Caldor breaks discounter mold in building phot biz

Discount Store News, April 2, 1984

WEST PATERSON, N.J.--Though it hasn't changed appreciably in at least four years, Caldor's photo department remains perched at the upper reaches of the discount industry.

The area's assortment of cameras and heavy reliance on accessories and supplies was designed to appeal to virtually every segment of the consumer market, from casual snapshooter to advanced amateur and even to professional.

In establishing the department's position, cAldor appears to have won a unique place--not only among full-line discounters, but possibly among all photo retailers. In doing so, it broke what many consider a cardinal rule in the trade by attempting to be "all things to all people."

But the department's appeal is still there--for now, at least. Yet, it could also easily be argued that unless the chain begins to consider bold new strides in the area, increased competition from other discounters and classes of trade may soon make it vulnerable.

Already, other discounters have approached its assortment of cameras, especially with the growing industry emphasis on autofocus 35mm rangefinders and programmable SLR's. Caldor's advantage remains in the breadth of its assortments and, perhaps more importantly, in its continuing strength in high-margin accessories.

Camera accessories and darkroom supplies and equipment are priced at roughly 5%-10% below full retail, according to several photo buyers who periodically shop the chain. As a result, margins in those areas typically range from 40% to 60% and are unquestionably where the department earns the bulk of its profits, they said.

That pricing structure works since most items are carried mostly by full-markup specialty stores and aren't as apt to be price-shopped, they added.

Another Perspective

Film, processing and cameras are another story, however.

There, Caldor was priced well below the specialty stores and on a par with other disconters and catalogers. Margins on those itmes were estimated at 10% on promotion and 20% every day, according to the buyers.

There were some exceptions among certain high-visibility items, such as instant film and 12-exposure processing.

"They're working on less than 5% and using it as a loss leader," said one of the buyers. "They know their customers shop those areas and that's how they've developed a strong discount image."

Caldor has also maintained its edge by aggressively promoting its photo department. In virtually every ROP and tab advertisement containing hard goods items, photo occupies a prominent location--usually on the front or back cover--and a substantial amount of space.

For example, in two pre-christmas tabs nearly 20 photo department items--cameras, film and lenses--were promoted, with one or two items on the front page and remaining items inside. Space varied from roughly one half to three-quarters of a tab page, total.

That promotional stance may have made Caldor something of a target for its competitors, such as K mart and Bradlees. Though offerings by those two were narrower, items that overlapped were prominently featured in their ads and priced almost to the penny the same as Caldor.

But, where its competitors' assortments of cameras tolal no more than 15 items each, taken from instants, discs, 110's and 35mm, Caldor's totals at lest 30. Nearly two-thirds are in higher-ticket 35mm, including several manal SLR's--a category from which most discounters have so far shied away. Everyday prices range from about $10 (after rebate) for a Kodak instant to $329.87 for a Canon A-1 35mm. To date, most discont chains around the country have avoided topping the $300 price point, fearing that their customer base wouldn't support the effort.

But Caldor's effort to appear neck-deep in the photo business comes in its merchandising of accessories, supplies, family photo albums and frames.

For example, three 8-ft.-long gondola runs contain items for the advanced amateur and professional. One, for the darkroom, contains five shelves of processing chemicals and photographic papers. Positioned opposite is another run of darkroom equipment and supplies, including four enlargers that tower over the other merchandise.

Still another contains camera accessories--mostly on peg hooks--such as stationery lighting devices, lens hoods and camera straps. The run also contains higher ticket accessories, such as tripods (6), and a light-diffusing umbrella--an item used almost exclusively by the pros.

The combination of this assortment and its slightly discounted pricing has had the additional effect of making Caldor's photo department a destination store for many consumers.