Leading Grocers Pull Out Stops in Housewares
By Christina Veiders
Traffic frequency, along with a spotlight on food and beverages, positions supermarkets as an effective channel to generate sales of housewares, especially kitchenware.
This was the focus of a business session, “Turning Food Shoppers into Housewares Buyers,” at the International Home + Housewares Show, which just wrapped earlier this month at Chicago’s McCormick Place.
Hosted by the Colorado Springs, Colo.-based Global Market Development Center (GMDC), the session featured panelists from Associated Foods Stores, Imperial Distributors, Valu Merchandisers and Bradshaw International.
“No other general merchandise category offers as much synergy with food products [as kitchen tools], and the opportunities for effective cross-merchandising are endless,” says Patrick Spear, GMDC president and CEO.
According to GMDC, the food channel captures most kitchen tool purchases, at 27 percent of the $7.2 billion market.
This isn’t the case when looking at total housewares sales. Of the $66.8 billion in manufacturer housewares shipments to direct-to-retail accounts, mass merchandisers/supercenters are the leaders, capturing a 14.9 percent share of manufacturer sales, according to the 2015 “State of the Industry” report from the Rosemont, Ill.-based International Housewares Association (IHA).
The food channel should remain viable for housewares, despite a greater share of sales shifting to nonstore retailers (catalogs/TV, direct to consumer via manufacturer websites, internet retailers) and retailers’ alternative online ordering and pickup services.
In the industry’s report, nonstore retailers represent 21.8 percent of housewares sales. IHA member companies report doubling the amount of sales to internet retailers over the previous year.
“The good news for brick-and-mortar retailers,” says Spear, “is that their stores are still overwhelmingly favored as the purchase source by [housewares] shoppers.”
Over six quarters, 81 percent of both bakeware and gadget buyers made their purchases in-store, while 77 percent of cookware purchasers did so, notes Spear.
“Nothing beats the immediacy of purchasing in a store,” says Dan Raftery, president of Raftery Resource Network, in Antioch, Ill. Raftery conducts the research for IHA’s annual report.
He adds, “The last time I checked, supermarkets are still the most-often visited retail outlet.”
While grocery trip frequency has slowed over the years, due partly to a fragmented marketplace where everyone now sells food, supermarkets still average high trip frequency: 1.5 trips per week of 203 million primary grocery shoppers.
This presents an important opportunity, say industry observers, since consumers of household goods like to see, touch and feel products.
Supermarkets can offer many impulse touchpoints throughout the store to merchandise products that make it easier to prepare, store and transport food and beverages.
“You’ve got ’em there [in aisle]. They are looking at avocados. So why wouldn’t they buy an avocado slicer? They are menu shopping, so why wouldn’t supermarkets want to help their customers prepare a meal with an offering of all the tools needed to prepare a meal?” asks Perry Reynolds, IHA’s VP global trade development.
Leading housewares grocery retailers Kroger, Safeway, Publix, Ahold USA and H-E-B — all listed in IHA’s report — appear to be doing just that.
Effective Clip Stripping
A recent trip to a New England Stop & Shop, an Ahold USA banner, revealed a robust clip-strip program in all departments.
Avocado slicers were next to the avocado bin, hung from a nearby plastic-bag dispenser in produce, where an array of other kitchen and prep gadgets were found appropriately cross-merchandised.
“Clip strips work,” asserts Jim Wisner, president of Wisner Marketing Group, in Libertyvillle, Ill. He warns, however, that all too often, merchandising and execution can be haphazard.
“You’ve got to be smart about it,” says Wisner. “It requires a good level of discipline to do it right and maintain. It needs supervisory review.”
The Stop & Shop store emphasizes its Smart Living private label line throughout its housewares offering. Amsterdam-based Ahold has set a goal of 40 percent penetration in its overall private label sales.
Garden City, N.Y.-based Lifetime Brands supplies Ahold with Smart Living kitchen tools, gadgets and cookware, as well as a variety of other housewares.
“Almost everyone has a private label [housewares] program,” notes Neil Stern, senior partner at McMillanDolittle, in Chicago.
