TREND WATCH
A roundup of business developments spotted by other publications.
New Club Houses: In the competitive, thin-margined world of discount merchandising, warehousers are always searching for ways to differentiate themselves from other retailers. In that vein, Wholesale Club, with 22 stores and sales of $377 million in the first three quarters of 1989, has chosen home and office furnishings as its niche. The company added 20,000 square feet to the 100,000 square feet of selling space in its Brook Park, Ohio, outlet, doubling display space for office supplies, equipment and furniture as well as home furnishings. If successful, the company will expand this format into other stores this year. Cleveland Plain Dealer
Ward Courts June: Montgomery Ward is another company changing to attract consumers’ attention. Ward’s biggest challenge is women’s apparel, in which it holds just 1% to 2% of the market. A new style of merchandising, along with higher-quality products, is being tested in Chicago and, if successful, will roll out to the rest of the chain soon. The department store company’s new tack is to display merchandise by life style rather than by product group, a concept that has worked well for the Limited, a successful clothing retailer. Clothing styles and colors are being updated to attract to middle-class consumers who “want to look like they have more money.” The goal for the newly designed department is to generate sales of $175 per square foot, up from $130 recorded by most Ward’s stores today. Crain’s Chicago Business
Transworld Hairlines: Johnson Products, the Chicago-based ethnic hair-care products manufacturer, is preparing itself for growth in two directions: European expansion and the addition of two product lines. As the ethnic population of Europe grows and 1992 approaches, Johnson Products is creating new distribution systems to expand its market share. The United Kingdom, France and Belgium are the main targets of the new thrust. The company is also purchasing two product lines from M&M; Products of Atlanta for $2.5 million. Chicago Tribune
Organic Certification: Fears about chemicals in food have not died since the Alar scare, and a New Jersey group has come up with a reliable way of informing consumers which foods are organically grown. The Natural Organic Farmers Assn. of New Jersey, taking a cue from New York and Pennsylvania, has developed a system to qualify farmers to use its seal as proof of organic growing methods. Farmers who want to use the association’s name must provide the group with documentation showing that they have not used synthetic fertilizers or pesticides for at least three years. While the amount of organic produce grown in the state is small, the certification program, along with 19% to 33% price premiums for the produce, should encourage more farmers to enter the market. Philadelphia Inquirer
Clear as a Bell: The price of copper is rising, while the costs of manufacturing and installing communications fiber are falling. Experts predict that the twain shall meet some time between 1992 and 1995. The same experts believe that using copper for phone lines will soon be no more cost effective than fiber and that phone companies nationwide will begin installing fiber lines to residences in greater numbers because of its superior sound. Although just 3,000 homes in the country are served by fiber, industry insiders believe that the number will grow steadily, especially in new homes. Dallas Morning News
