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Blockbuster Making Several Moves in the United Kingdom

5 Oct, 2002 By: Jessica Wolf

The world's leading video rental location is thinking a bit outside its blue box in Great Britain.

This summer, Blockbuster opened its first location within a supermarket in London at the Sainsbury Savacentre in Stockton, home entertainment trade magazine View reported.

Blockbuster and Sainsbury teamed up in the spring with plans for trial locations in six grocery locations.

As in the United States, competition among leading grocery chains is fierce in Great Britain. According to a story in British newspaper Independent, teaming with Blockbuster to provide video rental locations alongside fruits, vegetables and sundries is a step for Sainsbury to gain market share from its major competitors -- Tesco, Asda and Safeway.

Blockbuster U.K. managing director Alex Sparks told Independent the company has widespread plans to branch into hundreds more of the 460 Sainsbury supermarkets in the country.

“Once we have learned the best way to manage the project, our intention is to roll out Blockbuster stores in as many Sainsbury supermarkets as can take it,” Sparks told Independent.

The Sainsbury Blockbuster locations will offer rental VHS, DVD and games with an emphasis on new releases and chart titles. Test Sainsbury locations have slotted 500 square feet for the new video sections in exchange for a share of the revenue, Independent reported.

Renters at grocery-store locations get the same Blockbuster rent-it-now-or-get-it-free-next-time promise, View reported.

Sparks also told Independent that Blockbuster is considering testing the sale of alcohol at 20 select locations in the region later this year and plans to open 42 additional stores there in 2002.

As it is here, with its new weekly rental period, Blockbuster is testing new, longer rental schemes in Scotland. Late last month, Blockbuster locations in Scotland began a two-night rental test, View reported. Blockbuster renters in Scotland get to take home a movie and return it after two nights for the same price they were paying for a single-night rental.

Blockbuster is supporting the trial with TV, radio and print ads in the area as well as direct marketing and in-store advertising, View reported.

Great Britain is Blockbuster's largest market outside the United States. Blockbuster remains one of the chains in the country that is not ordering Warner Home Video U.K. product in the wake of that studio's decision to go to two-tiered pricing, one for rental and one for “retail” (sellthrough). The Warner practice, which began this summer, invokes a European law that allows a supplier to dictate how its product is used in the marketplace.

Nearly 60 percent of the company's international interests are in English-speaking territories (see accompanying chart.)

In their February earnings call, Blockbuster executives said that the company would focus on filling in strong international markets in 2002 and had plans to open nearly 150 new locations outside the United States.

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