Candy and a Movie:  A Perfect Two-Step

by Renee Marisa Covino
In a rural market, the local video store can be like the Times Square of the town. So you could say that with a focus on rural and secondary markets, Movie Gallery has built approximately 2,400 “Times Squares” in all 50 states, several Canadian provinces, and even a few in Mexico. By all industry definitions, this chain is a huge player — second only to Blockbuster. And yet it operates humbly, with a country-like attention to detail in many individual markets.
“We’re a large company, but it’s like we don’t know it yet,” says Gary Hay, vice president of concessions and novelties for the Dothan, Ala.-based chain. “We still see ourselves as a small player, and one that can do things differently — it doesn’t have to be the cookie-cutter way.”
And so the chain’s 80-or-so SKUs of confections, which actually do include a few cookies, are very open to experimentation. That open way of thinking has also upgraded the category as a larger contributor to Movie Gallery’s growing success. Hay says that while video rentals are “the bread and butter of the business,” candy or “concessions,” as he calls them, are the perfect accoutrements. For the past two to three years, the chain has choreographed an especially nice two-step, creating “a candy store within a video store” which works particularly well in its rural markets.
Country Music Mix
Candy Buyer Gary Hay knows that a good portion of his Movie Gallery customers are country music fans — and so he’s dreaming up a candy promotion that should have them dancing in the aisles. "In theaters, Nestlé has a deal called Mix It Ups where moviegoers get a tub of popcorn and a 1.4-ounce bag of Crunch and a 1.4-ounce bag of Raisinets and they mix it all up and eat it," Hay explains. "We’ve been tracking it and want to do our own version — tied in to a promotion with some country music artists, where our customers mix up the candy and mix up the artists to win prizes like posters and concert tickets." Movie Gallery apparently has ties in Nashville — through its Movie Gallery Veteran’s Stadium — a football stadium that it got the naming rights to after making a large donation to Alabama’s Troy State University, where the college’s highly anticipated annual Blue/Gray game is now being held every December. "Out here, college football is king," explains Hay. So last Christmas, Phil Vassar performed at halftime and connected Hay to a host of country music people in Nashville. While Hay hasn’t signed the final deal yet, he’s looking at country stars such as Sara Evans, Jeff Black and Diamond Rio. "The artists have potentially agreed — it will give them national exposure in all of our stores, and the package will allow them to promote their new CDs coming out," Hay explains. Mix It Ups — which combine Nestlé Buncha Crunch or Nestlé Raisinets and microwave popcorn — will be supplied by Indianapolis-based Showtime Concessions Supply. Beyond this one promotion, Hay envisions tying certain candies into country music artists’ particular songs. "We’ll have to go through some red tape to do all this, but we feel that with our Nashville relationships and the country music nature of our customers, it will become a huge national program of ours," says Hay.
Gotta have fun
“In a rural market, the video store is the place in town where people want to go — sometimes it’s the only place in town,” Hay explains. “They rent a movie and buy candy that usually can’t be found anywhere else around. It’s a total experience. The good thing about the candy is that it really makes it fun, and that’s what the movie business is all about, enjoyment and fun.”
Apparently, that’s what being a candy buyer in a rural movie rental business is about, too. Hay is as enticed by the new candy offerings as his customers, and it shows in the way he talks about the category.
“You used to think only about a select few when you thought of selling candy — Snickers and Babe Ruth and Butterfinger, for example — but now there’s so much out there, it’s unbelievable,” he exclaims.
Movie Gallery likes working with the large candy companies, especially since all stores just “went full EDI with our candy distributor,” Coast to Coast Candy, Mineola, N.Y., and yet it is always on the lookout “to find anything unique,” according to Hay. Its core candy is “concession size” candy — theater-size boxes of Raisinets, Goobers, Reese’s Pieces, Snow Caps, Twizzlers, Jelly Belly, etc. “We don’t try to get into the convenience-store single-size,” says Hay. “That’s not for us.”
On the flip side of core candy is novelty candy, which Movie Gallery has made “a big deal” about now for the second year. “Our novelty kids’ rack holds about 50 items — and those are plan-o-grammed items,” says Hay. “These are the hottest trend items that come in. We plan-o-gram them, and track their success. Then we either plan-o-gram them regularly or move them out, depending on how they do.”
Hay says the chain has “a great relationship with Au’some, Hershey, Masterfoods, Topps, Too Tarts, and Willie Wonka,” in novelty candy, which typically ranges in price from 79 cents to $1.19.
New additions
Always on the lookout for “new blood” in the category, the chain has recently added Wrigley, Dayhoff and Ghirardelli to the non-novelty candy mix.
Hay likes to give credit to candy manufacturers for making his job a cinch. “We think selling candy to our customers is easy,” he begins. “When a customer comes in, which typically consists of a family of three or four, the kids go right to the candy racks. The packaging, the color schemes, and all the visual appeal of the candy entice customers to pick it up. We’ve watched customers of all ages do this, even if they have no intention of buying it. But then they usually do — and there’s no selling involved. It’s really amazing how these candy presentations sell themselves.”
