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TK's MORNING BUZZ: Grocers Are a Mixed Bag When it Comes to Their Commitment to Home Video

13 Jun, 2001 By: Thomas K. Arnold

My call last week for retailers to give me an update on supermarket video activity in their markets produced some interesting comments -- and affirmed my contention that grocers are all over the place when it comes to their commitment to home video, a category they once adored.

Some are getting in, turned on by DVD; many more are getting out, turned off by copy-depth programs and revenue-sharing.

Mel Coleman of Allied Video in Waterford, Conn., writes, "As far as I can see in Connecticut, very few supermarkets carry DVD. In the ones that do, the product is usually late-release Disney titles. I don't think supermarkets are really interested in DVD, let alone any 'video'-type movie. I sense the biggest merchandiser of VHS and DVD in Connecticut is Wal-Mart. For this discounter to sellmovies at such low margins, they have to be making some great deals with the studios. Blockbuster is no slouch in this department either. They are selling used VHS videos for as low as $1.99. There is a glut of previewed VHS. Irecently visited a video broker and picked up used VHS titles for $1 each. Certain used DVD titles are selling for as little as $4.99 each. New DVD catalog titles at Wal-Mart start at $7.99. I've stated this many times before, it's going to eventually be a sellthrough market. Within five years VHS will be a dead issue..."

Tom Hannah of Video Quest in Joliet, Ill., had this to say: "I was just out doing my yearly grocery shopping (I don't have time to cook) and video is almost nonexistent in the grocery stores in mytown. Everyone abandoned rental years ago. All the major stores have a small VHS sellthrough section which is 75% kidvids. A couple stores were selling used rental tapes that look like they are being rackjobbed by a used tape broker. Only a couple stores had any DVD and those were behind the camera/tobacco counter to prevent theft. I've noticed that my local K-Mart has put their new release DVDs in locked cases..."

And from Jerry Messinger of G.J.'s Video in Nashville, Tenn.: "I'm going to check out our situation more thoroughly but I'm delighted to report that several of our local Kroger markets have gotten out of video rental. As grocers go, they were doing a damaging job in our area, too. Rumor has it thatseveral more Krogers will be phasing out [video rental] soon, but that is only rumor. Now that you have pushed my curious button, I'll check to see what Albertson's and some of the others are up to these days; it's been a good while since I've looked, anyway."

Thanks, Jerry and the rest of you. We'll check back on some future date.

Comments? Contact TK directly at:TKArnold@aol.com

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