FMCG cos bank on speed to win

Cut Time To Market Amid Downtrading Fears During Slowdown

Mumbai: Fast-moving consumer goods (FMCG) companies are using speed as a competitive weapon to win in the market place, especially when talks of a slowdown bring the possibility of downtrading into sharp focus.

Growth in the FMCG Industry has not lost steam even as other sectors have slowed down, but there is concern about a possible impact considering a deficient monsoon this year. The industry believes there is one weapon which can help companies win, and that is speed.

A Boston Consulting Group (BCG) report, ‘Speed To Win’, says increased agility can solidify a competitive position, boost profitability and reduce risk. It says for standard new product development, a seven months time to market can separate the best in class from average players. But would it also work in a slowdown? “In slowdown situation it is even more important as the consumers typically start to change their consumption patterns and it is important to refine the offerings (in terms of price pack architecture, composition and packaging) to ensure alignment with the consumer requirements,” said Abheek Singhi, partner & director, BCG.

A company can outpace its rivals by increasing its market share, boosting its negotiating leverage towards trade and positioning itself as an innovator and the mantra is: standardize, prioritize and mechanize. Take the case of Nivea lipcare. Speed helped the company redefine this category with the trade in terms of merchandising and distribution. The category was treated like an “impulse confectionery” and not like a traditional skincare category. “Our actions have followed out thoughts and results are there to be seen. We have been quicker than most of competition in developing the premium lipcare category for Nivea. All our initiatives have hit before competition, be it variety/price points/distribution. This has given us leadership,” said Rakshit Hargave, MD, Nivea India.

With compressed product life cycles, especially in some of the newer categories, being quicker to the market is a great advantage. “Speed to market is important, not just with new product development but also with reaching out to the consumer and ensuring that even the remotest of corners of the country get the products in a short period of time,” said Sunil Duggal, CEO, Dabur India.

Dabur integrated its consumer care and consumer health businesses and this was the genesis of ‘Project Speed’, which was designed to help the firm cope up with challenges by leveraging the power of its combined product portfolio through a unified sales & distribution structure. Dabur has also put in place an initiative to double its rural reach. The company is hopeful that this would enable it to have a direct access to 3,000-population villages across 10 states that account for 72% ofthe rural FMCG potential.

Some other examples are brands from mid-sized companies like Paras and Emami which were successful in gaining share as their product development times were shorter than others in the sector. When Emami conceived the idea of a men’s fairness cream, it knew it had a winning concept. What was important, however, was to ensure that it was put into market at a speed before others. “We were able to go to market within just under a year from the time the idea was conceived. This requires great agility. It took our established competitors by surprise as elements of marketing were in place within the short time,” said N Krishna Mohan, CEO, sales, supply chain and human capital, Emami. As a result, Emami enjoys market leadership in the category.

“Empowered companies with flatter and decentralized decision making structures can outpace its rivals in speed to market. This, when accompanied by stronger local consumer insights can develop into a potent competitive advantage,” said Saugata Gupta, CEO, consumer products division, Marico.

Supermarkets Make a Tryst with Record Sales on Independence Day

Top retail chains posted their highestever weekly sales in the six days to Independence Day, when heavy discount offers lured buyers to splurge on daily household products, apparels and consumer durables.

