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Fitness tapes are still tops among special-interest videos at supermarkets. Following fitness, sports tapes, including National Football League videos, wrestling, and hunting and fishing titles, were mentioned most frequently by the retailers polled by SN. Other key segments include stand-up comedy, music video, children's educational titles and how-to tapes on subjects like cooking."Health and fitness

Fitness tapes are still tops among special-interest videos at supermarkets. Following fitness, sports tapes, including National Football League videos, wrestling, and hunting and fishing titles, were mentioned most frequently by the retailers polled by SN. Other key segments include stand-up comedy, music video, children's educational titles and how-to tapes on subjects like cooking.

"Health and fitness are great items at this time of year as we are going into the Christmas holiday," said Sharon Stagner, merchandising coordinator at Seaway Food Town, Maumee, Ohio. "They also are strong right after the Christmas holiday." Because most special-interest titles are by definition not mass-market items, retailers are skeptical about their ability to make a significant bottom-line contribution to either sales or rentals. But such titles are still important for rounding out a department's selection and for building customer satisfaction. "Special-interest offers the supermarket a wider base of programs to attract, in theory, a wider number of potential customers, satisfying the interests of a larger number of customers," said Dick Kelly, president of Cambridge Associates, Stamford, Conn., a video industry consulting firm. "If the supermarkets limit themselves to pure entertainment, they are missing a piece of a billion-dollar market," he said. Cambridge Associates estimates that the value of special-interest at retail in 1994 -- sell-through and rental -- was about $950 million to $970 million, or roughly 6% of the total $15.5 billion video market, said Kelly. As a portion of the $5.5 billion sell-through market -- most special-interest revenues come from sell-through -- the category is about 17% of the total, he said. Kelly will present Cambridge's 1995 numbers at the annual convention of the Special Interest Video Association this week in New York.

But in supermarkets, high-profile celebrities and big promotional budgets help move tapes in the quantities needed to make the titles economically viable. That means the health and fitness/exercise segment is No. 1 by far, retailers said. Also, retailers define special-interest in much broader terms than analysts like Kelly, including comedy and music videos. Some stores even include classic movies under the special-interest umbrella. "It's fitness," said a video executive with a major Midwestern chain, who asked not to be identified. "We just look for high-volume items that are going to move numbers." The Boogaart Retail Division of Fleming Cos., Concordia, Kan., also is planning an end-of-year push on fitness tapes, said Matt Dillon, video director. "We bought some health and fitness for sell-through, and some of that is selling, although not too big. We are going to do some more in the fourth quarter as we get closer to Christmas," he said. Exercise is the top special-interest category for Thrifty Food Stores, Burlington, Wash., said Sandy French, video coordinator. "In this area, people are really into keeping fit and exercising," she said. "Exercise and cooking-related videos are naturals for supermarkets," said Bill Bryant, assistant vice president of major accounts and special markets at Ingram Entertainment, La Vergne, Tenn. "The chains that participate in cross-promoting those types of videos have been fairly successful," he said. For many retailers, the main season for selling fitness tapes is right after the first of the year. It's a time when people are looking for new indoor exercise activities and when there are few other top sell-through video titles to merchandise and promote. It's also when most suppliers introduce their hottest new titles. "There are a lot of good fitness videos coming out and I think those will pick up a little bit," said Denise Darnell, video supervisor at Southeast Foods, Monroe, La. "We do really well with fitness tapes after the first of the year. People gorge themselves during the holidays and are ready to do something about it afterward. That brings a lot of customers in," she said. "Certainly there is an opportunity for fitness videos after the first of the year, but the window is so small," said Clifford Feiock, video coordinator at Nash Finch Co., Minneapolis. "It seems like you have to have it in January and February to be able to take advantage of it, but after that it really seems to drop off for us," he said. Overall, special-interest videos do not do well for Nash Finch, Feiock noted. Market research by Alexander & Associates, New York, confirms the seasonality of the fitness category, said Arin Wolfson, general manager of VideoFlash Services. "We found that the purchases of exercise videos in the first 18 weeks of the year were above the average," he said. "Sales are strong throughout the first quarter." During the rest of the year, there are occasional spikes in exercise video sales, particularly in the fourth quarter, Wolfson noted. "But the whole summer period is definitely the slowest time, with sales volume below the average," he said. This is partly because of consumer demand, Wolfson said. People want to exercise indoors when the weather is cold. But it is also due to retailers who will only buy exercise videos for the first quarter. "Retailers are not convinced that this product will sell during the summer. Some of this is consumer-driven, but I'm sure much of it is due to retailer shelf space issues as well," he said. Overall, Alexander has identified a major decline in the sales of exercise videos. Unit volume decreased 32.2% from 1994 to 1995, Wolfson said. This comes at a time when the average price paid for a fitness tape also is dropping, from $17.93 in 1992 to $15.22 in 1995, he noted. Many retailers would like to carry more special-interest, but can't. "We would like to have it available for our rental customers. However, since they don't produce the revenues that the regular A and B movies do, you have to cut someplace," said Stagner of Seaway Food Town. "When push comes to shove, it is often hard to get the floor space when the retailers would rather dedicate it to the big feature sell-through titles," said a distribution executive, who asked not to be identified.

