High card margins cause chains to grow depts

Drug Store News, May 15, 1989

High card margins cause chains to grow depts.

Stationery's largest segment saw sales climb 11 percent in '88

Greeting cards is a high-impulse, high-margin category which performs well year-round during any type of economy.

These attributes have helped to convince a number of drug chains this year to expand their greeting cards section or move it more front-and-center in their stores, or both.

By giving greater exposure to cards, chains generally experience double-digit sales gains in the category, extend the shopper's visit in the store and make it more likely that people will buy related items such as gift wrap, figurines, balloons and the like.

Nationally, the expansion of floor space devoted to cards contributed to a modest increase in per-person consumption, thanks to greater varieties inducing more impulse sales. This in turn drove unit sales of greeting cards up between 2 percent and 3 percent in 1988.

Card sales in the mass retail market, including drug stores, are growing faster than in the specialty market, thanks to the one-stop shopping preference of working women; women account for about 90 percent of card sales. The mass market accounts for over one half of the 7.3-billion annual unit sales. Drug stores garnered a 23-percent share of the card market last year, while supermarkets had a 16-percent share, according to the Greeting Card Association.

Greeting card sales at chain drug stores climbed 11.1 percent to $636 million in 1988. It is the largest segment of the stationery department, accounting for more than 35 percent of department sales.

Among chains expanding card section footage during 1988 were Pay Less NW, Super D and K&B. Pay Less's sections now average 144 linear feet, up from a range of 112 to 140 linear feet previously. Super D added 8 feet in its larger units, augmenting its 60- to 72-foot sections with more endcaps and spinner racks, reaping increased sales. Super D also locates cards prominently: In a recently opened franchise store, for example, the first two aisles near the entrance are given over to cards and wrap.

Harco Drug, which devotes from 80 feet to 140 feet to cards, is among chains that have moved the department to an up-front location.

Wellby Drugs in Maine, a state with relatively few card shops and stationery stores, has made a strong statement with its card department, which is called "The Card Shoppe." The chain carries a large number of brands, including eight alternative card vendors, and backs the department with regular advertising.

Chains frequently use seasonal opportunities to advertise cards. This March, for example, chains including Longs, Eckerd, Revco, Peoples, CVS, Carls and SupeRx in Cincinnati advertised cards and giftwrap in their Easter presentations. Hook's ran a Bloomer Bunny coloring contest in conjunction with American Greetings, and also knocked 25 cents off any St. Patrick's Day card or novelty. Several chains used the Easter theme to heighten shoppers' awareness of their year-round selections of cards, wrap and novelties. Revco pictured Easter Bunny cards to remind customers that it discounts cards 10 percent every day.

The three major card companies, Hallmark (Ambassador), American Greetings and Gibson Greetings, generated several innovations during the past year, including new display vehicles, new lines and new fixturing.

All three companies over the past few years have moved into the fast-growing (approximately 20 percent per year) alternative-card market, once the turf of small, private companies, and American Greetings recently introduced a new nonoccasion line, called "Couples," along with a special "beam" display.

Gibson looked to build business outside the card department by creating "power panels" and "shadow boxes" during the year. The panels, or plastic trays, can be hooked onto shelves anywhere in a store. The shadow box, consisting of a two-wheel cart that can be moved to various departments, is being tried by Pay Less and Peoples Drugs, among other chains.

Snyder's Drug Stores, based in Minnetonka, Minn., reports good results with Ambassador's new "invisible fixtures" and ColorScan coding system for consumers, which the chain is trying in selected stores. The fixtures, which extend from eye-level almost to floor, "hide" storage space and allow more display, as well as showing 20 percent more of each card.

PHOTO : A new Publix combo store in Orlando, Fla., offers a wide selection of magazines and books in up-front area near greeting cards.

PHOTO : Wellby Drugs' `Card Shoppes' are appropriately named, as the unusually large selection and layout create a mini-store feeling in units such as this one in Falmouth, Maine.

PHOTO : Cards are a key department at Arbor Drugs and get prominent location in this store near Troy, Mich.