Caldor's lone '89 unit unveils new strategies - discount store

Caldor's Lone `89 Unit Unveils New Strategies

MARLBORO, N.J. -- To the strains of rhythm and blues and Dixieland jazz groups, Caldor celebrated the grand opening of its only new store for 1989.

Strains of another sort--glitches in its new scanning system--sounded the only jarring note at an event that filled the parking lot last month with eager shoppers and created traffic jams at the 14 checkouts.

Caldor, based in Norwalk, Conn., plans to pick up its expansion pace in 1990, said Don Clarke, chairman and chief executive officer, while touring store No. 120 with DSN. Caldor expects to open five new stores next year, including two or three on New York's Long Island. In 1988, it opened three.

At 83,000 square feet, the Marlboro Store was built from scratch to Caldor's first-ever prototype developed in 1988. Caldor's expansion was based on opportunistic acquisition of stores that range from 40,000 square feet to 150,000 square feet, he said.

The three 1988 stores were built to the prototype. But its older stores vary in size and shape, including 13 two-story units. That causes problems in trying to fit in merchandise, president Marc Balmuth said during the store tour.

Caldor never again will buy or build a two-story unit, Balmuth said.

The Marlboro store addresses a number of problems for Caldor, said Clarke, and incorporates the chain's latest overall strategy.

Among them is checkout scanning, he said. The Marlboro unit is the sixth Caldor store to get scanning guns, from Symbol Technologies, and the chain will compete the rollout by the end of this year, Clarke said.

All stores now have handheld price lookup scanners at customer service desks, he said, eliminating most of the time-consuming aisle price checks that have slowed Caldor's checkout service.

Another change in the consolidation of consumer electronics, photo, and records and tapes into one department, called Sight, Sound and Photo, he said. Located in the left front corner of the store, the department has its own checkout and is staffed at all times, Clarke said. Previously, Caldor had merchandised the three categories in separate departments.

Additional Sight and Sound security will come soon with electronic article surveillance tags from Checkpoint, Clarke said. Caldor now uses EAS tags in 17 of its worst-hit stores, Clarke said.

High-impact merchandising and new fixtures in shoes and apparel represent other major changes, Clarke said. Caldor increased its standard gondola height to 72 inches from 54 inches, he said. And, it stacks extra inventory high above the top shelves.

Signs invite customers to call on service phones for help in reaching merchandise on the top shelves.

In another change, Caldor is using warehouse-type racking to merchandise lawn and garden equipment, including grills and mowers. As in warehouse clubs, the racks display merchandise on lower shelves, with boxed merchandise stored above.

To make it easier for customers to pick the correct merchandise, Caldor sticks a one or two digit ID number on each boxed item that matches a similar number affixed to the display item and price signs.

Caldor also sets a new standard in high-impact merchandising by displaying swing sets on top of eight-foot-high warehouse racks.

Other new changes include a 10 percent increase in square footage devoted to children's apparel and a new 750-square-foot seasonal department set between checkout and Sight and Sound. Easter candy filled that section last month.

Caldor is emphasizing its selection of national name brands by broadening the line of existing brands, Clarke said, rather than taking on any new ones.

Examples of brands include Zenith, Quasar and Magnavox in TVs and VCRs, OshKosh in children's apparel, Lucite in paints, and Black & Decker in power tools.

Glitches Plaque Scanners

At noon on opening day, problems with Caldor's new scanning system led to checkout waits of 20 and 25 minutes. And that was in the two "express lanes."

Among the problems: the Symbol gun wouldn't scan through the shrinkwrap on Corning Vision cookware sets, selling like hotcakes at $24.99 for a seven-piece set, down from $39.99 every day. Clerks had to stop to tear off the shrinkwrap covering the bar code before they could scan the price.

The clerks also had to manually ring Kleenex tissues, on sale at 75 cents for a 175-count box, down from $1.09.

Caldor was unaware of the problem scanning the Visions set and is testing to see what happened, said Paul Carlucci, senior vice president and director of marketing. He said Kleenex printed the wrong bar code on its boxes.

Other delays stemmed from failure to enter the correct sale price into the computer database. One customer had to wait five minutes to get the price on a General Electric decorator globe light.

The price scanned at $5.69. When the customer complained that it was on sale, the clerk first checked the sale circular without success. Then she made a phone call. When all else failed, she got an aisle checker to find the posted sale price of $4.99.

"We've got some problems with scanning," Carlucci acknowledged, "But we'll fix them," he vowed. An extremely high number of items are being scanned, he said.

Caldor continues to be heavily promotional, putting out weekly newspaper sale circulars.

The grand opening sale circular included the same sale items carried in Caldor's circular for that week, as well as 30 items on sale only at the Marlboro store.

Those included: Lee's ladies' stone-wash jeans, $18.99, down from $26.99 every day; Fisher-Price Kitchen Center, $59.99, down from $74.99; and Pictionary, $16.99, down from $24.99.

Caldor sales increased 4.8 percent last year to $1.57 billion from $1.50 billion the previous year. Same store sales rose 2.6 percent.

Operating profits continue to slump, dropping to $50 million last year, down from $56 million in 1987. That compares with $70 million in 1986 and a high of $85 million in 1985.

PHOTO : Shoppers thronged the new Caldor in Marlboro, N.J.

PHOTO : Caldor chairman and ceo Don Clarke believes the new Marlboro, N.J., stores highlights many many of the chain's current strategies.

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