That's why fitness does best in the first quarter. "It is less crowded. There are not as many feature titles coming out after the holiday season," he said. It's difficult to do business with small special-interest companies "because they can't afford to do business with us and we can't afford to take the risk of supporting them anymore," said the video executive with a major Midwestern chain. For example, the retailer brought in a specialty video from a small supplier that didn't sell and now has a large credit with the company that it will probably never be able to use, the executive said. "I can't afford to handle the product. I lose money just in shipping it out, counting it when it comes back and paying for the shipping back to the distributor," said the executive. "I'm just looking to move numbers." Some retailers said the large number of different fitness videos coming out may have suppressed the market. "Part of the problem is there is so much available," said Feiock of Nash Finch. "Everybody has a fitness video out. There are just too many to give them the amount of space they deserve, especially when the window is so small to sell the product," he said. "My personal view is that there are so many fitness tapes out there, it is actually overwhelming," said Teri Severinsen, manager of video services at Roundy's, Pewaukee, Wis. "There are so many out there that it's hard to determine which product lines are superior." But Dan Black, buyer at Raley's, West Sacramento, Calif., said it's the large number of fitness titles that makes them the top special-interest segment. "Everybody and his uncle has an exercise tape," he noted. No matter how many different fitness titles are on the market, the top ones featuring the biggest celebrities will sell, said Kelly of Cambridge Associates. "If you've got something that has sex appeal -- the latest heartthrob doing exercise -- that stuff is very attractive to a group of people who like to exercise with video," he said. The top category at Southeast Foods is sports videos, particularly wrestling and a fighting line from Vidmark Entertainment, Santa Monica, Calif., called the "Ultimate Fighting Championship," said Darnell. "It's like wrestling, but it is real. There are no rules and no holds barred. It's real violent," she said. These tapes are like a live-action version of video games such as "Mortal Kombat" and "Primal Rage," Darnell said. "People are really into beat 'em up and make 'em bleed," she said. Wrestling tapes are doing well in the video rental sections of Bel Air Markets, Sacramento, Calif., said Rick Ang, director of video operations. "That caught me by surprise. Certain types of people may go to certain types of video stores, but everybody has to go to the grocery store. So we get the wrestling fans along with the culture fans," he said. Sports blooper tapes also do well as rentals, Ang noted. Sports tapes like the NFL line from PolyGram Video, New York, do well in supermarkets in specific markets, said Bryant of Ingram. "Where there is a home-town NFL team, there is more demand for those types of tapes," he said. But Nash Finch's stores are spread out over a wide geographical area, making it difficult to mount a promotional campaign on behalf of NFL team videos, Feiock said. "We usually make them available to our stores and then let them make a decision as to what they need," he said. A subcategory of sports that does well for some retailers is hunting and fishing videos. "Sports are really big in this area, especially hunting and fishing," said French of Thrifty Food Stores. "We are far enough away from Seattle that there is a lot of hunting and fishing in this area."

For example, in late September, "the Skagit River was going crazy with fishermen," she said. Dillon at Boogaart is considering bringing in hunting and fishing tapes. "In this area, people are active in outdoors activities like that," he said. Videos of stand-up comics, especially those with their own shows on television, are starting to move for rental. "We are getting more requests from people looking for the stand-up comedians because their popularity has increased. Many, like Brett Butler and Tim Allen, have gone from stand-up to television sitcoms," said Ang of Bel Air. "A lot of it depends on who the comedian is. If it is somebody really big, I will probably bring it in because they do fairly well," said French of Thrifty. Jeff Foxworthy is very popular with Southeast Foods' customers, as is Martin Lawrence. "Stand-up comedy is getting real popular," said Darnell. Music videos of new recording artists also are getting more interest lately, she said. Ang said music videos of older performers like the Rolling Stones and the Eagles rent best in that segment for Bel Air. One title that could do well for Roundy's is a concert video by Hootie and the Blowfish, said Severinsen. "That will probably be really hot because the group is the hottest thing around right now," she said. Roundy's will sell this tape, she said. "When you look at the age group and the product line, it is the perfect impulse item," Severinsen said. Retailers disagreed on whether special-interest titles in general do better as rental or sell-through items. Fitness tapes in particular do better for sell-through at Nash Finch, Feiock said. "They do OK as rental items, but people just want to buy them and take them home to try without worrying about bringing them back," he said. Special-interest tapes at low price points will sell for Boogaart, Dillon said. "We are in a lot of rural markets and many of our customers drive 25 to 30 miles to get to our stores. So if a video is priced at $9, they will buy it rather than pay $3 to rent it and then have to bring it back," he said. For Thrifty Food Stores, special-interest does best at rental, French said. Especially on a how-to tape, "the customers don't want to have it forever. They just want to learn from it," she said. "We don't really stock a lot of special-interest for sell-through," said Darnell of Southeast Foods. "We do a lot of special orders on those types of things."