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Home Depot is distributing more than 6 million holiday catalogs, 20 percent more than last year, said John Costello, executive vice president for merchandising and marketing. The retailer has added children's gifts such as $279 battery-powered John Deere lawn vehicles, $40 scooters and $50 Disney lamps.
A survey of about 750 U.S. consumers by investment bank SG Cowen & Co. in New York found 61 percent planned to buy home-improvement products and tools as holiday gifts. The category wasn't included in the company's first survey last year.
This "is shaping up as a home-oriented holiday," Costello said.
Supermarkets such as Cincinnati-based Kroger, the No. 1 U.S. grocery-store operator, and Winn-Dixie are increasing offerings during the holidays of DVD players and TV sets to attract shoppers from Wal-Mart Stores Inc.
Winn-Dixie, the Jacksonville, Fla.-based grocer with stores in 12 U.S. states, posted sales declines for the last seven quarters.
Albertson's Inc., the No. 2 U.S. grocery chain, has posted annual sales declines since 2000. It began selling Toys "R" Us Inc. products last year and some of the company's more than 2,400 stores set up Toys 'R' Us display sections.
"Margins in the toy business are better than in lettuce and canned meat," said George Whalin, president of Retail Management Consultants in San Marcos, Calif. "I would think it's one of their highest-margin businesses."
Grocers' nonfood items may not boost sales in the long run, said Gary Giblen, an analyst at C.L. King & Associates in New York.
"All they're doing is hurting their price image," said Giblen. "Eighty percent of the time," prices on nonfood products aren't competitive, he said.
Kroger spokesman Gary Rhodes didn't return calls seeking comment on results from selling nonfood items.
"This is the best-coordinated holiday program we have ever put together," said James Donald, who was promoted to be Starbucks' CEO starting in March.
Dallas-based 7-Eleven Inc., the largest U.S. convenience- store chain, this month began selling video games including Microsoft Corp.'s "Halo 2," the sequel to the best-selling title for Xbox players, for $49.99.
"We want to try to remove the constraints on the kind of traditional merchandising approach that says this box has to carry these products," said Kevin Elliott, vice president of merchandising.
Petsmart, the largest pet-supplies retailer, expects to carry more than 1,000 holiday gifts, adding $12 collars with flashing green-and-red lights.
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