Hay is being modest, of course. The truth is he and Movie Gallery keep the candy presentations sharp by remaining flexible to the candy industry, and by maintaining a sense of savvy for their country-market customers.
Video Chain Co-Founder
Is Committed to Candy
A few additional words from Harrison Parrish, co-founder of Movie Gallery.

"We give Blockbuster a lot of credit for making this industry what it is," says Harrison Parrish, Movie Gallery co-founder. "In those early days of fragmentation and ease of entry, anybody could put videos together and rent them, and everyone did.
"In 1985, my partner, Joe Malugen, and I bought an existing video store, and that’s how we started. We picked up confections early on, but we didn’t do a good job with them.
“We began to really focus on the category in 1994. We saw several competitors, including Blockbuster, having success with it. And always being students of this industry, we try to take the best ideas from the best operators and adapt them to what we’re doing.
"What sets us apart are our tertiary markets and our focus on being a low-cost operator. Our best customers come in three, sometimes four times a week, and we try hard not to disappoint them. We always want to have a video they want and a fresh piece of candy. But all retail establishments sooner or later realize that they’re only as good as their worst customer thinks they are, so that’s who we also aim to please — our worst customer.
"Our management team regularly stops customers in stores and asks them what we could do to improve the offering and the service level. Our customers have asked for more selection in candy, and so we increased the space. As one of Gary’s assistants now in confection, I’m constantly fighting our operations people for more and more space in the category. It’s increased a lot for the past few years, but it needs to be expanded even more.
"We like to stick to the theater track in candy, but we’ve expanded our offerings far and above what the movie theaters offer in candy SKUs. We keep a close watch on the general trends in the industry, too; surveys tell us what customers are gravitating to.
"We’ve also tried some brand new items that have done very well. We don’t mind being the guinea pig for some candy companies. In fact, we enjoy being first to market with opportunities. We like having that test market advantage, because sometimes it really works. We’re not afraid to take a shot."
Every month, for example, Movie Gallery features a “Candy of the Month.”
“We put up a great sign and price it at 99 cents — which is typically 50 cents off,” says Hay. Recently promoted items include Teddy Gummies, Sour Patch Kids, Gummi Worms and Whoppers. They are chosen based on vendors and inventory control.
“Now vendors call us up wanting to be Candy of the Month,” Hay begins. “They pay us a promotional allowance — usually one to four percent — which could add up to $5,000 for the month.
“Sometimes, we use the promotion as a way to control inventory,” he continues. When you have this many stores, one store may have just the right amount of a certain candy and another store may have too much. So we use Candy of the Month to trim it down, even though we realize we won’t be making as much margin. It reduces inventory and adds a little excitement to the store. And every customer has a certain amount of extra money to spend — and sometimes 99 cents is that magic number.”
Some other examples of Movie Gallery’s promotional creativity include the following.
Nostalgia. “We did a tie-in with Nestle and the O’Henry bars, and it worked out great,” says Hay. “We made a header card and labeled it ‘Nostalgia Candy’ and it went through last fourth quarter — it was a huge success.”
Theatrical Mix. “If a movie comes out like Spiderman, we try to hunt out all the good candy tie-ins and throw it in the mix,” says Hay. “We try to have it in the stores at least 30 days before the movie comes out because that’s when most movie theaters advertise the release of it. Recently, we bought several nice pieces for Shrek 2, which will be hitting the stores soon.”
Ins and Outs. “We do a great job of finding really odd stuff that you won’t find in our competitors,” says Hay. “Companies like Boston America did Care Bear mints in tins for us — we sold hundreds of thousands of those. We’re constantly looking for something unique.”
Family Pack. “Ghirardelli did a great job of coming into our market,” begins Hay. “We put out the changemakers — but then we tried the bags. We had the bars, but we changed over to the bags, because we’re always trying to go for that concession size. Well, that 5.8-ounce bag, we think is like a family pack. We tested it, and it’s doing real well.”
Ethnic Candy. “We’ve designated 400 stores as Hispanic market stores — that’s our new focus market, especially with the four stores near Mexico City,” says Hay. “So we’re going to try some ethnic candy in these markets and see how we do. But we are always looking at demographics and giving our stores leeway. If one store does not do well with sour candy or novelty candy, we’ll go back and re-plan-o-gram it. We won’t hold any store to candy it can’t sell.”
The modest Hay is reluctant to take full credit for the success of candy in Movie Gallery outlets.
He praises director of concessions, Amanda Lay, for her role in handling all product placements and working with candy vendors on new products. Lay also handles all store-level issues that relate to concessions.
Candy distributor Coast to Coast plays a strong supporting role as well. “We would have very little or no success if our stores did not receive the candy orders and other concession products in a timely manner and in good condition,” says Hay.