Summertime & The GM Profits Are Easy

Commentary From Our President

Summertime & The GM Profits Are Easy
By Mike Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

Spring and summer selling of general merchandise appears headed for record levels in supermarkets this year.

The rosy outlook stems from expansion in basics like larger stores (more space for seasonal display) and better assortments of higher-priced merchandise. A mild winter and early spring have whetted the appetite to get out and enjoy the great out-doors. So spring-summer merchandise should be displayed particularly early this year.

But there’s a lot more to seasonal selling, especially in 2002. There’s a groundswell of consumer interest in home entertaining and home decor. Marketers say the family-fun-at-home movement surfaced after the terrible events of Sept. 11 when the importance of family and friends and togetherness received a higher priority.

At-home events move a lot of food and nonfood products. They span a wide range and the spring-summer season gets more than its share. There are graduation and birthday parties, baby and bridal showers, pool parties, TV-event parties like the ones recently held for Super Bowl, Academy Awards, Olympics and NCAA basketball, and, for sure, there’ll be more cookouts in the backyard this year.

On the product front, higher-ticket import goods have raised the bar with more reliable sources abroad so that seasonal buyers can help supermarkets match–or even beat–the best prices of mass merchandisers. High-ticket GM items like air conditioners, television sets, gas grills, fryers and patio sets, along with a wide range of lower priced basics like kites, electric fans, citronella candles, paper goods and playballs.

Supermarket operators are often squeamish about carrying over summer seasonals. There’s a tendency to order less than what is expected to sell in the long summer season because no one wants surplus inventory.

But there is a better way to order seasonals: order what you expect to sell (not less) and perhaps even a little more. Then, as the season progresses, mark down the merchandise in such a way that more volume is produced and good overall dollar margin is maintained. The likelihood of carryover is diminished dramatically-and fewer customers will be disappointed by stockouts on wanted items.

For the markdown process to work, a preplanned pricing and margin schedule must be developed along with projected rates of sale by item. They may have to be adjusted for unusual weather conditions. In essence, the markdown schedule provides the equivalent of a projected profit plan, and remember strong signing and advertising should accompany all markdowns.

There’s nothing like keeping record of seasonal sales to help with purchases for next year. So, if you haven’t already set up a log, do so. You’ll be glad to have it when planning next year’s orders.

Seasonal selling with strong merchandising support at store level does more than help the bottom line. It provides excitement for the whole store. Customers like lively, colorful change, and seasonal non-foods fit the bill. Like the vibrance of summer itself, spring/summer seasonal non-foods are vital to high-powered supermarket merchandising.

For comments or questions, E-mail: msleeper@imperialdistributors.com