Kitchen tool wars heat up as big brands weigh in - Kmart and Wal-Mart market lines of kitchen tools

DSN Retailing Today, Feb 5, 2001 by Mike Duff

The gadgets category may sound quaint, but as a key draw in the housewares segment, retailers have made it something of a battleground as they continue to offer new initiatives with the goal of segment domination. The home/housewares environment has become increasingly combative over the past couple of years, and that has become even truer in recent months as Kmart and Lechters have raised the pressure in the category.

Gadgets--mostly describing kitchen tools--were once simple, metal and inexpensive. Swing-A-Way, with its heavier construction and plastic grips, represented the step-up product for many mass-market operators, and that was the extent of things.

Today, however, consumers are increasingly design conscious and regard the kitchen as more of a gathering place and entertainment center in addition to a workstation. The shift in consumer perception has changed how retailers approach the category.

Probably the most conspicuous impact in the category over the past year came from the introduction of Martha Stewart Everyday housewares. The product line launched in early October with a significant gadget component. Kmart's chairman and ceo, Charles Conaway, said at the time of the launch that he expected the housewares line to eventually bring in $1 billion dollars, propelling Kmart from its present position as the No. 2 housewares retailer to the top. The MSE Kitchen program was in stores at the time of the announcement and rolled out on BlueLight.com the following week. All MSE Kitchen products were being offered on line almost as soon as they were released in the stores.

Prior to the official unveiling on Oct. 3, in the first 10 days MSE Kitchen was available in stores, the line did $1.43 million in sales, and that was before television and other advertising launched on Oct. 6. Martha Stewart products are set to comprise 40% to 70% of Kmart's housewares business going forward, depending on the category. Before the MSE launch, Kmart's housewares sales totaled about $700 million annually.

According to Kmart, the gadgets and other kitchen tools are performing well. They come in several lines with heat-resistant nylon cooking tools, opening at a $2.99 price point at the lower end, and corresponding rivet-handle tools continuing up to $5.99. Cutting tools and can openers start at $3.99 for a pizza cutter and proceed up to $7.99 for a heavy-duty can opener.

The key line in the gadget array is the ergonomically oriented Comfort Grip group, beginning at $3.99 for each of two spatulas and proceeding up to $8.99 for a can opener.

Each line was designed to have a distinct position within the overall MSE housewares assortment, said Steve Ryman, Kmart's vp and gmm for home, season, garden and Martha Stewart Everyday. "Gadgets are one of the categories that offer the best clarity of the offerings we've got," he said, adding that Kmart and Martha Stewart looked at developments in the marketplace and used them as a guide to establish MSE Kitchen. "We've been able to take elements like a comfort grip and produce at a better price point."

Kmart isn't necessarily eliminating other kitchen product lines as it pushes MSE. Labels like Oxo, Farberware and Ekco also remain available.

Wal-Mart, too, has consolidated its gadget offerings, but in another direction. Beginning with tests three years ago, Wal-Mart developed a program whereby all labels in its conventional--or non-electric--gadget lineup would appear in the same pegboard packaging with a single logo of a chef and sporting a unified color scheme. Yet, the company didn't abandon brands, displaying them prominently on the otherwise uniform packaging to give the category a cleaner, crisper look.

Wal-Mart has gone further with the program over the past year, eliminating a limited assortment of Oxo product it used to carry, a move Oxo staff confirms. However, it hasn't abandoned the customer who wants the kind of wide-handle, soft-feel design that is critical to Oxo products. Instead, at a supercenter in the Tampa area, Wal-Mart prominently offered Ekco products with "comfort grip" handles merchandised for ergonomic appeal. A large-sized Ekco pizza cutter was priced at $4.88. In contrast, basic generic pizza cutters were offered at $1.88.

However constituted, the Wal-Mart program is working, said spokeswoman Sharon Webber. "We're pleased with the category," she said. "In our experience, ergonomics are doing well as long as the products are reasonably priced."

Broadliners aren't alone in pursuing initiatives that have resulted in substantial modification to their kitchenware assortments. Indeed, in confronting a long decline in sales and market share, Lechter's is repositioning itself to take advantage of opportunities executives have identified in kitchen products--gadgets among them.

As the long process to reinvent the its business as a think kitchen, Lechters' president David Cully and his management team are determined to concentrate the retailer's resources on key businesses that focus on food preparation and serving needs.