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THE TOP 100: Grocers Put Video Back On Their Shopping Lists

1 May, 2002 By: Kurt Indvik

This week, Hive4Media will bring you Video Store Magazine's Exclusive Annual Research bonanza, the Top 100. Two parts of this unique research series will appear every day this week in this space. Today we continue the series with a look at the Top 10 mass merchant and club stores and the Top 10 grocers in the video arena. To view supporting charts and tables, see your copy of Video Store Magazine.

DVD is helping to eliminate the sour taste in grocers' mouths for home video. Last year may have seen the category turn a corner, according to distributors serving supermarkets, as they cite revenue growth in the category for supermarkets still in the video business. Even as the number of stores carrying video may have declined, DVD may have helped to keep the top 10 chains here from giving up much revenue ground, and we may yet see significant growth in video revenues again as the fourth quarter of 2001 seemed to promise.

Though supermarkets had shied away from video in the past several years -- especially in 1999 -- as complicated copy-depth programs and other issues caused grocers to exit the rental business, DVD has bolstered home video sales and even sparked a resurgence in rental.

Supermarkets account for about 7 percent of the sellthrough business and 8 percent of rentals, according to Adams Media Research.

Last year's breakout of DVD allowed supermarket chains to notch revenue increases in video for the year of between 5 percent and 10 percent, said Bill Bryant, VP of sales for Ingram Entertainment, who has been responsible for the distributor's business in more than 9,500 supermarket store locations.

“DVD penetration is nearing 30 percent, and supermarkets are experiencing healthy sales and rental transactions in the format,” he said. DVD is generating 30 percent to 40 percent of the video sales revenue in supermarkets and about 30 percent on the rental side, he noted.

Grocers pick up one DVD for every two VHS copies bought, added Matt Feinstein, VP of Supermarket Video Inc., which serves 1,500 stores with independent label videos. Feinstein and Bryant have seen growth not only in sellthrough, but in the rental business at supermarkets committed to rental.

“Most supermarkets are looking for opportunities to expand their sellthrough business,” Bryant said. “Those that are committed to the rental category are opening new departments as new store locations are established.”

Feinstein added that some supermarkets have seen rental business perk back up to 20 percent to 40 percent of overall business and are opening up more video departments in new stores. “We're seeing a lot of interest in taking advantage of this growth category while the going is good,” he said.

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