Trading up sprinkles profits in hoses - Category Update - garden hose sales in discount stores - includes related article on manufacturer merchandising aids

Discount Store News, Sept 19, 1994

Consumers may once have thought a hose is a hose is a hose, but clearly that is no longer the case.

The category, which at the wholesale level generates more than $150 million annually, is undergoing dramatic changes as consumers learn to distinguish between the various products currently on the market. And as Americans heavily invest in their dwellings they are opting for top quality.

That obviously has had an impact on hose sales. Chains such as Kmart, Sears, Target, Wal-Mart and Lowe's home centers are extending hose selections and merchandising hoses in "good," "better," "best" presentations along with collateral material that provides store customers with product analyses. The results have paid off in volume. While hose sales are up only 2% to 3% in units in the past year, according to retailers and manufacturers, sales dollars have doubled.

"When merchandised right, shoppers trade up to better quality in these categories," said Kmart chairman/ceo Joe Antonini during a recent tour of his Auburn Hills, Mich., location.

Adds Bob Misevich, non-power lawn buyer for Sears, "We offer information on our hoses so shoppers know what they are getting. It often results in customers trading up."

There has also been a shift in consumer buying patterns in terms of outlet. Although garden and hardware stores are still the number one sites for hose purchases, discounters have been coming on strong and rank third with a 20% share of the business, according to manufacturer estimates.

While some chains have de-emphasized overall lawn and garden, often conceding the business to Wal-Mart and Kmart, they are not relinquishing lawn maintenance. According to a spokesman for ShopKo, the firm is concentrating on higher-end hoses. At Rose's, there is an effort to pull in more lawn and garden customers by opening an hour earlier on Saturdays, according to Barry Gouge, vice president and general merchandise manager, hard lines. "Gardening just seems to be on the rise. We've had an exceptional year," he says.

Caldor is focusing on basics to spur impulse sales, says Tom Vellios, senior vice president of home lines.

Home centers are also trying to maximize the productivity of the category. Many are consolidating vendors in hoses to avoid duplication. "We're going with one leading vendor, Anchor Swan," says a source with Lowe's Cos. Inc. "We're also promoting hoses in cross merchandising locations as project sell opportunities."

Rickel promotes a variety of hoses, including a 5/80-in. by 60 ft. super special garden hose for $7.97, a 5/8-in. by 80 ft. flexon V4 garden hose for $9.97 and 5/8-in. by 75 ft. flexon free flow hose for $14.97.

"I couldn't believe my husband told me I bought the wrong hose," jokes Laurie Shimuzu, an Edina, Minn., resident. "He sent me back to get a rubber hose."

Freeman isn't alone in her confusion. There are varying grades of hoses that confuse even retailers (see product guide). But manufacturers such as Anchor Swan, Apex and Colorite are working to include more information on packaging to make purchasing the right hose easier.

Displays at the retail level also aim to educate and segment the market. Wal-Mart, which markets hoses under its Better Homes and Garden private label, places hoses on endcaps during the key seasons. The traditional set includes vinyl hoses, rubber/vinyl combinations, and hoses with brass couplings and specialty rubber models.

Target piles its hoses in towering stacks of vinyl and rubber. The brand stocked is Anchor Swan under different names to differentiate the level of the hose. Fairlawn, for example, is the "good" version of the product priced at an entry level of $12.99 for a 75-ft. hose.

The top of the line is Soft & Supple, a premium rubber/vinyl reinforced garden hose priced at $17.99 for a 50-ft. length.

One hundred feet of 5/8-in. diameter "best" hose is priced at Target's top price of $28.99.

Other choices at Target include a 50-ft.- sprinkler soaker for $6.99 or the Earth Quenches drip irrigation 50-ft. hose at $9.99. Specialty hoses include hoses for marine use, campers, patios and pools.

Sears' department, adjacent to automotive and other seasonal merchandise, is composed of five five-shelf gondolas that hold 73 stock keeping units. The merchandise includes good all vinyl hoses, better rubber/vinyl and best rubber hoses that are supple and hold up well.

Retailers are not only using in-store merchandising techniques to maximize hose sales, they have also extended the selling season. In the southern parts of the country, many retailers now carry hoses from January through August. With people staying at home more and with specialty hoses for specific uses, retailers have been able to generate strong day-in and day-out business--not only during promotional sales.

With the business shifting from hardware stores to the mass market, there has also been incremental growth. More women, buyers note, are purchasing hoses while on the weekly trip to the discount store. And with task-oriented products such as soaker hoses for landscaped areas or hoses for pools, people are buying more than one hose.