Furniture finds a home at the top, but food stays close - top ten categories with sales gains at discount stores - DSN Productivity Report

Discount Store News, August 5, 1996

It was deja vu all over again, only more so, at discount stores in 1995.

Furniture, food, lawn & garden and consumer electronics, which paced discounters' growth in 1994, were again at the top of the heap, with even stronger year-to-year growth.

  1996 Top Ten Gainers(1)

Household cleaners had another strong year, probably stimulated by the continued shift to warehouse-style packs. Wholesale clubs trained consumers to treat products like laundry detergent, toilet paper and paper towels as stock-up products, selling 50-roll packs of toilet paper, for instance.

Discounters have adopted that strategy, but offer less cumbersome packs of 12 or 20. They have also become very aggressive in promoting the category, both in circulars and on endcaps in-store. Target in particular seems to have isolated this category as a major traffic builder, sometimes offering an entire page full of specials in its weekly circular and almost always featuring one or two products on endcaps in its main traffic aisle. Also, despite brand-pruning by major vendors, discounters seem to have actually increased their assortments in this category. The sales results indicate that consumers now look at discounters as their primary stock-up source.

Stationery has been boosted by a wave of hot licenses and in the Back-to-School area, by school supplies with a healthy does of play value. Greeting cards have been a major growth area for several years, contributing strong margins that in many chains, notably Target, have earned the category prime retail space at the front of the store. Target has recently debuted a second Create-a-Card kiosk in its toys department.

The presence of the final three gainers--hardware, automotives and cosmetics--is more than slightly surprising. The first two have been in decline at discount stores for years. However, discounters seem to have made adjustments. All of the Big Three now have private label strategies in auto and hardware.

And cosmetics showed a 15% rise in sales on the strength of new longer-lasting eye, lip and face cosmetics, with retail prices at least double those of older products.