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Supermarkets Targeting Bigger Holiday Spend

After years of watching general goods/big-box merchandisers like Target and Walmart encroaching on their business with ever expanding grocery offerings, it seems the supermarket is striking back this holiday season.

Well regionally anyway, as smaller chains like Hy-Vee, Bag ‘N Save, Baker’s and Super Saver have decided that if general merchants can sell groceries – well then the grocery store can sell general merchandise. 

The Omaha World-Herald reports that retail experts say the move might actually be the smart move to recapture some of those Walmart defectors who prefer the one-stop shopping opportunity it offers. 

“We’re not going to be able to sell customers everything on their holiday list, but we can try and make their holiday shopping a little easier,” said Brandon Lampkin, vice president of general merchandise at Hy-Vee, the West Des Moines-based grocery retailer.

To make those lives easier (and their bottom line just a little fuller this holiday season), Hy-Vee is stocking things like bedding, crockpots, Barbie dolls, Hot Wheels sets, Melissa & Doug wooden toys and a 30-inch electric smoker. They are also — for the first time this year — experimenting with different incentive packages for consumers, including promotional $10 and $20 gift cards with some purchases. For example, a $90 Keurig coffeemaker, comes with a “free $20 Hy-Vee gift card.”

And unlike many gift cards, a grocery one is almost always useful and utilized — as the average American visits a grocery store 1.5 times per week — and all the foot traffic is high value in a world where foot traffic is falling.

“Food stores can be good places to merchandise items that aren’t food,” said Jon Springer, retail editor at Supermarket News. “People visit them frequently and they’re not hard to get to.”

“Each year we continue to increase our variety and try to provide what is popular,” said Marty Jarvis, director of marketing at Lincoln-based B&R Stores Inc., which includes Super Saver, Russ’s Market and Save Best stores. This year Super Saver’s offerings include winter hats and gloves, battery-operated helicopters, headphones and small appliances.

The competition for grocery dollars matters greatly, and getting those customers back is big money. About 60 percent of Walmart’s annual revenue is derived from grocery sales and Target derives 40 percent or more, said David Livingston, owner of DJL, a Milwaukee-based supermarket location research firm.

That doesn’t mean grocery stores are about to morph into the general stores of the days of old, Livingston notes, but he does think the line will continue to blur.

“I think they are experimenting,” he said. “Everybody wants to be a one-stop shop.”

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