General Merchandise: Retailer Perspective 2014
Q&A with Matt Paduano, vice president of category management, Nice N Easy Grocery Shoppes
Q. Tell us about your chain’s renewed focus on the general-merchandise category.
A. Over the years, this segment has ebbed and flowed with the economy. When times were good in the mid- to late ’90s, we were selling all sorts of items that weren’t typical of c-stores: $25 leather licensed caps, $250 leather jackets, thousands of Billy Bass and Macarena Monkeys, as well as T-shirts, Razor scooters, trading cards and many other items. Once the economy started to falter, many of these impulse items fell out of favor, and we responded by cutting way back.
We still realize that general merchandise is an important category for us but have been managing this much better than in the past. If an item doesn’t have a bar code, I am not going to bring it in. I want to make sure every item gets scanned in when received and scanned out when sold. This cuts down on shrink and unauthorized items coming into the stores. We have focused on high-margin and high-turning items such as DVDs, cellphone accessories, sunglasses and greeting cards. Items such as maps and prepaid cellular have been cut back.
We always get requests from customers and vendors to bring in items that we would not normally sell. Something that has done very well for us is bagged coal and wood pellets used by many customers as supplemental heat in their homes. We have sold thousands of bags of an item that we thought we could never sell.
Q. What are some new opportunities you are seeing in general merchandise?
A. It is tough to plan on what new general-merchandise items will do well. Many new items are a flash in the pan, like Silly Bandz were a few years ago. I rely on our people and vendors to bring to my attention a new hot item starting to trend. Usually when something is getting hot, supply is limited and demand is high. By the time supply gets high, demand already has started to drop.
The trick is to know when to get out of something and not be left with unsaleable merchandise.
Q. How do you handle HBC in your stores, and what are some of the opportunities?
A. HBC has been in flux with the supply issues. It’s starting to get better, but it has been tough keeping products on the shelf. One of our goals is to be more female-friendly. But except for a few basic items, we couldn’t provide what customers wanted using traditional c-store suppliers. Customers constantly requested makeup and accessories. We finally were able to go with the e.l.f. Cosmetics product line. We had to bring it in direct and merchandise it, but it has been very well received by our female customers.
Q. How are customers responding to branded vs. generic OTC products?
A. We have brought in more generic brands because of availability, price and more acceptance by our customers. Our biggest competition now is the dollar stores, and they do an excellent job with their generic HBC items.
Q. What trends are you seeing in prepaid, and how are those affecting your offering?
A. This has been a struggle. Years ago, you could attend The NACS Show and find dozens of prepaid providers. Products were easy to get, sales were great and margins were acceptable. All of that has eroded. There are only a few vendors left handling these items. Sales continue to decline in prepaid because of the numerous options now available. Margins have declined, and we cannot get the variety of gift cards that larger retailers are able to source. The one bright spot is proprietary gift cards; these continue to do well.
Matt Paduano is vice president of category management for Nice N Easy Grocery Shoppes, Canastota, N.Y., 86 stores.