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WINNING THE CHOCOLATE WAR

There's nothing like a massive display of chocolate bars to help drive Halloween candy sales.Large displays for Halloween and many other seasons -- supported with newspaper and circular advertisements, and coupled with hot prices -- can actually draw shoppers into a store and help win back sales that have been lost to other retail channels.Chocolate sales are also being helped by the expansion of

There's nothing like a massive display of chocolate bars to help drive Halloween candy sales.

Large displays for Halloween and many other seasons -- supported with newspaper and circular advertisements, and coupled with hot prices -- can actually draw shoppers into a store and help win back sales that have been lost to other retail channels.

Chocolate sales are also being helped by the expansion of the major manufacturers into more holiday periods. It is now common to find products from Hershey, Nestle and M&M/Mars not only decked out for Halloween and Easter, but also for Thanksgiving, Christmas and Valentine's Day.

And the earlier the displays are put up, the better, retailers said. Early displays of candy signal to the shoppers that the product is fresh, spurring initial sales and replenishment visits as the holidays get closer.

"To win back sales from the mass merchandisers, supermarkets need to display," stressed Cheryl Robertson, regional communications manager for Supervalu's Pittsburgh division, New Stanton, Pa.

Ads coupled with displays are the best ways to drive seasonal chocolate volume, Robertson said.

Big Y Foods, Springfield, Mass., puts up massive displays featuring chocolate items such as M&Ms, Mars bars and Snicker's about nine weeks before a holiday, said Tom Yarrows, category manager.

"With these displays up for a period of seven to nine weeks, consumers tend to purchase them in advance and come back about three weeks before the holiday to replenish," he said, adding that Big Y uses massive displays placed in the perimeter areas of the store.

"Early displays of seasonal candy with creative point-of-sale material will help with repeat purchases. The holiday displays need to be built early to counter the mass merchandisers," said Mike Shultz, senior vice president at Hughes Family Markets, Irwindale, Calif.

Secondary locations, along with cross merchandising in various departments, increase volume and create impulse sales, he added.

"I bring the seasonal chocolates in early and do one promotion on them," said the candy buyer for one leading Midwestern wholesaler, who did not wish to be identified.

"It's important to have them on an off-shelf display, but they shouldn't be included in the gondola set."

The buyer said it becomes a fine line trying to determine how much of the seasonal chocolates to buy, so that there is not a shortage, or an aisle full of seasonal product that must be marked down after the holiday.

"It's important to have the product through the season. It is very important that if the customer comes in even the day before the holiday, they are able to buy it, and you don't have to reduce the retail that much," the buyer said.

Shultz noted that tie-ins with other holiday-related items seem to have a positive impact on the season. For example, a Halloween house party will have various sponsors with a good mix of products, Shultz said.

Tim Humanik, category manager at Harris Teeter, Charlotte, N.C., said his chain finds the best way to promote seasonal chocolates is with massive lobby and other off-shelf displays that cross merchandise candy in other areas of the store.

"To stem the loss of chocolate sales to mass merchandisers, supermarkets can get the product on the shelves and in the eyes of the customers early. Grocers can also offer good variety," he said.

He added that attractively packaged seasonal items can generate trial and exposure of the category to new customers, who might then buy similar products in their traditional wrappings after the holiday.

Steve Heggelke, director of merchandising at Bozzuto's, the Cheshire, Conn.-based wholesaler, said the most effective means of merchandising chocolate products is through off-shelf and cross-merchandising programs in high-traffic areas of the store.

"Chocolate sales are driven by creative merchandising, location, tie-ins and seasonal themes. In-line programs can be marginally effective with the use of creative signage," he said.

To help win back sales lost to other classes of trade in recent years, Heggelke said supermarket operators need to devote more space to chocolate and promote them with more aggressive retails.

In addition to store-created displays, Roger Burks, senior vice president of retail operations for The Mad Butcher, Pine Bluff, Ark., said shippers from Hershey and M&M/Mars have also been effective at driving up sales.

"The manufacturers have created shippers for the bagged line and they have also done the single-bar items. It has really helped on both sides," Burks said, adding that multibar deals, such as three for 99 cents, are especially effective at stimulating sales of the individual bar items.

"Chocolate is more or less an impulse item," he said. "The big display along with the price helps to drive volume. When bars are priced three for 99 cents, it is a good price. When they are looking at bag candy normally $2.89, and they see it out there at two for $5 that is a nice incentive."

A hot price point helps to make the seasonal chocolates an even more irresistible item to toss in the cart, retailers said.

"Ad features can be effective if they have a really sharp price point and have a good cross-promotional tie-in," said Humanik of Harris Teeter.

"Our chocolate sales are holding steady, and have been enhanced by ads with aggressive price points that are effective at driving customers into the stores," said Robertson of Supervalu.

"In-store couponing events with other departments seem to create some excitement with specific brands," said Shultz of Hughes Markets.

While chocolate candies continue to be the market leaders in holiday-oriented and seasonal products, several retailers said they are beginning to lose some sales and market share to nonchocolate products, like gummy bears and hard candy.

"Recently, we have seen a slight decline in chocolate sales because of their fat content," said Yarrows of Big Y.

"Chocolate products are more the holiday favorites, but on an everyday basis, the market share is growing in the low-fat and fat-free products," said Shultz of Hughes Markets.

"Depending on demographics, consumers are turning to a more healthy lifestyle," said Heggelke of Bozzuto's. "Growth in the chocolate industry will be contingent on promoting it as a healthy alternative by developing more low-calorie and low-fat items."

Shultz noted chocolate is usually inflation resistant.

"Some items are not price sensitive and chocolate is one of them. Candy is usually an impulse item, so the cost tends not to be an issue," he said.