DINNER AND A MOVIE GROCERS AIM FOR SIZZLING DVD MARKET.

Byline: Greg Hernandez Staff Writer

DVD versions of movies such as ``Gangs of New York,'' ``About Schmidt'' and ``Die Another Day'' are sharing space in shopping baskets with groceries as supermarkets get back into the home-video business to cash in on the DVD boom.

Leading the trend are a number of Albertsons stores that have full-scale video shops with shelves stocked with new releases for rent and kiosks with both VHS and DVD versions of the films for sale.

``Supermarkets in the past 12 months have really gotten into the business, and I expect that number to increase,'' said Judith McCourt, director of market research for Video Store magazine, an industry trade publication. ``DVDs are such an easy item for customers to carry and easy for stores to display. They are a highly merchandisable item and a great spur-of-the-moment purchase.''

``What it's doing is tapping into a market that might have forgotten how interesting it might be to buy a movie,'' McCourt added.

With DVD players hitting 50 million U.S. households this year, an increasing number of people are buying DVDs. A few years ago, it seemed that supermarkets had given up on the home-video scene, which had grown somewhat flat.

``They left it in the pre-DVD days, late in the VHS game,'' said Bob Chapek, president of the DVD Entertainment Group. ``Now with all the growth in DVDs, supermarkets are getting back into selling movies.''

The Ralphs chain, which has 320 stores in Southern California, said this week that it has no plans to open separate video stores but has embraced selling DVDs.

``We have been increasing the amount that we carry and are promoting the new releases,'' said Ralphs spokesman Terry O'Neil. ``It's working well.''

Ralphs is focusing on new releases, which are featured prominently near the checkout lines during their first week of release and are usually promoted in the chain's newspaper advertisements.

``What we have discovered is that the first week a DVD is released it sells a lot, then sales go down significantly,'' O'Neil said. ``If they can get the new release at the same time they do their grocery shopping, it makes for us.''

Albertsons stores that don't have separate video sections do have a beefed-up selection of titles near the check stand with newest releases featured prominently.

While VHS is still popular with some people, the format has lost its edge in the home-video industry with DVD likely to account for 70 percent of the industry's retail revenue this year.

A key force behind the growth is the fact the average DVD household buys about 15 DVD titles per year, more than twice the number of VHS purchases. Also, a majority of DVD consumers have shown they are buying more DVDs now than when they first bought their players, according to research by the DVD Entertainment Group, an industry trade association.

The home-video industry sees supermarkets as a lucrative spot, especially when it comes to children's titles.

``I think they are the latest in nonfat snacks for children,'' McCourt said. ``Children watch the same video 20, 30 times without tiring. And the nice thing about DVD is that with all the extended hours of entertainment, there are so many other things to see and do besides the movie.''

The supermarkets often sell the new releases at prices - usually around $20 - that compete with such retail chains as Wal-Mart and Target.

An Albertsons in Reseda boasts more than 800 titles and currently charges $1.49 per rental, which can be kept for three days and two nights. Such new releases as ``Catch Me If You Can,'' ``Old School,'' ``Just Married,'' ``Two Weeks Notice'' and ``The Recruit'' fill the shelves.

Similar to the popular Netflix rental service, the store is offering a membership deal in which customers pay $19.99 per month for an unlimited number of rentals, with a limit of two films rented at a time.

Reseda resident Barbara Rae was scouring the store recently, looking for a VHS version of ``The Pianist.'' While the store only had a DVD version of the film, Rae was delighted at the prospect of being able to combine her grocery shopping with her video renting.

``I think this will probably do very well as long as they have enough copies,'' Rae said as she scanned the shelves for an alternate selection. ``I think it's a good idea to have it right now, as long as the prices don't get too ridiculous.''

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com

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2 photos

Photo:

(1 -- color) As supermarkets try to cash in on the popularity of DVDs, many Albertsons stores are offering unlimited DVD rentals.

(2 -- color) Promotions for new video releases adorn Helen Sone's register at Albertsons in Reseda.

Tom Mendoza/Staff Photographer