Wal-Mart, Kmart stir up paint

Discount Store News, Nov 3, 1997 by Richard Halverson

When it comes

to paint by

the gallon

among discounters, the

conversation moves mainly

to Wal-Mart and Kmart

since regional players

carry only small presentations

in basic colors and

Target dropped gallon

paint altogether several

years ago.

And both Wal-Mart

out with major new

programs this year:

* Kmart introduced in

May its Martha Stewart

line of designer paint to

coordinate with Martha

Stewart bed and bath

fashions;

* Wal-Mart introduced

last month its new

supercenter prototype for

hardware and paint,

Hardware 2000, that features

a bullpen for paint

facing a separate bullpen

for power tools, 4-ft.-high

warehouse racking, 6-ft.-wide

aisles, up from 4 ft.,

and a register for checking

out paint and tool

sales on the spot.

Both developments

come in a slow-growth

category that basically

tracks the development

of new household formations,

or about 1% to 2%

per year in gallons and

5% in retail dollars.

Hampering growth is the

aging of America, with

older home owners tending

to stay put and buying

fewer new homes.

Wal-Mart and Kmart

are fighting for a piece of

the architectural coatings

retail market of $11

billion to $11.5 billion in

1996, which includes

paint for commercial

and office buildings.

Consumers bought about

45%, or $4.45 billion

worth last year.

Between Wal-Mart,

Kmart and Sears, mass market

chains account for about $1.5

billion in annual paint sales, for

a 13.5% market share. In

comparison, home centers control $3

billion in paint sales, or about a

27% share.

Wal-Mart's new paint

program, Hardware 2000,

for supercenters,

was unveiled on Oct. 6

during the grand opening of the

new prototype in Fayetteville,

Ark. It was then that visitors got

a first look at the twin facing

bullpens and the checkout register

at the exit of the tools that

was designed to service both

areas, said Doug Timmons,

paint department manager.

The paint bullpen measures 24

ft. long by 8 ft. wide and is made

of 4-ft.-high warehouse shelving,

Timmons said. Pre-mixed paint is

on the outside, while the paint

mixing station is inside.

Wal-Mart has beefed up its

paint-mixing equipment so it

now can mix and shake four,

1-gallon cans at a time or a single

5-gallon pail. "Before it was just

one gallon at a time," he said.

The supercenter handles 5-gallon

pails of any of its exterior or

interior paint--all of which is

now private label, Timmons said.

At least in the new supercenter

prototype, Wal-Mart carries only

its Color Place and House Beautiful

private labels, dropping Glidden.

Wal-Mart discount stores

however, continue to carry the

Glidden Spread Satin line.

Going forward, Wal-Mart

supercenters probably will carry

only private label paint,

Timmons speculated.

While it hasn't increases

square footage by a large

amount, the 6-ft.-wide aisles,

up from 4 ft., provide more

room for customers. At the

same time, the warehouse

racking provides 20% more

storage space on the selling

floor for paint.

The layout also includes

two 4-ft. by 4-ft. floor stackouts,

Timmons said. In the

spring, one stackout will be of

paint and the other used for

paint-related sundries.

In a chainwide development

Wal-Mart also introduced an

extensive line of Popular

Mechanics-licensed private

label paint sundries, such as

brushes, paint pads and

rollers. It also markets a limited

line of Color Place accessories,

such as a three-pack of

roller covers for $3 and a three-piece

paint kit with tray, roller

and roller cover for $2.47.

Wal-Mart has introduced

the new look in paint to three

supercenters, Timmons said.

The United Coatings

subsidiary of Sherwin-Williams

produces the Wal-Mart Color

Place line, while Valspar

makes the House Beautiful

program, licensed from the

magazine of the same name.

Sherwin-Williams also

produces the Martha Stewart

line of designer paints for

Kmart, as well as its Dutch

Boy branded product.

But Kmart is growing the

Martha Stewart brand and

leaves the Sherwin-Williams

name off of the can, said Steve

Ryman, divisional vice president

of home fashions and

director of Martha Stewart.

Kmart is promoting cross-shopping

between Martha

Stewart soft home and paint

by promoting coordinating

paint colors on bed sheets and

comforters, Ryman said.

The packaging identifies the

Martha Stewart paint colors

that appear on walls on the

bedding package photographs.

For example, a sheet with

black pin stripes would note

that walls are painted Coir (a

straw-color) with milk-white

trim. A comforter might note

that coordinating colors are

iron-stone white for walls,

with a squash blossom trim.

With the retailer's Sunday

circulars that advertise paint,

Kmart puts Martha Stewart

paint and home fashions on

the same page, Ryman said.

All Kmart stores now have

a Martha Stewart special

order catalog that includes a

section for coordinating paint

colors for all Martha Stewart

domestics, including blankets,

sheets, comforters and

curtains. The effort appears

to be paying off.

Ryan "guesstimates" that

at least 15% of Martha

Stewart customers are

cross-shopping for paint--and

possibly as many as 25%.

Kmart can custom mix 256

Martha Stewart colors. The

Martha Stewart line includes

a dozen pre-mixed colors,

which occupies about half of

the shelf space in paint.

Kmart has included space