Christian Retailers Hammered By Price-Cutting Giants (Wal-Mart, Costco, Target)

By Mya Frazier
Ad Age

COLUMBUS, Ohio (AdAge.com) -- Much the same as they have done to mom-and-pop stores and middle-size chains from coast to coast, America's retail Goliaths led by Wal-Mart, Costco and Target have seized market share from the country's organized Christian retailers.

Retailer conference
At this week's International Christian Retail Show in Denver,store operators bemoaned their continuing drop in market share in a $4.3 billion-a-year category covering everything from Bibles and crucifixes to choir robes and religious-themed DVDs. The show was organized by the Colorado Springs-based Christian Booksellers Association (CBA).

One major point of discussion among the merchandising faithful gathered in Denver was that their share of a market they once solidly owned has slipped another four percentage points to 53% since 2002.

Price cutting
Show attendee Chris Childers, who runs a Christian Bookstore in Macon, Ga., is typical. His shop now competes with a nearby Sam’s Club, Target and Wal-Mart. Sales are down 3% this year and, although he expects to break even with last year’s sales of $1.8 million, his profits are down. For instance, when The Passion of the Christ DVD was released at a $26.99 retail price last year, he sold it for $19.99. But Wal-Mart cut the price for the same DVD to $17.97

The buying power of the mega-retailers makes the economics tough for merchants as well as their suppliers. Consider that the majority of CBA members have sales of $125,000 or less. And although Christian retail has its own chains, including LifeWay Christian Stores, with 123 locations, the largest, Family Christian Stores, has only 320 locations.

Fighting back
Another major discussion point at the show focused on how best to fight back against the encroachment of secular retailers.

Bill Anderson, the CBA's president-CEO, said the situation has prompted a change in both the name of the event and an expansion of its programs to draw a wider group of participants. The annual conference, which was previously called the Christian Book Sellers Trade Show, became the International Christian Retail Show this year.

More educational business seminars were added. Worship services were beefed up in keeping with the organization's new strategy of stressing the importance of "buying Christian," and the overall programming has been enhanced with the higher-profile inclusion of well-known Christian writers, such as Stormie Omartian, author of The Power of a Praying Woman, who gave one of the keynote addresses.

'Buy Christian'
It’s not the first time the CBA has tried to coalesce its members around a "Buy Christian" concept. Six years ago, CBA created the “What Goes Into the Mind, Comes Out in a Life” program to consolidate funds from CBA retailers and create a national campaign promoting its members stores.

In April, the CBA launched a series of TV spots encouraging Christians to shop at Christian stores on the Christian Broadcasting Network as well as the ABC Family Channel. CBN created the spots and CBA and suppliers kicked in money to support the multi-million dollar campaign, scheduled to run again the third and fourth quarter of 2005 to capitalize on the holiday season.

CBA members are increasingly concerned with the ease with which the giant secular retailers have expanded their religious merchandise offerings, Mr. Anderson said. Although he conceded that “to think that Christians will shop us only because we are a Christian store is an unrealistic expectation,” he admitted he expected a little more from the category’s suppliers, mostly private, independent businesses also owned by Christians.

“Our message to them is we helped to grow your business,” Mr. Anderson said. “It’s in your best interest to create a channel management strategy to take advantage of this market and yet to respect the history and the growth gained through Christian stores.”