Different Stamping

MERCHANDISING Different Stamping

By many outward signs, the trading-stamp business was never better. Stamp distributions in supermarkets, service stations and other retail outlets last year surpassed $1 billion; the Trading Stamp Institute, which represents most of the important companies in a field of 200 and speaks for all, predicts that business will increase this year by 5% to 7% .

The what-stamps-can-do tales still make feature stories: a Detroit Roman Catholic parish last week cashed in stamps to buy a station wagon for its nuns; the Thomas Dooley Foundation is saving for a light airplane for medical use in Laos; even Elijah Muhammad's Black Muslims are collecting stamps for a school bus to be used at the University of Islam in Chicago.

But there are quite a few indications that the trading-stamp industry is running into difficulties. Last year 500 grocery stores of various sizes dropped stamps, promised lower prices instead. Last week Sperry & Hutchinson Co., whose Green Stamps account for one third of the industry's business, issued a prospectus required before it can sell 1,000,000 shares of stock and seek eventual representation on the New York Stock Exchange. Opening its books for the first time in 70 years, S & H President William S. Beinecke reported that its sales--$330 million last year--are higher than ever; but the figures also showed a discouragingly slow rate of increase. With 35 million families pasting up S & H Stamps, the average redemption is still for only 2 1/2 books v. 1 1/2 books 15 years ago.

Supermarkets continue to be S & H's most important customers, represent 61.6% of its total sales. With the supermarket market about saturated, the company, like its competitors, is turning elsewhere. One important new source is the use of stamps by major corporations as incentives for salesmanship or rewards for suggestions or promptness. S & H's sales in that area have quintupled in four years, now account for $9,300,000 annual income; the stamp company so far has 3,500 incentive customers, including well-known corporations such as G.M., Sylvania Electric and Miller Brewing. Another possible market is in nations abroad, where stamps have not yet proliferated as they have in the U.S. The going there may be tough. King Korn Stamps, the sixth largest trading-stamp company, recently retreated from England after an unsuccessful effort. S & H in last week's prospectus admitted that a campaign to Interest Englishmen has so far lost the company $4,200,000.

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