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Supermarkets are throwing a party and everyone's invited.Fred Meyer, Giant Eagle, Harris Teeter, Hy-Vee, Ralphs, Stop & Shop and Wegmans are some of the retailers currently devoting substantial space to party goods in their stores.The shift toward more at-home entertaining, throwing juvenile parties at home and the burgeoning popularity of themed parties are contributing factors in the growing demand

Supermarkets are throwing a party and everyone's invited.

Fred Meyer, Giant Eagle, Harris Teeter, Hy-Vee, Ralphs, Stop & Shop and Wegmans are some of the retailers currently devoting substantial space to party goods in their stores.

The shift toward more at-home entertaining, throwing juvenile parties at home and the burgeoning popularity of themed parties are contributing factors in the growing demand for party centers in supermarkets, said industry sources. Accessory items such as decorations and party favors are driving much of the growth in party supplies, noted industry observers.

The party supply industry has grown into a $1.8 billion business, jumping 3% to 5% annually, according to industry sources. Supermarkets represent only 5% of that business, but the opportunity is ripe to build party sales in this retail channel, said Roy White, vice president of education, the New York-based educational arm of the General Merchandise Distributors Council, Colorado Springs, Colo.

"Supermarkets continue to be really well-placed to capture party goods sales because they have everything you need for a party," he said. This includes sections dedicated to greeting cards, general merchandise, in-store bakeries and clean-up materials.

Stop & Shop Supermarket Co., Quincy, Mass., began rolling out Everyday Celebrations party centers in some test stores last year that are also testing Toys "R" Us Toy Box departments and Office Depot-branded areas. About 19 stores currently offer these party sections, ranging from 61 to 88 feet, said Irene Freeman, new business development buyer for the retailer. Everyday Celebrations is performing "at expectations," she said, and Stop & Shop is going forward in implementing the department in all new prototypes and remodeled stores, she said.

"Every day of the year is an occasion for someone to have a party," Freeman said. "We try to make it convenient as a one-stop shop for the customer. She comes here for other party needs, why don't we help her set things up for the party?"

The sections include party favors, disposable cameras, pinatas, banners, and plastic and paper serveware featuring themed patterns like Winnie the Pooh and "Over the Hill."

Hy-Vee, West Des Moines, Iowa, is another retailer who has expanded its party supply offerings as a part of a wide-ranging plan to carry more general merchandise, said Ruth Mitchell, spokeswoman.

"It's an area we've expanded because we see that, in society today, consumers are more anxious to have celebrations, and they need the supplies and decorations to make those celebrations complete," she said.

"The creation of the party center not only encompasses what you put into the core greeting card department but it encompasses an all-inclusive marketing strategy," said Mike Colant, executive director of key accounts, supermarket channel, American Greetings, Cleveland.

Hy-Vee's party supply areas include a major focus on greeting cards, as well as gift wrap, party decorations and paper products. Its floral shops do "big, big business" in balloons, Mitchell told SN, and the retailer expands the party department when necessary to offer seasonal items according to the different holidays.

"It's our intention to create destination departments with party supplies as a way to keep up with mass merchants who are heavily invested in that area," said Mitchell.

Supermarkets have many ways to create cross-merchandising strategies related to parties throughout the year, said a Hallmark spokesman. "Supermarkets can leverage the frequency of shopper visits to tout party supplies by first having a good selection of party goods, such as Hallmark's Party Express, and then promoting the variety of party needs -- food, ice, drinks, flowers, even cleaning supplies -- that consumers need for their occasion," he said.

Some retailers have been especially aggressive in creating a party atmosphere across the store.

Since Giant Eagle, Pittsburgh, expanded its Card Party format, the retailer has gone on to promote party supplies through in-store gatherings, said Tina Flowers, director of floral and greeting cards. The expansion includes unique items under the Expressions brand from Hallmark, Kansas City, Mo., in addition to home decor products, collectibles, candles, wedding and baby gifts, Thirstystone coasters, CounterArt decorative cutting boards and Gooseberry cookbooks, she said.

The Card Party department plans to host birthday parties featuring Teddy Bear Stuffers, an activity for children that allows them to select and build their own unique stuffed bear, she said.

Seventy-five Giant Eagle supermarkets also display bakery tables that accommodate party supplies in eight to 12 party designs, Flowers said. "The function of this bakery department display is to promote Giant Eagle custom-designed cakes that match a licensed property pattern and merchandise them on the same table."

The Card Party's new format ranges from 12 to 24 feet and includes a variety of licensed children's properties, birthday, general entertaining and solid color party goods along with all necessary accessories like birthday candles, treat bags, table covers, invitations, and noisemakers. The retailer will have 25 expanded Card Party locations installed by the end of the year, said Flowers.

Recently, Stop & Shop cross merchandised balloons from the floral department by positioning a balloon corral in the party supplies section. The balloons feature the same licensed characters that are available on many of the paper cups, plates and napkins the retailer makes available to coordinate a theme, Freeman said.

"There is a greater awareness on the part of the consumer to have product for their party that matches the theme of the event, whether it is an Easter get-together for the family, or a Fourth of July party, and of course, the Thanksgiving and Christmas holiday time," said Larry Ishii, general manager, GM/HBC, Unified Western Grocers, Commerce, Calif.

"We do a very substantial business with our retailers in seasonal party goods," Ishii said. "It's in-and-out business for us, but it's been very good and it continues to grow. It's a category that we can be competitive in, pick up impulse purchases, and drive incremental sales and profits."

More often, party decor with themes incorporate hot licensed characters, especially for juvenile merchandise, Colant said. "When you have a hot license, take it out of the core department and merchandise it in the perimeter so it gets good visibility. If you merchandise party goods in the bakery area on a permanent basis, it's important your product mix is reflective of the hot licenses," he said. American Greetings has a line of licensed party merchandise featuring Nickelodeon characters Dora the Explorer and SpongeBob SquarePants.

Next year's line of party supplies from American Greetings focuses on all-occasion and adult themes, said Johanna Sifuentes, marketing manager for designware. These themes will include Happy Happy Birthday, Photo Balloons and Celebration Brights, she said.

The challenge for supermarkets is to provide the right selection and price, said the Hallmark spokesman. "Finding ways to improve their offerings and link with the other products they carry is the key to maximizing party goods sales," he said. "We believe either a legitimate destination department that carries enough selection to be credible, or a well-planned outpost-based strategy are the two best approaches for supermarkets."