonfood his goal is to increase nonfood sales to 6.5% of total store sales. Retailers on average have been generating about 5.5% of their total store sales in nonfood, he said.
There now are between 55 and 65 retailers that have adopted Affiliated Foods' new nonfood merchandising program. Those stores report sales up 0.5% to 1%, said Satterwhite. The program will be rolled out to all Affiliated supermarkets within the next year.
In general merchandise, the co-op wholesaler has begun to broaden categories to give shoppers greater choices.
"We're analyzing the different categories, departments, and revising the product mix to bring it closer to what customers want, and closer to actual store and regional demographics," said Satterwhite.
Affiliated Foods covers a wide geographic mix of markets and "retailers in Colorado have different seasonal product needs than retailers in southern Texas."
In Colorado, for example, plastic snow shovels are more appropriate to stock than in New Mexico and the northern part of Texas where metal shovels are more useful because the region gets more ice in winter.
Some of the first sections to undergo realignment are highly consumable products like foot care, including Dr. Scholl's; shoe care; gloves, and school and stationery supplies.
General merchandise department sizes have increased and so has the number of items Affiliated stocks in-house.
"We're now warehousing all shoe care, and some of every general merchandise department. We're not as deep in hardware or kitchen gadgets or other categories as we probably will become when we go more direct."
Affiliated anticipates it will be another year or two before it purchases most general merchandise direct through the warehouse.
"We now warehouse 75% of home-office, school and stationery products for stores, and draw some items in the cross-dock program. After we expanded our warehouse it gave us the added capacity and a larger picking area to be able to purchase the majority of [this category] for our retailers direct."
In looking at general merchandise, Affiliated also is evaluating its suppliers. "We want to analyze the categories with the idea of widening variety and bringing in other suppliers rather than being locked into one major manufacturer," Satterwhite said. Pet care is one category slated for possible expansion. "There seems to be quite a wide variety of merchandise in accessories and supplies that we have never considered," said Satterwhite.
"There are many colors, materials, packaging and product types we feel pet owners would buy if it looks different and interesting for untapped impulse sales.
"[Pet care] is something we want to step back, look at and see if we're going in the right direction."
School and home-office is another area of possible growth for Affiliated-supplied supermarkets.
"We're moving into larger assortments. Some school and home-office departments are starting to range up to 16- to 24-foot sections." In health and beauty care, retailers are featuring endcap specials from a cross section of HBC categories. "It's often increased sales of the featured items as much as 10 times normal volume," said Satterwhite.
