Drug chains feast year-round on back-to-school-stationery-home office volume

Drug Store News, Feb 6, 1989

"We can offer a tremendous variety," he continued. "We had 155 SKUs when we bought direct; now we carry 950 SKUs, and it's going through the roof!" Cowart said the two oldest Orlando-area stores have experienced a 150-percent increase in department sales for the year.

Tax time is a growing season for many chains, including Arbor Drugs. "The tax time season is starting earlier," said Dennis Wozniak, vp-purchasing. He cited planning pads, tax guides, index cards and storage items as big tax-time movers. Arbor launched a new promotion recently, featuring legal and planning pads, portfolio items, planning books, security envelopes and mailers on endcaps as a secondary location. "We wanted to create a mix of everyday strong items and high-margin products," Wozniak said, adding that the promotion generates added business for the high-end goods.

"Tax time is getting more attention from vendors and customers," added Griffin of Lewis Drug, which gradually steps up its tax-time advertising from the end of February through the April deadline. "People want to get organized because of the increasing complexity of tax returns. They think they need to be prepared to face the government. Retailers sell organization." The chain carries items ranging from file folders to mini-safes and file cabinets.

Two other segments, mailing supplies and picture frames (which are often near the stationery department), have been surprisingly successful, some chains report. Both Drug Emporium in Orlando and Minnesota-based Snyder Drug praise Intercraft's organizing system for frames. The peggable brackets hold frames upright and, because the brackets can be spaced to hold a particular size frame, the system keeps segment housekeeping at a minimum. Arbor, among other chains, has found the mailing section that it added about a year ago to be a growth area.

Several chain execs noted the growing overlap between the home office and school supply segments. "The entire school department is becoming home office in disguise," said Russ Smith, executive vp of Oklahoma-based May's Drug Stores. The chain will switch from coupon books to circulars for back-to-school this year, because "although coupon books have been successful, you can't generate enough volume with them to really pay off in a segment that has lower price points and margins," said Smith.

Most sources also said the back-to-school season has lengthened, because of the variety of school openings.

"The department is a year-round business, but back-to-school is like a mini-Christmas--it's super business for us," said Griffin, who estimates the chain sells 20,000 200-count packs of filler paper during the period.

But the biggest selling time--as much as 40 to 50 percent of the business--is "the day before, the day of and the day after" school starts, Blandford said, and others agreed.

"Our back-to-school advertising is second only to Christmas," Blandford said, noting that the chain features inserts every week through August. Among hot items for K&B this past year were Mead's Five-Star and Stuart Hall's Advance Super products. "The notebooks with pockets and upgraded covers and backs definitely increased business," he said. K&B did especially well with fashion portfolios and notebooks, and color was decidedly on the upswing.