Retailers such as Future Group, Reliance Retail, Bharti Retail, RPG Group’s Spencer and K Raheja Corp’s HyperCITY — helped by active participation of several consumer product companies — offered deep discounts across product categories to push volumes at a time when consumer spending is slowing and there are fears of poor monsoon rains impacting demand.
“Consumers are looking at savings more than ever before,” said Rakesh Biyani, joint MD of the country’s largest retailer, Future Group, whose 164 Big Bazaar outlets across some 90 cities saw more than 8.1 million visitors during the week ended August 15. “We have been working to integrate our supply chain to bring down prices as far as possible.”
Several suppliers, including Coca-Cola, Britannia and Procter & Gamble, participated in special Independence week deals, helping retailers to offer higher discounts than before.
Darshana Shah, business head for marketing at HyperCITY, a hypermarket format run by Shoppers Stop, said increased vendor participation as well as entire malls going for sales helped pull in the crowds. “The sale was definitely better this year as we had stronger and bigger deals since market sentiment was soft,” she said. HyperCITY also increased its spend on marketing this year at around 2% of overall sales. During the week, Big Bazaar outlets sold more than 1.4 lakh packs of a combination of 5 kg of rice and sugar each with 5 litre of edible oil, and more than 1,500 tonnes of detergent. LED TVs, mixer-grinders and induction cookers were among the other top sellers at Big Bazaar, officials said.
Spencer’s Retail said its same-store sales increased 24% year-on-year during August 11-15, driven by beverages, health and beauty, bakery products and staples that saw over 30% sales growth. Sales of FMCG household products grew over 50% while liquor sales rose 30%, Sanjay Gupta, executive director (marketing & business development) at Spencer’s Retail, said.
Such discounting, however, reflects the escalating pressure on retailers, whose sales are slowing during non-discounted periods. “Because of the slowdown sentiment, consumers have been withholding purchases, so companies are trying to push volumes through discount seasons at retail chains,” said Mayank Shah, group product manager at Parle Products, the country’s largest biscuit maker.
But those volumes come at the cost of bottom lines, he added. Earlier this month, credit rating agency Fitch said same-store sales growth of retailers slipped across lifestyle and value-based formats in the quarter ended June, adding that it expects retailers to combat slowing sales by offering discounts.
“However, this may lead to an erosion of gross margins,” Fitch said, while revising the outlook for the Indian retail sector to negative from stable for the first half of this fiscal due to sustained decline in the discretionary spending ability. A slew of factors such as economic slowdown, deepening crisis in Europe, high food and fuel prices has impacted consumer sentiment in the country, slowing sales of everything from cars to carpets.
Some retailers use inflation as a marketing tool. A case in point is Bharti Retail’s “freedom from inflation” campaign at Easyday stores, which help people fight inflation by providing quality merchandise at low prices. Retailers such as Reliance Retail used the week to increase their customer base. Reliance introduced discount offers such as ‘double the difference’ price guarantees across various product categories.

Rural India Laps up Diapers, Colognes, Sanitary napkins.

Rural consumers are buying diapers, salty snacks, colognes and even contraceptives other than condoms like never before, despite signs of falling demand for traditional FMCG categories such as shampoos and soaps in hinterlands due to unabated inflation. Data from Nielsen, a global provider of insights and analytics, shows that tens of contemporary and indulgent product categories including sanitary napkins and chocolates are growing at high double-digit rates in Indian villages (see graphic).

