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It's a bright niche at supermarkets.With nearly a 50% jump in sales at grocery stores last year, candles, especially scented ones, are in demand and making money for retailers.The surge in sales is related to other niche products, such as specialty bath, soothing nature sounds, New Age CDs and home fragrance and decor, all designed to ease the strain of living in a time-compressed world. Many of these

It's a bright niche at supermarkets.

With nearly a 50% jump in sales at grocery stores last year, candles, especially scented ones, are in demand and making money for retailers.

The surge in sales is related to other niche products, such as specialty bath, soothing nature sounds, New Age CDs and home fragrance and decor, all designed to ease the strain of living in a time-compressed world. Many of these items have sold well at specialty stores and are now being merchandised by grocery chains to various degrees.

Raley's Supermarkets, West Sacramento, Calif., for example, devotes 16 feet of space to candles at some units, mixing candles with potpourri and scents to create a home-fragrance center, said Bill Roatch, category buyer.

"What you see our managers do are knockoffs of gift stores. Managers seeing that trend [in gift stores] might try to create something similar with their stores. The manager is given the localized autonomy at store level to create a niche based on what he sees he can do in his area," Roatch said.

For the 52-week period ended Dec. 28, 1996, sales of candles and accessories totalled $238.2 million at food stores, up 49.4% compared with the previous year. Candle sales at drug stores were $89.6 million, up 29.8% for the year. And sales at mass merchandisers were $331.3 million, up 55.4%. Total candles and accessories sales came to $659 million, up $49.2% compared with the previous year.

While there was robust growth in traditional candles, new products contributed significantly to the category at supermarkets, said Doug Handler, director of research at ACNielsen, Schaumburg, Ill., which provided the statistics.

The changing bath-and-body marketplace, with its emphasis on spa products, has driven manufacturers to introduce aromatherapy candles.

Interest in the aroma side of the business is exemplified by a new trade show called Extracts, produced by George Little Management, New York, which begins this week and will run concurrently with the New York Home Textile Show, April 12 to 15, at the Jacob Javits Center.

"People are using candles for relaxation. Another area of growth is in scented candles [sold in glass holders]. People are using them in many different rooms of their house. They are using them for air care and to keep a very nice, fresh scent in the house," said one manufacturer.

"Scented candles are pushing the candle category," commented another source.

Last September, American Greetings, based in Cleveland, introduced a product line of 6-inch candles in reusable decorative jars, with a choice of pine, cinnamon, vanilla and floral scents. In February new spring fragrances were added to the line, including peach and apple. The jar candles have a suggested retail price of $9.99.

Last month, McAuley's, based in Memphis, Tenn., introduced AromaGel Scented Clear Candles in glass containers. Initial fragrances included mulberry, cinnamon, springtime, gardenia and vanilla.

Candle-lite, Cincinnati, has introduced scented aromatherapy candles for supermarkets, priced between $5.99 and $9.99.

The home-decor department at Raley's may include candles, fragrances, prints, art, wall hangings, candle holders and designer pillows. "We don't have a defined area specifically for these items. Some of the stores have extra promotional space. In between seasons, people will take the opportunity to put in a home-decor section for a few months."

The average candle section at Raley's takes up 4 feet in the greeting card department. The chain stocks tapers and votives in the department. Some stores also have designer and floating candles. Candles range in price from 25 cents to $10. Margins are around 45% to 50%, Roatch said.

"Margins are high on candles. It is a category that supermarkets like because everybody likes to make money on candles. You don't have to give candles away," said a supplier.

At Ray's Food Place, Brookings, Ore., margins on candles average 50%, said Dan Van Zant, director of general merchandise and health and beauty care. "It's a high-margin item. Mass merchandisers and specialty shops pose the most competition for supermarkets."

Nine-inch tapers average about 79 cents and 12-inch ones average about 99 cents. Color candles range from $2.99 to $4.99. Two votive candles cost 99 cents.

Van Zant said he raised the price on candles. "It's not price-driven. It's a high-impulse item. Our greeting card supplier told us that we were too low, and that you could get roughly 20% more for the same item without reducing sales. We did raise our prices, though I did not want to raise them as much as suggested by our greeting card company. I moved the 12-inch taper from 89 to 99 cents. I wanted to keep it under $1."

Candles are showing strong movement at Harps Food Stores, Springdale, Ark. "Price points are generally two for $1 for small candles and we go up to larger potpourri candles for $7.96," said Art Bundy, general manager of Harps Distribution and General Merchandise, a division of Harps Food Stores.

Harps has two regular candle sections: a smaller one in the greeting card section and a 4-foot section next to scented items -- such as air fresheners, potpourri and carpet fresh -- in the general merchandise area, close to the laundry detergents and household cleaning aids. At Christmas, Halloween and Fourth of July, Harps also stocks specialty and novelty candles in the seasonal aisle.

Van Zant at Ray's also agreed that seasonal sales for candles is strong. "At Christmastime we do a phenomenal job on white, green and red candles. They do well at Easter time as well. Sales at Halloween also pick up," Van Zant said.

Ray's is in the process moving candles from the cleaning aisle to the greeting card department. "We have increased sales by 10% by doing that. The customer purchasing a greeting card for a special occasion may pick up a decorative candle at the same time," said Van Zant.

The retailer merchandises candles in a 4-foot section that contains 9- and 12-inch dinner candles; 4- and 6-inch-high round pillar candles, which are used for decorative occasions; and carriage candles (which are in a glass container and are used at holiday times or for special occasions). Ray's also sells votives and glass votive holders. In addition, Ray's sells household emergency-type candles, birthday candles and candlestick holders.

Van Zant pointed out that the candle purchaser is the supermarket's core shopper. He estimates that 80% of candle buyers are women.

Ray's targets its candle selections to different demographic groups, depending on where its supermarket is located. "Candles sell across all social and economic classes," Van Zant stated. In higher-income areas, we sell more of decorative-type candles. "We sell religious-type candles in ethnic areas to Spanish people."

Hispanic customers, who buy candles with religious inscriptions, are a specific target market at Houston-based Fiesta Mart, with 34 supermarkets in Texas. "We tend to have a good display of those candles in many of our stores," said Rafael Hernandez, marketing director.