San Antonio-based H-E-B sells private label Kitchen & Table, Texas Backyard and other exclusive lines, among them GTC and Chefstyle. Focusing on barbecue, the Texas chain places housewares and grill accessories near the meat department, Stern notes.
Cocinaware is H-E-B’s colorful, exclusive Mexican-inspired line that aims to appeal not only to Hispanics, but also mainstream Millennials, who are increasingly interested in ethnic cuisine.
“H-E-B created a whole line of products targeted to a reverse acculturation,” explains Wisner. “It is the non-Hispanic population embracing Latin food. That’s the bigger market. Cocinaware sets H-E-B apart from others, and the brand makes them stand out.”
Most supermarkets have dedicated in-line sections for kitchenware.
In the center store aisles of the New England Stop & Shop, 16 linear feet of mostly bakeware and small kitchen electrics are displayed, featuring such popular brands as Pyrex; Corningware; Corelle food storage, dishware and bakeware; Smart Living aluminum and ceramic bakeware; Reality four-piece glass sets; Stolzle stemware; and Hamilton Beach, Cuisinart and Proctor Silex small kitchen electrics.
Another 16-foot in-line section features Farberware kitchen tools and Smart Living nonstick aluminum pans and roasters.
’Tis the Season
Housewares also lends themselves to seasonal themes and merchandising.
Facing the Stop & Shop seasonal aisle were more housewares: a Color Splash display of Colourworks kitchen tools from Farberware, along with mugs and Corningware bakeware.
Colourworks was launched by Lifetime Brands last year to appeal to Millennials, who appreciate design aesthetics and products that allow them to express themselves.
The Stop & Shop display was changed from a Rubbermaid display of food storage and plastic water bottles seen on a visit the previous week, indicating that the store frequently refreshes its housewares.
“Customers come in so often [that] departments can get stale fast,” observes Stern. “That’s why cross-merchandising and seasonal promotionals become critical.”
Some grocery chains have gone beyond traditional housewares merchandising to include fullblown store-within-a-store sections.
“Supermarkets are increasing offerings that are like what our department store and specialty store customers are offering,” says Lifetime Brands CEO Jeffrey Siegel.
Lifetime has grown sales in almost all of the grocery store chains in which it’s offered, according to Siegel, who adds that the company expects its sales to increase 5 percent to 9 percent this year.
In supermarkets, “of-the-side counter offerings have increased, especially with bulk merchandising,” he notes.
Kitchen Place Concept
Cincinnati-based Kroger has leveraged its Fred Meyer one-stop supercenter chain, acquired in 1999, to merchandise a wide variety of cookware, kitchen implements and other home products in vast Kitchen Place sections within Marketplace stores. The emphasis is on quality and value.
Large end-aisle floor displays of popular kitchenware items — Crock-Pots and dishware — were seen at Marketplace store openings last fall.
“Kroger has a good gene pool with Fred Meyer and the heritage of Fry’s,” points out Wisner.
The grocer merchandises housewares as a core category, supporting it with percentage-off promotions, Catalina coupons and seasonal offerings, he notes.
According to Stern, Kroger also “focuses on opportunistic cross-merchandising on their ends — for example, placing coffeemakers near coffee.”
High-end cookware, kitchen utensils, and dish and glassware items are merchandised from a wire display area that surrounds the event center where cooking demos take place at Kroger’s debut Main & Vine fresh-focused store, which opened last month in Gig Harbor, Wash.
Cooking demos and classes are ideal events to sell high-margin housewares.
Stern mentions that Publix Super Markets Inc., based in Lakeland, Fla., has extended its Aprons line of catering, meal solutions and cooking classes to also position housewares.
IHA reports U.S. housewares sales rose 2.3 percent to $75.1 billion in 2014. The food channel captures 8 percent, or $5.3 billion, of the $66.8 billion in manufacturer products shipped to all 14 channels. Manufacturer sales to the five leading grocery chains were $3.6 billion in 2014.
“No other general merchandise category offers as much synergy with food products, and the opportunities for effective cross-merchandising are endless.”
—Patrick Spear, Global Market Development Center