“The rural mindset is open to consumption of newer, more contemporary categories, as a result driving consistent growth,” says Nielsen India VP Prashant Singh.
Nielsen categorises rural markets as those with population of less than 5,000, but there could be some exceptions. It estimates that the country’s rural FMCG market will grow to $100 billion by 2025 from $12 billion in 2011.
For MNCs like Procter & Gamble and PepsiCo, it’s an achievement of sorts to have broken ground in rural markets, by initiating consumers into newer categories such as diapers and salty snacks and upgrading them from unbranded or regional products to branded ones like in the case of cooking oils.
So, how did they achieve this?
P&G adopted the classic and tested strategy of betting on low-volume, lowpriced packages — sachets in the case of detergents and shampoo, and, for diapers, a pack of two at Rs. 15.  The move has paid off.
“We have seen a near doubling of the diaper category in rural India over the last two years,” says P&G Brand Manager (Pampers) Girish Kalyanaraman.
P&G launched the country’s first lowpriced trial pack of two Pamper diapers two years ago, educated people in rural areas about the benefits of uninterrupted overnight sleep for babies; and ran an awareness campaign on Doordarshan and satellite channels. Result: Demand for diapers has grown 90% a year in the last couple of years.
American snacks and beverages maker PepsiCo is another company that achieved tremendous growth in rural areas. Besides using fixed low price points such as Rs. 2, 3 and 5, PepsiCo has been using innovation, backward linkages for procurement and expanded distribution to drive growth in the hinterlands, a PepsiCo spokesman said.
“There’s a massive under-served demand for hygienic packaged snacks; we are expanding our manufacturing footprint and investing heavily in expanding distribution,” he said.
The company has moved away from centralised manufacturing and, instead, partners with local entrepreneurs across the country to cater to regional preferences and tastes, using locally grown ingredients. Examples for this include the extension of Kurkure brand to three local variants — Mumbai Usal, Bengali Jhaal and South India Spice—and testing of Lehar Iron Chusti puffs and biscuits at Rs. 2 in Andhra Pradesh. Kolkata-based Emami—maker of Boroplus anti-septic cream and Zandu Balm pain reliever—broke into the rural cooking oil market with a Rs. 5 pack of its edible oil Healthy & Tasty. “Rural consumers are used to buying unbranded or loose oil from local kirana shops for Rs. 5 or 10,” says Emami Group of Companies Director Aditya Agarwal, explaining the idea behind the low-cost edible oil packet.

Merchandising and Shelf Management to latch shoppers

Back in the “old days,” store brand product merchandising was easy. A retailer simply placed its store brand widgets to the right of the national brand widgets on the shelf, and called it a day.

But times – and store brand products – have changed. Most food, drug and mass merchandise retailers have made significant improvements to the quality of their own-brand products, and many of them now boast multi-tiered store brand programs. They want shoppers, therefore, to view their own brands as true brands.

Accomplishing that mission is easier said than done, however. After all, retailers lack the deep pockets of the national brands when it comes to marketing. For that reason, merchandising plays an especially critical role today in attracting consumers’ attention – and dollars.

Photo by Vito Palmisano

“With limited ad dollars to support these brands, merchandising may be, in some cases, the only way to differentiate them versus national brands beyond price,” stresses Mike Kowalczyk, vice president and general manager of the In-Store division of Livonia, Mich.-based Valassis, a media and marketing services company.

Andres Siefken, vice president of marketing for Daymon Worldwide, Stamford, Conn., agrees that strong merchandising plays a significant role in store brand growth. Effective merchandising techniques not only help drive transactional sales of store brand products, but also help make such products more accessible in the store – educating consumers and driving incremental trial.

“Data [have] proven that many people developed a better perception of private brand quality during the recession,” Siefken adds, “and that people tend to keep buying private brands after trying them.”

With rising fuel and commodity pricing wreaking havoc on consumers’ budgets, proper merchandising is even more critical than ever, notes Scott Kern, management consultant for the Parker Avery Group, an Atlanta-based boutique strategy and management consulting firm.

“While merchandising is always important, in these times of household financial stress, merchandising of private label is critically important,” he says. “Merchandising must ensure there are price-competitive private label offerings as part of the assortment for the value-conscious shopper, but not so many private label products that they take up too much of the assortment and push out brands that customers are loyal to, thereby driving them to competitors.”

Consider the shopper
Before devising any sort of strategy for a store brand merchandising overhaul, retailers will want to gain a strong understanding of basic shopper behavior within a store.

Photo by Mimi Austin

“Humans deselect before they select,” explains Dorothy Allan, vice president, business intelligence for Plano, Texas-based Crossmark, a sales and marketing services company focused on the CPG industry. “There are 7 billion people on the planet, and all of us sort and class information the same way. It is a very efficient way of processing millions of data points in a short period of time.”

That reality does not amount to an invitation for retailers to clutter up their stores, Allan notes. Instead, they need to be decisive about product placement and create a pattern within the store onto which shoppers can latch. She points to a personal example from her annual holiday store walk.

“The majority of stores were ‘painted’ with red and green displays,” Allan says. “Four months later, the one I still remember more than any other was a gum display. It was light blue and had a great offer and true appetite appeal. It certainly broke through the sea of red and green.”

