Forget trying to compete with the multiples on homecare, advises Russell Goldman, buying director at wholesaler and distributor Rayburn. He suggests concentrating on being indispensable to customers instead and putting your own stamp on offers.

The past five years have seen convenience retailers go after the fast-growing fresh and food-to-go markets like never before. It’s transformed shop floors across the country, with some stores now looking more like upmarket delis than corner shops.

There’s no doubt it’s been a serious earner, but are we now focusing so much on sandwiches and slices that we could be missing a trick much closer to home?

Stuart Cordner, owner of Spar Comber Road in Dundonald, County Down, believes so. “In convenience retail the focus has been on fresh foods for a long time now. And that definitely works for some stores, don’t get me wrong,” he explains. “But household has been forgotten along the way. It’s a huge category and I don’t think people understand enough about it. Household is a massive, untapped opportunity that I’d urge all retailers to go after.”

Stuart says that he began to unlock the potential of household when analysing the demographics of his local area. “Our team are all customer-obsessed – it’s what drives us,” he says. “We’re always looking for an opportunity to spot a category others aren’t doing well in. The environment around us is very much rental properties and new housing. And what we found is that the people from the new houses were looking for tea towels, cups, bin bags, kitchen roll and washing-up liquids.”

In response Stuart now stocks a wide-ranging selection of household essentials that goes much further than the average c-store. For example, alongside the usual toilet cleaner and tissues, he’s also invested in a key-cutting machine.

“We’ve been seeing the downsizing of B&Q and the old ‘open all hours’-style stores around here for some time,” he says. “Because of this, those customers in the rental accommodation would have to go five miles just to get a key cut. It makes sense to provide that service for them.”

This customer-first philosophy also guides the general cleaning products. Rather than just stocking the core offer, he also has an eye on additional accessories shoppers might need, too.

“For example, as well as doing the floor cleaner we also do the mop and the bucket,” he says. “It all helps us to become a one-stop shop where customers know they can find everything they need and won’t have to go anywhere else.”

Stocking such a diverse selection isn’t without its issues. Stuart says that he’s had to negotiate hard with different suppliers to get the range he wants. “The challenge I have is that one single supplier can’t give me the full range,” he says.

“I had to shop between different suppliers just to make that category robust enough and give people what they really want.”

Andrex has worked to ensure people attribute greater value to the toilet tissue category and this has unlocked growth potential. Andrex Washlets have helped drive the fast-growing moist toilet tissue segment, as more consumers see the benefits of achieving an elevated standard of clean. The brand says this is an underpenetrated part of the category that offers huge opportunities for convenience retailers.

Spring clean the category

The home care category has been challenging over the past year, with volume flat to declining and value eroding, reports Sandeep Hegde, director for convenience, wholesale and club channel at P&G.

He adds: “We continue to see a change in the way people shop, with trips segmenting further and volume continuing to proliferate across all retailer channels. With too much choice across sizes and variants, shoppers are faced with confusion as to which products really offer them good value for money.”

To capture more sales, he suggests simplifying the category for customers – and offering more product information. Value matters too, so P&G has introduced a new price for its Flash task sprays PMP – now down to £1.99 from £2.25.

“The decision was taken to reduce the pricemark on this best-selling SKU following feedback from convenience retailers that they wanted to drive customer loyalty by offering good value for money,” says Hegde.

As well as price, visibility is also vital. “An important aspect for P&G is simplifying the range and range priorities – to focus on best-selling SKUs within each category, that deliver the best-in-use experience further reassured by the strength of the brands,” says Hegde.

“Home care shoppers are often on a cleaning mission, so it is a good idea to locate these goods near laundry. As the category is fairly complex, it pays to group products by room (for example, kitchen and bathroom) and by product task (for example, dishes and surfaces). This allows customers to find what they want easily.”

For more P&G merchandising advice, see www.shelfhelp.co.uk.

 

 

However big you go with household, one thing’s for sure – it’s an increasingly competitive market out there. Mintel points out that core customers often head to the discounters to stock up, or cash in with online bulk buys.

Even the multiples aren’t immune to the Aldi/Amazon effect. According to Kantar, the big four make up 62% of household category sales, and that stat is declining year on year as shoppers switch to outlets they see as better value.

This makes it tough to get the volume, and margins, c-stores need to clean up. So how can retailers fight back? According to Kantar, 42% of household-seeking customers shop the category on impulse. That means the challenge for convenience is to get them in front of the category, and then seal the deal with the right offer.

Dennis Williams, from Premier Broadway Convenience Store in Edinburgh, says that offering bigger pack sizes is a great way to signpost value to price-sensitive shoppers.

“Right across the board we’ve seen that the bigger packs do best in the household category,” he says. “So you have the 45-wash Surf and the 21-wash Comfort. People want to see those bigger sizes, because it gives them that bit more value for their baskets.

“The supermarkets have been going down this route for ages, and it’s now what customers expect to see on convenience store shelves. These days, c-stores can get most of these sizes direct from suppliers.”

The same goes at Steph Latham’s Spar store in Preston, where she says that in household, customers often save their pennies until there’s a big promotion.

“Right now we’ve got the 90-wash Surf on for £9,” she says. “It’s one of those things that people will definitely buy on promotion. When you think about it there’s no best-before date for them to worry about, so people can put it in the cupboard and use it when they need it.”

Of course, since space is always at a premium in convenience, stocking bigger packs can mean cutting other lucrative lines. Yet Dennis says that it’s crucial to give shoppers exactly what they want.

Dennis dedicates a solid six metres to category and notes that PMPs are important within that. “If you look at the category now, pretty much everything has a PMP, which again makes the customer feel good about buying it. They feel they’re getting more of a bargain.”

Larger rolls satisfy shoppers’ search for value

Adam Gray, trade marketing manager at Intertissue – the owner of the Regina household towel range – points out that larger roll formats will continue to be the main driver for growth in the category. But for the convenience retailer, where shelf space 
is a key constraint, this can be a challenge.

“The Regina strategy to meet this need is to keep the focus on what the consumer is looking for from the convenience sector – ultimately, good-value products which meet their needs in a given moment. Good value in this instance doesn’t necessarily mean the cheapest product, but products which provide the best possible quality at an acceptable price.

“The Regina household towel range can give retailers a higher revenue from a smaller shelf area, helping to grow profits while also keeping shoppers coming back to repeat purchase products that they trust and rely upon.”

He explains that there are two higher sales periods for kitchen towel: one for the spring clean period; and another for Christmas. But he adds: “We are seeing growth in the category, which suggests kitchen towel is becoming a staple purchase in consumers shopping habits.

“With toilet tissue, simplicity is the main growth driver. Standard or quilted white products are the growth drivers, while decorated, coloured and lotion products are dropping off.”

The household category is dominated by the big brands. But Stuart says that there’s still plenty of room for private label as well.

“In all the core range, such as detergents, we’ll have the proprietary brand that people ask for, alongside the Spar brand,” he says. “We’re making excellent margins on them and customers like them because they’re a bit cheaper.”

Household may be a year-round category, but Steph says that it’s in the pre-spring period that people start to stock up. “The disposable Flash Wipes always do very well for us around this time. It’s the fact that you don’t need to mess around with cloths, water and cleaner. People think they’re really handy.”

If Mintel is correct, in the future we’ll see even more of a shift towards the discounters and online in the household category. Yet, c-stores have two selling points even Amazon and Aldi can’t compete with: proximity and the potential to deliver a positive customer experience.

So, if retailers can get the category right, it opens the doors to scores of additional sales day in and day out.