Romance rekindles candle sales - includes related articles on candle colors and Kmart's candle merchandising

Discount Store News, Dec 5, 1994

Retailers looking for a category to bring in a new revenue source are seeing the light with candles.

"Candles are up in double-digit figures. Scented items, in particular, are doing very well," said Kathy Note, buyer for Stuarts, the Franklin, Mass.-based regional discounter.

Mimi Cooper, president of Cooper Marketing Group, a marketing consultancy in Oak Park, Ill., added: "It's an inexpensive way to update the look of your home and to feel good. You might not be able to afford new furniture, but you can treat yourself with a candle. Plus candles are a wonderful category because they burn down and you need more," she said.

Candle sales are growing at a 10% to 15% clip in the nation's discount stores, according to the National Candle Association. By offering a better assortment of candles, including updated colors, scented candles and candles accessories, discounters are grabbing a bigger share of the $1 billion category. Discounters control almost 40% of the business, according to the National Candle Association. Specialty operations garner about a 30% share, while department stores ring up 20% of the business.

Convenience is key to the mass market's success in the business.

"I prefer to buy candles in a candle store," said a customer shopping at Bradlees in Little Falls, N.J. "But I was here for bedding and other household items and happened to look at candles and bought two."

That's welcome news to discount store operators that are looking for new ways to pump greater sales out of existing space. For them, candles are a welcome addition.

The department produces attractive gross margins of 50% on average, and despite the number of colors needed to serve consumers' needs, the department turns on average six to eight times per year.

Value-oriented operators continue to expand their candle assortments.

In addition to traditional candles, discounters are adding votives, beeswax and scented stock-keeping units. To boost margins, many are adding accessories such as candle holders.

Suppliers recommend offering at least an 8-ft. department of basic candles and 4 ft. of home fragrances.

An overall market trend to home fragrances has had a positive impact on the candle business. Target Stores, for example, has an outpost of candles in the cosmetics department to tie into fragrances.

"Home fragrances is an area we are developing and adding footage. People seem to have an interest in aromatherapy and using candles for places other than dining room tables," said Bill Hoffert, senior vice president for Pharmhouse Stores.

"Scented candles have been great," confirmed Steve Hudson, buyer for Dollar General, which carries Candle-lite products. Vanilla scent, he said, is doing extremely well.

Based on the success of fragrance candles, Candle-lite, a Lancaster Colony Co. based in Cincinnati, has included several fragrance combination packs into its spring 1995 promotions.

"Vanilla has been strong in everything. Look at the success of Vanilla Fields perfume," said Jerry Vanden Eynden, vice president sales and marketing for Candle-lite, referring to Coty's blockbuster fragrance.

American Greetings also does extremely well with vanilla. Last Christmas, the company added pine and cinnamon scents, which produced incremental business, according to Ed Singler, product management representative.

Meanwhile, blueberry-scented candles are reportedly selling well at Stuarts.

There are different strategies regarding the candle department's location. "It seems to get the best exposure in party goods," said Vanden Eynden.

Bradlees merchandises candles in conjunction with cards. The selection includes Old Harbor and Candle-lite brands. Votives are priced at 59 cents each. There are tea lights priced six for $1.59. The mix also includes 8-in. federal candles priced at 89 cents, 10-in. tapers for 59 cents and 12-in. tapers for 79 cents. Cylinder candles that were 2.8 in. by 6 in. are priced at $3.99. Also available were smoke-free tobacco odor eliminator candles.

Jamesway carries American Greetings' Forget Me Not candles, sold near birthday candles. The array of candles includes votives for $1.09, eight tea lights for $3, 8-in. tapers for $1.20 and 10-in. fluted columns for $1.45.

Caldor uses housewares as the tie-in for candles. The chain's candle selection is on the far wall of the housewares area, near glasware.

As retailers diversify their candle assortments, expanding into new product areas, incremental sales will warm the category's bottom line.

COLOR'S the Thing

Atiny shade variation can make the difference between a successful candle and one that will gather dust on the shelf.

To ensure their colors are part of the right palette, candle manufacturers like Candle-lite tap the expertise of Mimi Cooper, a marketing consultant and head of the Cooper Marketing Group in Oak Park, Ill.

Cooper noted that unlike in many housewares categories where white and off-white dominate color choices, these hues represent less than 50% of candle sales.

Cooper stays on top of consumers' color preferences through a national poll that queries participants on shades they plan to use in their homes.