Consumers also approach store shelves and displays with a mindset that varies according to the category, notes Todd Maute, a partner and senior vice president with CBX, a New York-based branding and design firm. For example, a shopper has a different mindset when he is looking to buy a differentiated product such as laundry detergent than he would have in a commodity-type category such as canned vegetables.

“I think it’s in retailers’ best interest to understand the value and role that private label plays in the category,” he says, “because the role the brand plays in the category will vary, and the role should help shape the merchandising strategy.”

Because geography also plays a part in in-store shopper behavior, retailers should take location into account in store brand merchandising.

“Localization of the merchandising strategy based upon the store demographics seems to provide the most consistent performance results,” says Daniel Galvin, executive consultant for the Parker Avery Group. “Price optimization is also most effective when combined with clear brand demographics at the local level.”

Rethink placement
Whether merchandising store brands, national brands or a combination of both, placement is key, Allan says.

“Perfect pairing or solution sales are one of the eight rules of shopper marketing,” she notes. “Make it easy for the shopper to say ‘yes’ and save time in store. Studies show if you can help the shopper find what they need more quickly, they will use the balance of their time to shop and buy more!”

Photo by Vito Palmisano

How much more? Allan says a shopper with 100 items on her list will walk out of a “shoppable” store with 104 items, citing a retail shopability study from Dr. Ray Burke of Indiana University’s Kelley School of Business in Bloomington, Ind. Therefore, retailers must find a way to engage the shopper and fortify the emotional connection with her. Building trust is all-important here, so the brands that will come out on top are those that are “authentic” and live up to their promise to the consumer.

“While innovation is important, the fundamentals of having the right products in stock – in sight and in the right locations with the right message or offer – are key to driving shopper loyalty,” she emphasizes.

The multi-tiered aspect of many retailers’ store brand programs, too, presents a challenging but exciting merchandising opportunity, Maute believes. Premium products, for example, have no national brand match for comparison purposes. And when niche store brands such as organics are added into the mix, the complexity only increases.

“You can have a three- to four-brand presence in a given category, so merchandising is critically important to communicate that you’ve got depth in the category – you’ve got price if they want price, and you’ve got unique and differentiated if they want unique and differentiated,” he says.

Maute points to New York-based Duane Reade as one retailer that really knows how to merchandise its premium food tier right along with its opening price point items. The retailers’ assortment of premium cookies, for example, gets a prime eye-level space block, with its no-name skyline-themed value brand situated below it. The national brand, meanwhile, gets non-prime placement, meaning Duane Reade gives its own brands the star treatment.

Still, the traditional approach – with store brands placed to the right of the national brands on the shelf – does still make sense for certain products and certain categories, Maute says. For example, it can work with ibuprofen or canned commodities to suggest store brand quality is on par with that of its national brand shelf-mates.

“At the same time, if you’re trying to say you have breadth and depth in the category – and different types of canned fruit items, for example – you might want to block set them together because then you will have a much larger presence in the category versus being checker-boarded throughout the aisle,” he says. “And some of those aisles are quite large.”

When done right, cross-merchandising also can be an effective element in a store brand merchandising strategy.

“The cross-promotion of private label products with complementary national brands is a great way to drive sales for both and provide solutions for shoppers at the same time,” says Jeff Weidauer, vice president of marketing and strategy for Vestcom, a Little Rock, Ark.-based specialist in retail shelf-edge solutions. “One of the more successful implementations we’ve seen is to include a private brand product as a tie-in to every end cap in the store.”

The best strategies, Weidauer adds, strive to build customer confidence in store brand products, treating them as quality brands in their own right instead of simply low-cost alternatives.

Retailers also should support strategic store brand placement with additional marketing, says Rick Davis, CEO of Davaco, a retail services provider headquartered in Dallas. He says point-of-sale and other store signage, in-store coupons, promotions and “seasonal pushes” all are proven methods of moving product and boosting category sales.

