About 50 K marts to offer bulk-pack stationery by 1989

Discount Store News, May 23, 1988

About 50 K marts to Offer Bulk-Pack Stationery by 1989

TROY, MICH. - K mart is taking another step to snare stationery sales from small business owners.

In addition to working on warehouse stores to be called Office Square, (see DSN, March 28) K mart is going to offer bulk-pack stationery in all new and refurbished full-size discount stores.

By doing so, K mart hopes to pick up extra office stationery trade from small businessmen and professionals who are shopping the stores anyway for personal needs, said John Sommerville, senior stationery buyer.

The bulk-pack program, using the Matrix line from Mead Products, Toledo, Ohio, began two months ago in two K marts in Greensboro, N.C., and another in Tolleson, Ariz., near Phoenix.

Reorders from all three during the first 45 days of the test were high enough to persuade K mart to begin installing a 28-foot aisle table display of Mead bulk-pack stationery in all new stores and all existing full-size stores as they are refurbished. Sommerville said he expects to have the bulk-pack stationery program operating in 50 to 60 stores by the end of the year.

K mart cherry-picked Mead's line, called Matrix, of about 80 stationery products in such bulk packs as 500 business size envelops, 100 file folders and clasp envelops, a dozen legal pads, reams (500 sheets) of bond stationery, and a 250-page sheet of computer printout paper.

With the major exception of legal pads, K mart doesn't carry many of the products in its usual stationery offerings, so all sales represent additional business, Sommerville said.

K mart expects even legal pad business to increase, with turns projected at six to eight by the dozen, compared to five or six by the piece, Sommerville said. Because margins on bulk-pack products are so low--and prices are highly promotional--quick turns are essential for profitability. "If you don't get the turns, you can't hardly afford to be in the business," Sommerville cautioned.

The market K mart is targeting includes small contractors, hometown insurance agents, doctors, dentists and the like. Mead estimates that such businessmen and professionals operate 16 million home offices, but has no projection on dollar volume for the home office market.

Mead offers a planogram of 8-foot and 12-foot shelf displays, but K mart has developed its own 28-foot table display for its use, Sommerville said. K mart declined to release its planogram.

Other popular products in Mead's Matrix line include: copier paper, index cards, steno notebooks, message pads, typing paper, calculator tape paper and computer printer paper.

Freight Costs Considered

Because of freight costs, the Matrix bulk-packs exclude case lots of such items as computer or copier paper, said Dick Mugge, Matrix vice president for marketing.

Matrix is designed to fill the niche between singles and business multiples for large offices, Mugge said.

Ames, Rocky Hill, Conn., had the Matrix program, Mugge said, and Gold Circle, Columbus, Ohio, and Target, Minneapolis, also are testing it.

The Matrix line has been popular with warehouse clubs for two years, he said.

The boom in discount stores for home office electronic equipment, such as fax machines, copiers, cellular telephones, beepers, and computer printers, is drawing additional business for home office paper consumables, Mugge said.

K mart's new strategy is geared toward capitalizing on this potential for additional walk-in trade, Mugge said. An example of the potential: $5 billion by 1990 for personal computer paper and paper related products, Mugge said.