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GROCERS FINDING MORE ISN’T NECESSARILY BETTER

SHARE GROCERS FINDING MORE ISN’T NECESSARILY BETTER

Pat Eichmann lumbered through the Bigg's store here, daunted by the choices: 68 varieties of bottled water, 10 versions of barbecue potato chips and 19 variations of Smucker's jams.

"You think it's one thing but it turns out to be another," he said, rifling through his overflowing cart to show how similar two frozen food packages were. "I've gone home many times with the wrong thing."The proliferation of brands, sizes and flavors has been a hot topic among grocery retailers as they try to balance shelf space against profits and the demands of customers.

"The 1990s are an era of brand consolidation," said Andrew Shore, analyst with Prudential Securities. "Brands will disappear."

"Why do we have to carry 20 different (brands and sizes) of toilet paper?" advertising manager Sue Schoenling said, recalling the topic of conversation at a management retreat. "If we only carried 10, would our shoppers care?"

A recently released Food Marketing Institute study concluded that retailers can reduce the number of brands and sizes by 5 percent to 25 percent without sac-ri-ficing sales or variety as perceived by the customer.

Procter & Gamble already has taken the lead - the Cincinnati packaged goods company is in the final six months of an 18-month program to eliminate up to 25 percent of its brand and size offerings.

The move is a relief to grocery retailers such as the Kroger Co., which need a variety of products to attract customers but cannot sell as many brands in as many sizes as companies peddle.

"Last year, 18,000 new items were introduced to us and we accepted 11,000," Kroger spokesman Reuben Shaffer said. "To eliminate (brands and sizes), we look at current trends and a strong marketing program."

In other words, the more a company supports a product with advertising, promotions and coupons, the more likely a grocer will take a risk on shelf space.

"Items like toilet tissue and paper towels are coupon-sensitive," Schoenling said. "If customers walk in with a coupon for a new product, we'd better have that brand."

In addition to any trend or ad campaign, "the customer plays a very vital part in whether we carry a certain item," Shaffer said.

The study, conducted for the grocery trade association by Willard Bishop Consulting and sponsored by Frito-Lay, came to the same conclusion.

"The fear of discontinuing the wrong item often prevents supermarket operators from taking a hard look at variety because they do not want to lose even one customer."

For example, Bigg's carries Rinso dishwasher detergent in five sizes. Although all five are meeting Bigg's sales standards, management is wondering whether customers wouldn't be just as happy with three.

Each variety of product and size stocked costs a retailer money.

The institute's study advised grocers - who carry up to 40,000 brands and sizes in a store - to consider eliminating redundant items that do not boost sales but do dilute sales across an entire product category.

As retailers work to eliminate slower-selling sizes or brands, analysts are warning producers that if they don't have the No. 1 or No. 2 brand in a category, they could be in trouble.

"If you're No. 6 in a category, you're not . . . profitable enough for the retailer and not profitable enough to justify advertising or existence on the shelf," said Gabe Lowy, a consumer researcher at Op-pen-heimer & Co.