By  on May 8, 2006

NEW YORK — Supermarkets are dressing up their general merchandise offerings.

Seeing the success of their British counterparts in selling apparel and other soft goods, some North American supermarkets have experimented with merchandising these categories in traditional stores. The latest effort is from Loblaws, based in Brampton, Ontario, which recently launched Joe Fresh Style in its larger stores.

The response to Loblaws' apparel line far surpassed original forecasts. "It's exceeding quite extensively what our original estimates were for performance and the customer response has been much greater than we anticipated," said Louise Drouin, Loblaws' senior vice president of hard and soft goods, in an interview.

Named Joe Fresh Style after designer Joseph Mimran, the name behind the Club Monaco and Cabin labels in addition to Holt Renfrew fashions, the line was introduced last month at 40 of Loblaws' 80 superstores across Canada.

The collection includes 300 items for men and women with a top price of $34 for a lady's trenchcoat. The average price for the line, which is predominantly manufactured in China and India, is around $12.

For most supermarkets, soft goods represents an "in-and-out opportunity" for items such as leather jackets and women's handbags of increasingly better quality and variety. But many retailers and observers wonder if it's time for stores to move beyond the traditional mix of hosiery and undergarments that comprises their permanent merchandise sets.

"There is a potential for selling more soft goods in supermarkets as a way to differentiate from other formats," said Jon Hauptman, vice president of consultancy Willard Bishop, Barrington, Ill. Hauptman cited Loblaws' Joe Fresh Style line as a way to "keep people at their stores as opposed to going to supercenters or other formats, where they certainly will be stocking up for foods."

In an environment where everybody is looking for growth, "getting into new categories and adjusting what you stand for is a good idea, and I think soft goods can be one of the ways that a supermarket can help stand apart," Hauptman said.

"You're going to see more soft goods in the food class of trade," predicted Mike Lumadue, director of health and beauty and general merchandise at Weis Markets, Sunbury, Pa. "If a chain like Wal-Mart can sell general merchandise, why can't a food store sell soft goods and general merchandise?"

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