Go above and beyond
With all of the current interest in store brand product innovation, retailers also have a huge opportunity to infuse a bit of innovation into the merchandising of such products. Shopper-engaging placement could involve the creation of category “destinations” within the store, Siefken’s favorite innovative strategy. Although he notes that the vast majority of “good retailers” have been busy creating such areas, the best ones pull it off by going beyond just entertainment – they have an “experiential” focus. Moreover, such destinations make a fine showcase for premium and specialty-type private label offerings.

Photo courtesy of CBX

Siefken points to Schnucks’ Culinaria with cooking classes inside the store, Wegmans’ tea bar/center and Carrefour’s wine club/in-store destination as great examples. They make for “retailtainment,” he says, providing a total product and category experience.

The approach also allows shoppers to use all five senses in key categories within the store to drive incremental category sales, Siefken says. Moreover, such creative merchandising really sets one retailer apart from another.

For his part, Maute sees opportunities for retailers to merchandise store brand “solutions” in certain categories, rather than facing off product by product against the national brands.

“I think there’s probably value in assessing if it makes sense to merchandise the ‘baby solution’ versus diaper to diaper, baby oil to baby oil or wipe to wipe,” he says. “And I think you’re seeing more and more private label expand into the perimeter of the store – you can also block set in those categories.”

‘One of the more successful implementations we’ve seen is to include a private brand product as a tie-in to every end cap in the store.’
– Jeff Weidauer, vice president of marketing and strategy, Vestcom

Speaking of category-specific merchandising, Kowalczyk likes what Supervalu has done in the launch and merchandising support of own brand pet offerings.

“Through an innovative positioning and strategy perspective, they have introduced a viable alternative to pet owners with their evoked set of brands,” he says.

And Kowalczyk points to product coupling as the “next level of innovation” on the store brand merchandising front, a practice that once was limited to the national brands.

“The costs for both in-home and in-store coupling strategies and the associated tactics are such that private label products can now reach consumers actually seeking to test, try and hopefully become loyal,” he stresses.

Another innovation gaining traction on the merchandising/marketing side is digital signage, Davis points out. In addition to being an easy-to-change, cost-effective configuration that helps to sell products, the technology can serve multiple functions within the store.

“For example, some retailers are selling advertising space on their digital signage for incremental profits,” he says. “And because content is controlled from a centralized location, retailers are even using their digital signage to facilitate internal training programs to be reviewed before or after store hours.”

Siefken believes integrated programs, not stand-alone programs, are the wave of the future. They are not so easy, however, to pull off.

“My advice is to take a close look at how the world has evolved and how people are now all connected,” he says. “It’s easy in theory for a retailer to create a program around their brands and integrate it with a social media strategy. The problem I’ve seen is in execution.”

He advises retailers to seek outside help from the experts when they need it here.

Photo courtesy of Fresh & Easy Neighborhood Market

“The new integrated programs will not only help drive sales, but store traffic and loyalty,” he adds.

Although grocery retailers generally have been slow to adopt new technology – in part because they realize razor-thin margins in comparison to other retail segments – Galvin expects mobile retail to play a bigger role in grocery’s future.

“In the near- and mid-term, the increase of retail price optimization and the basic blocking and tackling of marketing and merchandising coordination, brand management and supply chain integration are likely to absorb any grocery retailer’s appetite and capacity for change,” he says.

Avoid mistakes
When it comes to store brands, no one merchandising approach will fit every retailer or every category – a combination of different approaches almost always will work best. But the most successful retailers also will be careful to avoid some common merchandising missteps.

The most common of these mistakes is not treating own brands as real brands, Weidauer contends.

‘Creating clear brand architectures that are relevant to the defined target demographics are critical to maximizing private label success.’
– Scott Kern, management consultant, Parker Avery Group

“This results in poor shelf placement, meaning not at eye level or without a sufficient number of facings,” he says. “Retailers should merchandise these products as if they are proud of them.”

