Another Home Improvement Retailer Jumps into Convenience

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Another Home Improvement Retailer Jumps into Convenience

MUNCIE, Wis. -- Customers visiting home improvement chain Menards' location here will be able to stock up on frozen pizza in addition to their usual construction and home renovation supplies, reports the Muncie Indiana Gannett.

The Menards chain is banking on the belief that current customers will use the stores as a one-stop shop and is installing a grocery section to a number of its stores. Refrigerated cases offer milk and eggs, along with freezers containing pizzas and racks of snacks and bread have been installed in stores.

"It's not companywide, but quite a few of us are doing it," John Keller, general manager of Menards in Muncie, Wis., told the newspaper. "The idea is convenience groceries. If someone is here and shopping, they can get a gallon of milk."

He added that groceries will appeal to many of the chain's regular customers. "A lot of it is man food," he said.

"We had some contractors surprised we were taking away shelf space for traditional hardware product, but in changing our racking and the store layout, we didn't lose anything," Keller said.

The addition of food items can earn the chain some of the $478 billion made in supermarket sales in 2005, according to the Food Marketing Institute (FMI). Average weekly household grocery expenses range from $50.50 for a one-person household to $140.40 for a five-person household, according to the organization.

The addition of groceries in nonfood channels is evidence of the competition in the supermarket channel, the report stated.

"That's just a manifestation of how competitive is has become," said Bill Greer, director of communications for the FMI. "Almost every retailer is looking at selling some food, and at the same time, grocery stores are selling nonfood items. Everybody's getting into everybody else's business."

While it may been lucrative, the execution of grocery sales is complex. "The supermarket business is a very challenging business to be in," he said. "You have a net profit, after taxes that average a penny on every dollar of sales. You're dealing with perishables which require refrigeration to keep products safe."

Area supermarkets do not have much to worry about, according to supermarket industry analyst David Livingston. "People aren't going to do serious (grocery) shopping at home improvement stores," he told the paper. "There is some demand for convenience items."

In addition, some consumers will not feel comfortable buying food at a home improvement store.

Erin Griffith and her husband bought "snacky stuff" like granola bars and Rice Krispie Treats at Menards, but Griffith told the paper she wasn't likely to do much grocery shopping at the store.

"It's handy," Griffith said. "I probably wouldn't buy anything perishable there. It just feels wrong."

Others would not object. "I would use it sometimes," said longtime Delaware County resident Mark McCoy. "If I go to Menards first and then Meijer, if Menards has milk and bread, I would grab that and skip going to Meijer."

Of course, Home Depot got into the convenience retail business last year with the opening of its freestanding Home Depot Fuel c-stores.