INTO THE FUTURE WITH PATHMARK 2000
Byline: Faye Brookman
WEST HACKENSACK, N.J. — While on her way to the mushrooms at the Pathmark 2000 supermarket here, local housewife Julie Coulter made an unanticipated stop, taking a moment to purchase a Maybelline mascara.
That’s just what Pathmark, based in Woodbridge, N.J., is hoping will happen a lot more often with its 2000 format, a store design that was inaugurated in 1992.
While the Pathmark 2000 units emphasize perishables — a category highly influential in determining which supermarket a shopper selects — they also have highly visible beauty departments.
In Pathmark 2000 stores such as the 62,000-square-foot unit that opened here last November, the cosmetics department has been relocated to a more visible location: right off the front entrance. In traditional Pathmark stores, the category was one aisle in from the perimeter of the store, an often-overlooked location.
The 2000-formatted stores average 62,000 to 64,000 square feet, larger than Pathmark’s older 50,000-square-foot units.
“We want the consumer to identify with Pathmark 2000 as a destination shop for health and beauty care in addition to her everyday consumable needs,” said company spokes- man Stan Sorkin.
Jack Futterman, chairman and chief executive officer, said Pathmark is poised to quickly expand the 2000 format. Through a combination of new stores and conversions, the company expects to have 50 Pathmark 2000 units by the end of this year, 70 by the end of 1996 and close to 90 by 1997.
The chain currently operates 143 stores in New Jersey, New York, the Philadelphia area, Connecticut and Delaware, 27 of which are the 2000 design.
Pathmark officials are already crediting the 2000 format with bolstering the bottom line. “We have had five consecutive quarters of earnings growth for the first time since our leveraged buyout,” said Anthony Cuti, president and chief operating officer.
In 1987, the company was taken over by management, including Futterman, in a move financed by Merrill Lynch. Last year was the chain’s first profitable year since the acquisition.
“We’ll continue to run in the black,” Cuti added.
Pathmark’s sales for 1994 were $4.26 billion, with projections for 1995 reaching $4.4 billion.
According to Sorkin, beauty accounts for around 1 percent of sales, which be approximately $42.6 million for 1994.
But it is expected to grow in volume in the future.
One reason is that with the 2000 format, Pathmark offers shoppers a selection to rival that of its drugstore and discount competitors.
The 72-foot-long, self-service cosmetics department includes budget lines from Emerge and Tropez, followed on the wall by a well-stocked nail care selection, including Cosmar, Kiss, NutraNail, Nature’s Oil, LaCross and Sally Hansen.
The makeup brands include Natural Glow, Maybelline’s Revitalizing, Maybelline, Cover Girl, L’Oréal, Max Factor, Almay and Revlon.
Special shelves are devoted to promotional merchandise and alternative designer fragrances including Chambord, a knockoff of Yves Saint Laurent’s Champagne, from Designer Quality Impressionists, New York.
The aisle ends with a glass case of prestige and mass fragrances, with the prestige lineup including Giorgio, Tiffany, Ysatis by Givenchy, Bijan, Guerlain’s Samsara and Christian Dior’s Poison.
A sign tells customers who need to get into the case to come to the nearby service center in the photo department.
Pathmark also has a full skin care department including Oil of Olay, L’Oréal, Nivea Visage and CCA Industries. In hair care, the department stretches 32 feet and includes the latest botanically based products.
Pathmark is hoping beauty vendors will work with the chain to offer more sampling and gift-with-purchase programs modeled after department stores, according to Sorkin.”We want them to help create a destination shop for all beauty care products,” he said.
“Supermarkets such as Pathmark show that they really know how to serve beauty needs within the confines of a food store,” said Joe DeKama, president of Designer Quality Impressionists.
Despite efforts by supermarkets like Pathmark to build a beauty business, hair care is still predominately purchased in drugstore outlets. But both food and drug outlets are starting to lose market share to mass market discounters such as Kmart and Wal-Mart. According to industry experts, all three types have advantages: Food stores have the traffic, mass stores are highly competitive when it comes to price and drugstores are able to offer the widest selection.
Although drugstores still get the lion’s share of hair care sales, with 37 percent, that’s down from 39 percent for last year, according to Information Resources, a market research firm. Food stores also lost 2 percentage points, from 35 percent to 33 percent.
Meanwhile, discount store share rose from 26 percent to 29 percent.
Food chain and drugstore retailers hope several new trends in hair care will help them keep their edge. One is a move toward protein or vitamin-enriched formulas, such as Pantene’s Pro-V. According to Sorkin of Pathmark, Pro-V is one of the chain’s best-selling beauty products.
Another trend is the craze for botanically based items, such as Clairol’s Herbal Essences, which drugstore buyers think consumers associate most highly with their class of trade.
Said one buyer, “We are trying to position ourselves as health care stores, and offering natural hair care is a good tie-in.”