Failure to give store brand products their fair share of end cap placement and over-promoting these items on a price-only basis also are mistakes to avoid, Weidauer says. Ongoing price promotions not only weaken the value proposition for the shopper, but also change the perception from “quality alternative” to “cheap substitute,” he contends.

Compared to retail “leaders,” retail “followers” tend to have longer planning and strategy cycles, Kern notes – 12 months or more. What’s more, they typically fail to coordinate marketing and merchandising to the extent of the leaders.

Yet another common retailer mistake, Kowalczyk says, is not using all the tools available to them in store.

“While TV, magazine and traditional advertising may not be in the budget for most private label brands, using call-to-action tactics such as signage, at-shelf couponing and advertising certainly is within reason and has been proven to grow these brands as much, if not more so, than other forms of support.”

Too often, retailers do not take consumer demographics into the product development plan, Kern says, which ultimately has a negative impact on merchandising. By offering a single brand for all store brand products, he believes retailers send “muddy messages” to shoppers and typically reap less-than-optimal results.

“Creating clear brand architectures that are relevant to the defined target demographics are critical to maximizing private label success,” he says. “Many grocers tend to focus on low-end private label products, and there remains an opportunity for premium private label offerings in such areas as organics. Multiple brands focused on targeted brand demographics enable clearer messaging and can be price-optimized to compete with national market equivalents and value-priced competitors.”

Finally, Maute believes many retailers underestimate the relationship between product design and merchandising. The two are so connected that his company attempts to get a handle on a retailer’s merchandising strategy before designing a new store brand package or packaging line.

“We’re working with one customer that is very active in the promotion of frozen commodities, and products tend to move a lot because of promotions,” he says. “We actually changed the design strategy to get more continuity across colors and items so that even if the items do move around a lot, they still get a good brand presence. If we didn’t understand that merchandising strategy, we probably would have approached color more on product than on brand.”

Retail majors in rightsizing mode

IN A bid to maximise sales per square feet, Indias frontline retailers are increasingly looking at ways to restructure their stores. Leading players like Future Group, Spencers Retail, Shoppers Stop and Vishal Retail plan to rightsize their stores and replace slow-moving categories with speciality formats under the shop-in-shop model.

Retailers feel such an approach will also help them improve gross margin returns per sq ft in the present environment when same store sales growth is quite weak. A shop-inshop approach helps increase revenue per sq ft. It enables best utilisation of space and is a good way to do away with excess space and reduce space for categories which are not doing well, Future Group CEORetail Rakesh Biyani told ET.

Future Group plans to offer a wider choice in large-format stores like Big Bazaar by setting up speciality zones under the shop-in-shop model. This approach provides consumers with a wider choice. We have a similar model for the Pantaloons outlets in the East and may replicate it elsewhere, Mr Biyani said. Shoppers Stop recently tied up with Cafe Coffee Day to manage cafes within its stores. It is an ongoing process to maximise returns, said managing director BS Nagesh. The most common categories where retailers are looking for shop-inshop outlets include food and beverage, saris and areas which have more customerconnect requirement like cosmetics, personal care products, fine jewellery and salons, says Retailers Association of India CEO Kumar Rajagopalan.

Spencers Retail, which is presently rightsizing by cutting down on 20% of its retail space, also plans to focus on shopinshops. In a slowdown, shop-in-shops are the best way to leverage domain knowledge of speciality players and maximise returns. Such outlets will be set up through our groups speciality formats like Books & Beyond, Mera World, Music World as well as in collaboration with other players, Spencers Retail marketing head Samar S Sheikhawat.

Vishal Retail group president Ambeek Khemka said the retailer too is restructuring its 171 stores nationally. We have already completed the exercise for 35-odd stores and the results are encouraging. In fact, small and regional brands are lapping up the opportunity to follow the shop-in-shops model, he said.

