Discounters make room for storage, despite higher prices - plastic storage units - includes related article

Discount Store News, Feb 20, 1995 by Teresa Andreoli

CHICAGO - Rising resin prices will inject a bit of drama in the home storage category this year.

This isn't entirely bad news, however.

While shortages may dot the landscape and higher retail tickets may slow sales volume, discounters can use the situation to get creative with their merchandise programs and product assortments.

"Resin price will be the one thing holding back business this year," said a buyer from a Northeastern chain. "However," he said, "most discounters haven't picked up on key items in fabrications and colors."

Niche marketing such as gift storage, crafts and juvenile can be used to distract shoppers struck with sticker shock.

This discounter, who asked not to be identified, said he will double the size of his storage department this year from 4 ft. to 8 ft. to tap the opportunities in the business. He does, however, anticipate a price increase from suppliers during 1995 that will be passed along to consumers.

Storage has been an exploding category within the housewares department for years, changing to keep pace with fashion trends in styles, colors and materials.

As a result, expenditures per household have risen dramatically. According to the National Housewares Manufacturers Association, sales of closet and storage products rose to $11.86 per household in 1992, the most recent figure available. This compares with $6.32 per household in 1991, $5.72 in 1990 and $5.06 in 1989.

Each year, the challenges of the marketplace dictated various courses of action by both supplier and retailer. This year will be the same.

At the recent Housewares Show in Chicago, manufacturers offered numerous new storage products that pushed the fashion message, even with the looming resin price hikes. Some of the items even offered substitutes to resin features.

Rubbermaid offered boxes for off-season apparel with a small, built-in compartment in the lid for potpourri, cedar chips or other must-fighting fragrances.

The Wooster, Ohio-based supplier also debuted a new Rough Tote line with raised lids and wider bases for expanded outdoor storage, and for the kitchen, Rubbermaid unveiled Slide 'n Stack organizers for under the sink and lower cabinet areas of the home.

Separately, amid rumors from retailers that Rubbermaid might be slashing 60% of its skus, the resin-product maker responded that the cuts it will make are for line freshness reasons.

"Although we have eliminated many skus, this is not an unusual process, as we are continually reinventing our lines and refreshing the categories," said Benjamin Anderson-Ray, vp, marketing and business development, Rubbermaid. "We are intent upon driving new products into our business as proven by the fact that 33% of our sales come from products less than five years old."

Other news-making items included a collapsible crate from Spectrum that impressed one buyer from a regional Northeastern chain. "Not a brand new blockbuster item," said the buyer, "but unlike the normal crate that takes up an unwarranted 40 ft. to 60 ft. during Back-to-School, this is an attractive retail item that doesn't take up half the store and we can make a little extra money on it."

Glass storage skus from Elements, a division of Boston-based International Silver, caught the eye of another housewares buyer from the Northeast. Elements' open stock includes spice jars, juice pitchers and an assortment of hermetically sealed storage pieces in the under-$5 suggested price range. The eight-sku giftware box sets are available in cobalt, teal, amethyst and clear colors, with a suggested price range of $7.99 to $14.99

Although the weight and delicacy of glass storage prevents it from replacing plastic on a large scale, it will take a bit of the spotlight from resin on some discounters' shelves. Elements said storage accounts for a growing 20% to 30% of its business. "The category has become hot because people are more interested in home organization and spending more money on the home - from kitchens to closets," said Carol Dipietro, product development, Elements.

Working with the consumer demand for hermetically sealed-type storage, FloTool, Tustin, Calif., has reinvented the mason jar with P.E.T. (polyethylene teraphthalate) plastic and a patented airtight seal called Snapware. The line is available in eight skus (from 1-qt. to 2.5-gal. containers). Snapware lids are child-friendly and attached to the container to reduce the incidence of food storage lid loss.

Juvenile storage is a path viable to discounters that wish to cater to family living. Manufacturers are betting that toy storage or arts and crafts organizers for kids will take off this year.

One Northeastern regional chain buyer said he had success merchandising the Pocket Buddy from Frem, a division of Ekco. Other child-friendly organizers gaining shelf space are the Activity Tote from KidStor made by CraftStor, Harrison, N.J.; and the Soft `N' Safe Lap Desk/tote from Little Kids, East Providence, R.I.

Cosmepak, the beauty organizer makers, offered its patented fabric-melded-into-plastic line at the Housewares Show. Its tapestry-like designs, up until now were only available in the soft storage carriers, but are now offered as hard storage totes. This material blend will be something to track.