Regionals rack up in RTA sales - regional retail discount houses, ready-to-assemble furniture

Discount Store News, April 19, 1993 by Mary Ellen Kelly

Ready-to-assemble furniture sales are booming, according to top suppliers, and regional discount store chains like ShopKo, Fisher's Big Wheel, Caldor, Bradlees and Fred Meyer are thriving in the category, even when faced with the "Big Three" national chains.

Creative merchandising, aggressive advertising, unique furniture finishes and depth of selection have culminated in enviable category growth.

At Fisher's Big Wheel, Carl Schwartz, vp, general merchandise manager, hard lines, noted that the discounter's stores "have shown double digit increases in the last four years." Similarly, Caldor is making a "big play" with the department said Steve Fishman, former senior vp, home lines, prior to his recent resignation. RTA is definitely a growth category at Caldor, said Fishman,

Kevin Sauder, vice president, marketing, with Sauder Woodworking, noted that "I would have to go down to our eleventh regional chain account before coming upon a regional which was reported anything but significant sales increases."

Kurt Gelke, vice president of marketing and strategic planning with Bush Industries, noted, "We foresee an increase in our sales to regional chains this year."

Likewise, Bill Agnew, manager of new account development for RTA with Armstrong, forecasted, "increased sales [to regional chains] due to their flexibility in offering multiple designs or regional design preferences."

While advertising, pricing, selection and presentation were of primary importance when building sales, the strategies differ widely.

Jamesway and Fisher's are among regionals which keep a tight rein on price points, establishing themselves a resource for hot ticket furniture

Schwartz at Fisher's credits the company's sharp price points and broad selection with the growth in RTA. "The majority of the RTA items retail for less than $50. We have very strong assortments at everyday retails at $29.99, $39.99 and $49.99," Schwartz explained. The top-selling sku is a three-shelf bookcase from O'Sullivan priced at $29.99.

Some of Jamesway's latest promotions included a "buy two get one bonus" sale of an O'Sullivan four-shelf bookcase--three for $88--and a choice of an Affordable student desk, utility cart or three-shelf bookcase priced at $29.99 each.

In contrast, Caldor's top selling items is priced for above that of other regionals. Sauder's No. 2360 Entertainment Center priced at $249.99 is the best selling sku, Fishman said.

The best selling furniture collection and wood finish varies widely as well. At Caldor, the top collections include Affordable's Farm House kitchen groupings, as well as the chain's own imported white/natural line, both priced between $49.99 and $149.99, according to Fishman. The Oak Grove bedroom ensemble from Sauder priced between $59.99 and $149.99 is also a top seller at the chain.

At Fisher's, the best selling collection is Sauder's Oak Grove five-sku bedroom grouping (the successor to the supplier's Pine Creek collection), according to Schwartz.

Bradlees adheres to a single-vendor program from Sauder, but has experimented with imported, cherry-finished occasional pieces such as a small drop-leaf table, magazine rack, quilt stand and other items.

By working with one supplier, Bradlees is a better position to merchandise the RTA by collection, rather than by function. For instance, an eight-sku collection of Sauder's Sugar Creek, cross-merchandised with artificial ficus trees, creates a different impact than merchandising by function (i.e. selling all utility carts together with a variety of finishes and suppliers.) Bradlees is the exception. Most chains merchandise RTA by function rather than styling, with the exception of bedroom collections.

Leading RTA suppliers have found that regional chains have numerous advantages over nationals in the category. Bill Agnew with Armstrong said that the strengths of regionals in RTA include the ability to address local consumer preferences, and providing more instore services to the shopper. In addition, some regionals have also made a major commitment to the category, beefing up RTA advertising frequency and floor space.

Tom O'Sullivan, national sales manager with O'Sullivan, agreed that "deeper assortments" and "different, more unique styles," were fundamental differences between regional chains compared to national competitors. "The regionals have more success with our specific styled lines like Countryside, Radford and Pleasant Hill," while the "majors tend toward contemporary looks," O'Sullivan explained.

Establishing the chain as a destination center for RTA is also a powerful tool for regionals. As Gelke at Bush explained, "Probably the most effective strategies I've seen include an overpowering statement that |we're in the RTA business' by displaying an extensive assortment of product. Also, a niche presentation of selected items catering to a particular segment such as storage, promotional product, stepup merchandise, etc."

Speed works in the favor of regionals. Compared with national chains, regionals continue to be faster at implementation. As Kevin Sauder phrased it, "A regional can get into and out of a new style before a national chain has been able to get into it. Regionals can--and do--change assortments more frequently."