Economic Times: Writankar Mukherjee & Sreeradha D Basu, KOLKATA

Giant Eagle’s beer requests worry Western Pennsylvania outlets Buzz up!

Giant Eagle is bringing the battle over supermarket beer sales to the Pittsburgh region, with a plan to sell six-packs from restaurants inside some of its stores.

As food chains nationwide boost brew sales, the O’Hara grocery chain is asking the state Liquor Control Board to transfer a restaurant liquor license to a Giant Eagle Market District store expected to open this fall at the new Settlers Ridge development in Robinson. Giant Eagle is pursuing other licenses, including one for a store in Pine.

Wegmans and other grocers in the state have opened cafe-style areas in some stores that sell six-packs of beer along with other beverages. The small, in-store restaurants allow them to take advantage of recent legal interpretations of Pennsylvania’s restrictive liquor code, which bars most sales from grocery stores.

Now it’s Giant Eagle’s turn.

Spokesman Dick Roberts said Giant Eagle has yet to work out some details, such as what brands of beer it might sell, but one thing’s certain: Pennsylvania’s licensed beer distributors will fight before the Robinson store or others ring up their first sales.

The Malt Beverage Distributors Association is challenging each license transfer to go before the LCB. A board hearing examiner will schedule a public hearing in the Pittsburgh area before a final vote on Giant Eagle’s license for the Robinson supermarket, said LCB spokeswoman Francesca Chapman.

Mary Lou Hogan, executive secretary and counsel for the Philadelphia-based distributors association, said grocery chains are stripping away beer sales from neighborhood businesses that only can sell it by the case or keg, without having to follow the same rules such as limits on hours.

Peggy Alston worries sales will fall at her family’s Pike Beverage Outlet, a distributorship about two miles from Giant Eagle’s Settlers Ridge site.

“I’m not allowed to sell flowers or groceries or baked goods for extra income, but Sheetz and then Wegmans and now Giant Eagle can get licenses to sell beer,” she said. “It’s another slap in the face for small businesses, and for the customers it will mean limited choice and service.”

Another nearby Giant Eagle supermarket sends customers from other states who are used to buying beer in grocery stores to her business, Alston said.

Nationwide beer sales last year weakened in bars, restaurants and other businesses where customers typically drink on-site, while they increased 1.2 percent in grocery and convenience stores, the Beer Institute said.

“Beer and wine sales are critically important to supermarket sales,” said retail analyst Burt P. Flickinger III. While the profit margin on most groceries might be 1 or 2 cents on the dollar, he said, it averages 3 to 4 cents on beer sales.

Pennsylvania’s liquor laws hurt consumers, regional brewers such as Lawrenceville’s Iron City Brewing Co. and grocers, he said.

“When you have one of the most inefficient distribution systems in America, it adds tremendous costs for consumers and it penalizes the sales and operating profits of food retailers who, were they able to sell beer, could compete more effectively with the Wal-Marts and Sam’s and other big players,” he said.

Consumers, too, have differing opinions.

“Buying beer and wine (at the supermarket) is like getting milk and bread,” said Rob Hornison of Hempfield.

Colleen Friedline, 55, of Export opposes loosening liquor restrictions.

“There’s enough temptation for people to go out and get drunk, to ruin their lives and the lives of their families … and kill other people,” she said.

Pennsylvania’s restrictions on beer sales are thought to be the second-tightest in the nation, behind Utah, said Cris Hoel, a Pittsburgh attorney who has represented alcohol trade associations and grocery chains, but isn’t involved in the cases here.

The state’s tough stance on liquor, including its controlled beer-distribution system, dates to the repeal of Prohibition in 1933, when states were told to set their own laws.

Then-Gov. Gifford Pinchot, an ardent alcohol foe, reluctantly accepted its legalization.

“He did his best to make sure the laws were as harshly worded as they could be,” Hoel said. “We’re still living with the remnants of that today.”

