Heidi Klum fashion at a supermarket? Grocers now sell more than food

August 22, 2017

Zlati Meyer | USA TODAY

Former supermodel Heidi Klum is known for glamour and her svelte physique, but her new women’s clothing line be sold under the same roof as candy, canned peaches and disposable diapers — at a supermarket chain.

The leap from salad dressings to sun dresses is part of an industry trend.

More grocery stores turning to products that have nothing to do with food. The supermarkets are facing slim margins and more competition from everyone from online merchants to organic chains to dollar stores.

Unique items are a way to get shoppers in the door — and to spend money on items that have higher price markups than breakfast cereal, pork chops and canned corn.

Klum, the fashionista host of TV’s Project Runway, is bringing her fashions to discount supermarket chain Lidl, a European chain that just got its start in the U.S. with 10 stores in Virginia and North and South Carolina.

“We’re both pursuing the same goals in this cooperation: namely, to make fashion fun and to make this pleasure affordable for everyone,” said Klum in a statement.

The Klum collection will feature her designer fashions at its newly opened U.S. stores this fall. It will include a leather jacket, shoes, a pussybow blouse and a leopard print hoodie.

Lidl certainly isn’t alone in trying to find ways to surprise customers with unexpected merchandise. Other examples:

•Kroger. The nation’s largest conventional supermarket chain has stores that sell rugs and linens.

•Aldi. The German chain, which has opened smaller-format stores in the U.S., found room for fancy “rainfall” shower heads and curling irons. It rotates special items weekly.

•Publix. This supermarket chain peddles patio furniture and children’s books.

•Giant Eagle. The chain with more than 200 stores primarily in the Mid-Atlantic and Midwestern states, offers Beanie Babies and fidget spinners.

•Stop & Shop. Besides hamburger and buns, the chain hopes customers will stop and shop for boogie boards and walking canes.

•Sprouts. Knowing its customers, the chain that ballyhoos its organic produce selection also offers yoga mats and candles made of genuine beeswax.

•H-E-B. At this chain, picking up jewelry and fashion scarves can make a food runs a dress-up occasion.

“A lot of chains are trying to save themselves by competing in different categories other than the food sector,” said Burt Flickinger III, managing director of the Strategic Resource Group, a New York-based retail and consumer goods consulting firm. Instead of sticking to food, they are “category-killing the shopping mall.”

Line blurring into merchandise allows supermarkets to emulate mass-merchandisers like Target and Walmart, which have become grocery destinations. Selling non-food items means less concern about expiration dates, shifts in commodity pricing and decreasing revenues.

“It’s a one-stop shopping destination,” Kroger spokeswoman Kristal Howard said. “We’re offering customers anything, anytime, anywhere.” Kroger also sells watches, car seats and shower curtains.

Markups for grocery items are generally in the 12% to 23% range. By comparison, the profit margins can run 60% to 100% for apparel, 35% to 50% for consumer electronics, 40% to 65% for sporting goods and 35% to 55% for home improvement items.

Giant Eagle does a brisk business in sports memorabilia, including fan jewelry and Bobbleheads, according to Paul Abbott, the company’s director of non-food. Within 24 hours of the Pittsburgh Penguins winning the Stanley Cup, Giant Eagle stores were stocking branded hats and shirts.

Executives guessed correctly that people hosting viewing parties would want to pick up related booster items while they’re already there shopping.

“The strategy behind selling sports merchandise is it adds some incremental business and it supports our food business,” Abbott said. “It doesn’t interfere with our core business and it works within the flow of our stores.”