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    GROCERY: No time for recess

    Grocers should bone up on what's hot for back-to-school, to exploit key food and nonfoods business during the season's window of opportunity.

    By Don Longo, Convenience Store News

    Back-to-school is still grocers' territory. In some of the leading categories that comprise the segment -- including a variety of food products, as well as containers for those products, such as paper lunch bags, and school supplies like notebooks and pencils -- grocery stores outperform drug stores and mass retailers (excluding Wal-Mart) in sales of the stuff to meet students' back-to-school needs.

    of the stuff to meet students' back-to-school needs.

    According to ACNielsen statistics, the grocery channel commands 90 percent or more of sales in the categories of breakfast bars, snacks, and crackers, and achieves strong market shares in food storage containers (64 percent) and paper lunch bags (83 percent), as well.

    However, in many other nonfoods back-to-school categories, grocery retailers capture only between 15 percent and 30 percent of total sales. To take advantage of the opportunity to build back-to-school sales in nonfoods, some supermarket retailers are cross-merchandising products like pens, pencils, markers, and folders with popular back-to-school food products such as breakfast bars and snack packs.

    In fact, many grocers see expanded offerings of school and home office items as a perfect fit and an added convenience for their shoppers. Progressive Grocer has previously reported, for example, that Staples-branded store-within-a-store sections are scheduled to open next month in all 550 Stop & Shop supermarkets and Giant Food stores in the Northeast. These 40-foot to 80-foot sections will contain 500 to 1,200 school and home office items. Staples sections are also being tested in select Kroger stores in Las Vegas and Salt Lake City. A year ago Albertsons began selling office supplies from Staples rival Office Depot in its stores.

    Timing is everything. An analysis of 37 key back-to-school product categories sold at food stores (excluding supercenters) with $2 million or more in annual volume shows that sales for these products are heaviest starting around the middle of July, peaking the third week of August and tapering off in late September (see the chart on page 62). Based on 2004 sales in the combined grocery (excluding supercenters) channel, we've indexed against the average weekly sales the leading categories for back-to-school over a 10-week period.

    The category that indexed the highest during the 2004 back-to-school season was personal planners, binders, and folders, selling at a rate of more than two and a half times its normal weekly sales of $678,579, during the week of Aug. 21, 2004. Grocery retailers started to see a rise in sales for planners, binders, and folders in late July, and the category performed strongly through the week ending Sept. 18, 2004.

    Other school supply categories performed similarly. Colored pencil sales were up 29 percent over the category's normal weekly average for the week ended July 24, 2004; peaked the week ended Aug. 21, 2004 (three times the weekly average); and were still performing 45 percent above average for the week ended Sept. 18, 2004.

    When freezers are hot

    Products associated with the back-to-college market also had specific sales patterns. Refrigerator and freezer sales tracked at an average of only $82,871 per week during 2004. For most of the year, refrigerator and freezer sales at food stores track significantly below that average. However, for the last two weeks of August -- when college students pack up and head off to campus -- refrigerator and freezer sales indexed at 178 and 169, respectively, indicating a small window for grocers to capitalize on sales of this product.

    Other nonfoods categories that performed well above average for the back-to-school season last year were hand cleaners and sanitizers, storage and space management systems, and sandwich bags.

    Many food products associated with back-to-school, such as variety snack packs, peanut butter, jelly, and canned meats, also had specific sales patterns. Average sales for variety snack packs averaged $3.9 million per week over the entire year. But from the period of Aug. 14 to Sept. 18, 2004, snack pack sales ranged from 19 percent to 41 percent above normal per week. Among the food categories, canned Vienna sausage registered some of the biggest spikes in sales activity in the 10 weeks around the opening of school. The category's sales were 23 percent above average during the week ended Aug. 21, 2004 and climbed to 57 percent above average the week of Sept. 18, 2004.

    The increased demand for healthy foods is likely to drive sales of more fresh fruits and vegetables, low-fat breakfast bars, reduced-calorie packaged pudding, and canned or single-serve fruits and juice boxes during the 2005 back-to-school selling season, say nutritionists and suppliers. And many suppliers have made kids a focus of their marketing efforts.

    At the FMI Show Mike Salzberg, s.v.p., U.S. sales for the Campbell Soup Co. in Camden, N.J., told Progressive Grocer that soups for kids are marked prominently in the supplier's new IQ Maximizer shelving set that also clearly identifies other popular groupings of soups, such as "wellness" products.

    The show also featured numerous products from suppliers with licensing tie-ins for kids of all ages: SpongeBob SquarePants, Dora the Explorer, and Bob the Builder for the elementary school set, to superheroes like Spiderman and Batman for a slightly older crowd. Also, suppliers, including Masterfoods USA and the Kellogg Co., were tying into the apparent co-promotional opportunities related to the newest "Star Wars" movie.

    By Don Longo, Convenience Store News
    • About Don Longo Don Longo is editorial director of EnsembleIQ's Convenience Store News. He has covered retailing for more than 30 years as a reporter, editor and publisher. Previously, he spearheaded the editorial efforts at a variety of business publications focused on mass, drug, grocery and specialty store retailing. Convenience Store News won American Business Media‚Äôs Jesse H. Neal Award for Best Issue of the Year in 2008 and 2012. Longo has won numerous other editorial awards over his career and is frequently quoted in the national and local news media on the subjects of retailing and consumer trends.

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