Subsequent attempts to loosen controls went nowhere. Gov. Dick Thornburgh ran into opposition from religious and other groups in 1981, when he tried to sell off state liquor stores. Later privatization attempts by Gov. Tom Ridge in 1997 and, most recently, state Sen. Rob Wonderling, R-Montgomery County, failed.

Hoel noted one reason for maintaining the status quo: Pennsylvania’s wine and liquor sales generated $1.76 billion last year, putting $433 million into the state Treasury.

With the licenses it’s seeking, Giant Eagle couldn’t sell alcoholic beverages on shelves, as it does in Ohio. The Pennsylvania stores would partition off areas with at least 400 square feet that seat 30 or more people, serve food prepared on site and ring up their own sales.

Customers could buy the equivalent of up to two six-packs to carry out or order a beer or glass of wine to drink at the restaurant.

Wegmans was the first supermarket chain to open restaurants and sell beer in Eastern Pennsylvania, and Commonwealth Court in February upheld the licenses. The beer distributors association is waiting for the state Supreme Court to decide whether it will consider a further appeal.

Wegmans has obtained or is applying for licenses for 14 stores, according to the Liquor Control Board’s Web site. In addition to Giant Eagle’s applications, Weis Markets and Whole Foods Markets are moving toward beer sales in Pennsylvania.

The license for Giant Eagle’s Robinson store is the first to go before the LCB for approval. Supervisors in Pine, where a large, new-concept Giant Eagle opened in February, have scheduled a May 4 public hearing on a license transfer.

Make-up and marketplaces are tops for beauty and apparel shoppers.

In March, eBay came out on top for traffic to beauty and apparel retail sites while Mary Kay was No. 1 for time spent, Nielsen Online reports.

eBay was the traffic winner despite posting a 44% traffic decline. 6.5 million shoppers visited eBay Clothing, Shoes and Accessories last month, Zappos was second in line with 5.2 million visitors, a 55% increase from a year earlier.

Visitors to Mary Kay spent on average a whopping 2 hours and 23 minutes on the make-up site—far longer than Avon, which ranked No. 2 with nearly 50 minutes.

The top 10 online apparel and beauty shopping destinations in March with unique visitors in millions this year compared to a year earlier and the percent change, according to Nielsen Online were:

* eBay Clothing Shoes & Accessories, 6.57,11.64, -44%
* Zappos.com, 5.23, 3.38, 55%
* Victoria`s Secret, 4.89, 4.20, 16%
* Avon 3.94, 4.20, -6%
* Lands’ End, 3.88, 3.47, 12%
* The Gap, 3.81, 2.38, 60%
* Old Navy, 3.54, 3.36, 5%
* eBay Jewelry and Watches, 2.72, 4.81, -44%
* L.L. Bean, 2.48, 2.70, -8%
* Shoebuy.com, 2.25, 1.94, 16%

Unique visitors count only once each shopper who came to a site, no matter how many times the shopper visited. This is a custom list compiled by Internet Retailer of the top e-commerce sites in this category based on Nielsen Online data. Rankings may contain multiple web sites from the same retailer or manufacturer.

By length of visit, the top 10 apparel and beauty sites in March (hours:minutes:seconds), according to Nielsen Online, were:

* Mary Kay, 2:23:10
* Avon, 0:49:58
* Lane Bryant, 0:30:17
* Woman Within, 0:18:49
* Blair.com, 0:18:25
* OneStopPlus.com, 0:16:30
* Victoria’s Secret, 0:16:24
* Sierra Trading Post, 0:15:11
* DavidsBridal.com, 0:14:45
* eBay Clothing Shoes and Accessories, 0:14:04

The top eight consumer goods industry segments in terms of online ad impressions (in millions) in March, according to Nielsen data, were:

* Food & Beverage, 3,490.70
* Personal Care, 3,354.67
* Print Publishing, 1,159.02
* Home & Garden, 985.01
* Apparel & Jewelry, 685.80
* Automotive Supply, 417.50
* Toy & Hobby, 150.57
* Recreational Gear, 146.14

%d bloggers like this: