Things Placed In Front Of The Magazine Rack: Requiem For A Chain

When I arrived in Chicago in the early 1980’s, national chains A&P and Kroger had tried unsuccessfully to penetrate the supermarket arena and been rebuffed by local favorites Dominick’s and Jewel. It wasn’t until the 1990’s when retailers began to consolidate in earnest that these local chains were purchased by national brands.

Dominick’s was first acquired by Yucaipa, and then a few years later by Safeway.

What has happened since, is a business school lesson in why sometimes national brand retailers don’t know better than locals and why economies of scale and consolidation often don’t work as advertised.

The chain, as owned by a Chicago family had a Chicago heart and feel. It was a source of local pride. The chain, as owned by Safeway, was just another “banner”. At least at the corporate level.

There's nothing in front of this rack now.
There’s nothing in front of this rack now.

The buzz about Dominick’s since the Safeway acquisition has been pretty consistent over the years. People still liked the stores, but they just weren’t the “same” nor as “good” as the original owners. Is that fair or accurate? Probably not, but that attitude certainly laid the seeds for what happened last month.

Supermarkets have a way of becoming a part of the neighborhood they serve. Chicago Tribune’s John Kass wrote an eloquent column about this when notice was given about the chain’s closure.

This was certainly true of the one near us. There were two things, really, that made it that way. One was simple, it had been there well before Safeway bought the chain. The other was more personal: The employees. Many of them had worked there for twenty years or more. I knew the cashiers, the produce stockers and many of the stock employees by name or by sight. They are (I say “are” because the store will remain open for two more weeks) friendly, personable, hard-working, and polite. They have roots in the community and many of them live nearby. One cashier spoke about how she went to a seminar to learn how to write a resume. She had worked at the store for her entire career and never needed one.

The regional chain Roundy’s has acquired eleven of the stores for their Mariano’s “banner.” Mariano’s is the brainchild of former Dominick’s executive Rob Mariano. The stores are high-end, very popular, full of fresh produce and unique brands. Our neighborhood store was not one of the lucky eleven. There were 77 Dominick’s stores remaining at the time of closure.

In case you were wondering about magazines, the Mariano’s stores I have been in have beautiful fixtures. But the mainlines are small mainline racks and there is not a lot of checkout space.

Our neighborhood store was supposed to be closed on December 28th. But it has been given a reprieve until January 25th and restocked with what looks like left over stock from other stores. The employees are still there, but up in the air about whether or not the extension means some other company is looking to acquire their space and give them a chance at remaining employed.

In the meantime, for the first New Years in a long time, there is nothing in front of the mainline rack. Nothing blocking the checkout racks. There are no magazines, books, or newspapers in the store at all.

If Heinen’s or Roundy’s or some regional chain like Sunset or Garden Fresh acquires the store, what will happen to the 20 foot mainline and tower racks? What will happen to the new checkouts that were installed last year?

For the first time ever, no Plan-O-Gram snark....
For the first time ever, no Plan-O-Gram snark….

I have no answer to that question.

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Things Placed In Front of The Magazine Rack: The Thanksgiving Turkey Edition

It’s the weekend before Thanksgiving. One of the busiest weeks in the supermarket world. In the magazine business, it’s the run up to the very busy Christmas season. Customers are in and out of the stores picking up all of the goodies they need for their Thanksgiving meals. Store traffic is way up.

We’re hosting Thanksgiving this year and the cashier and I had a good laugh when I announced that I’d probably be seeing her at least six more times this week (I’ll most likely break that promise by a few extra visits).

On the one hand, I can understand why stores will place additional displays in the check lanes. They’re temporary, the manufacturer probably paid a lot for the displays, and it’s hard to say no to ready cash when you’re in such a thin margin business like the grocery business.

Of course, we publishers and our wholesalers also operate on a very thin margin and it costs a lot of up front money to be in the check out so…

Magazines, chocolates and pretzels all go together. Just not this way.

This does make it a little difficult to promote the expansion of check out pockets.

You certainly wouldn’t want to catch a cold while you’re bringing your new magazines home.
Higher end chocolates and an empty pocket FTW.

It’s easy to say this is  a long standing problem (It is), and there’s no easy solution (Certainly seems that way), but it also doesn’t say a lot for how the retailers view our line of product. How do we change that?

Things Placed In Front of The Magazine Rack Part 7 0f…The Fully Charged Edition

This just in from our US News and World Report correspondent, Mark White, V.P. of Specialty Marketing. I’ll let his words describe what he found:

The good news is that our new Secrets of the Civil War got placement by checkout that we didn’t pay for. The bad news, of course, is that the retailer committed such assault and battery against its highly profitable magazine business that no shoppers will actually see our bookazine. More bad news: The title is not displayed on the store’s mainline.

Lasts just as long, costs less, and delivers even fewer profits…

Encroachment at the front end has long been an issue for the publications that participate in check outs, with the encroachers enjoying the benefits and the “encroachees” left scrambling to defend their turf. “Things Placed In Front of The Magazine Rack” is part of an informal calculation I now consider when budgeting for check out programs.

Although in this particular case, we’d have to argue that Mark’s “encroachee” title didn’t get much benefit because of the dump display of batteries.

I wonder if there is an algorithm that would define this? Could it be turned into a charge back “Marketing Fee”? Who would have to pay the carrying and inventory costs? I’ll have to get the accounting department on that right away.

In the meantime, Mark should know that I found Secrets of the Civil War on the mainline of my neighborhood supermarket and I thought it was a really good read (I bought a copy).

If you have a good example of “Things Placed in front of the Magazine Rack”, please forward them. Checkout, mainline, specialty rack, all are accepted and appreciated.

Things Placed in Front of The Magazine Rack: Part 5 of…

Over the years, check out space has gone from being the exclusive domain of the larger mainstream magazine publishers to space shared with soft drinks, candy and DVDs. As this blog has pointed out, we sometimes even share space with basketball hoops.

There’s nothing new about USCAN self serve checkouts. Nor is there anything new about smaller scale magazine checkouts in the USCAN aisle. Sadly, there’s nothing new either about dump bins chock full of DVDs getting placed in front of a magazine rack in the USCAN aisle.

As a “Foredeck” contributor reports:

“Couldn’t resist not sending you this….as our industry works hard to make up for loss checkout space by the invention of the USCAN/SELF SCAN checkouts and us able to get magazine displays built to conform to these checkout models (each one being different)….we STILL CONTINUE to battle the almost 6’ tall floor displays of DVD movie releases!!”

Two DVD displays (mostly full) and an empty magazine pocket. Now this is a recipe for big sales volume...

And if we walk around to the other side of the display…

Even more merchandise is getting moved over here.

Things Placed In Front of The Magazine Rack: Part 2 of…. (And One More Thing)

If I were a more fair minded person, I’d stop picking on this particular retailer. But this week, I was presented with a trifecta of bad. Perhaps even St. Thomas Aquinas would have had trouble holding back.

Hope you weren't counting on selling anything out of that tower.
Chocolate and magazines surely go together. But is this the best way?
Seriously? A buyer spent corporate money for green colored beach balls? And "they" write snarky editorials about the newsstand business?

I can be fair though. It’s my understanding that certain union rules keep the local wholesaler’s merchandiser from setting up the store. For those of us in the business who would then counter with, “Well, why doesn’t the route manager go in and work with the store merchandiser and manager”? Good question. My guess is that that has happened. Probably a few times.

In keeping with this week’s calendar, there’s only so much even St. Jude can do.

In other news:

I was hopeful last week that we were going to evade the latest round of ABC Audit reports with minimal breathless reporting on the certain demise of newsstand industry. Clearly, I had been spending too much time on the port side of the foredeck admiring the waves.

Audience Development Magazine published a column from former Ziff Davis VP of Circulation, Baird Davis that suggests that “the newsstand is nearing endangered species status”!

Still? Aren’t we dead yet?

Of course, this was picked up and distributed by Bo Sacks.

Davis does point out many disturbing trends in the latest round of ABC numbers. And it is helpful to have that staring at you in black and white. But for those of us who work on the front lines, it’s nothing new. We already knew, and the people we report to already know, and the people we work with in all avenues and all channels of the marketplace are aware.

Which doesn’t mean he shouldn’t or can’t report on what he reports on. It’s just that there’s little here that is new or helpful.

Like many people who have reported on it, Davis suggests that the recent purchase of Comag, the formerly joint national distribution venture of Hearst and Conde Nast by national magazine wholesaler, The News Group could be a positive thing. He and others have suggested that it may bridge the divides in our business and lead to better channel cooperation. Maybe between News Group and Comag. But I have yet to hear a serious explanation of how this will solve our industry problems.

Publisher’s consultant Linda Ruth, also an Audience Development Magazine columnist makes a more interesting and perhaps correct assertion that “on one level we have a massive paradigm shift here, on another it’s business as usual.”

The article wraps up with a call to our industry leaders, especially the largest publishers such as Conde Nast, Hearst, Time/Warner and others, to work together to solve the “dangerously viral” condition of the newsstand industry.

OK. How?

I must confess that I often make this clarion call myself. While I am alone in my office. With the dog out of earshot. And then I come to a “Full Stop”.

How do we get the major circulation directors of the major publishers into a room to decide the fate of a  multi billion dollar industry? Moreover, do they have the right to determine the fate for all of the participants in that industry? Can I be assured that the end result will be fair to the smaller, frequently still profitable players in the business?

“Full Stop”

On the other hand, please remove your chocolate bunny dump bin from Aisle 3. Thank you. Oh, and take those green beach balls with you too.