FMCG manufacturers should look to the convenience sector to boost sales in the snow, says Linda Horton, data manager at SalesOut.
As the big freeze has spread across the entirety of Britain, heavy snowfall and freezing temperatures have ground many areas of the country to a halt. Inevitably, the widespread snow, sleet and ice have caused chaos and disruption, as many of the UK’s roads have ground to a standstill or are simply impassable.
As the cold snap continues to tighten its grip on the country, convenience stores will undoubtedly play a significant part in helping to reduce the extent of the commotion, as many consumers will opt to walk to their local store to stock up on supplies rather than venture out onto the treacherous roads in order to shop at the further afield supermarkets.
If the weather continues to be as severe as it was in the run up to Christmas 2009 and much of January 2010, larger retailers may choose to close early or even make the decision to shut up shop completely throughout the disruption, leaving independent retailers to meet the increasing demands of the marketplace. If independent retailers manage to successfully rise to the challenge of fulfilling the needs of customers this winter, they will duly reap the rewards.
However, many of the UK’s renowned grocery brands are unable to take full advantage of this profitable opportunity, as they place less emphasis on the convenience store route to market. Instead, FMCG manufacturers continue to consider supermarkets to be their most productive channel even though this is not necessarily the case, as the returns from these multiples has continued to diminish over time. Due to the uncertainty of the economic climate, the significance of Own Brands has become more prominent within the marketplace, resulting in supermarkets persistently focusing their efforts and attention on promoting their own brands at the expense of supplier branded products.
It is crucial for independent retailers to examine the change in consumer, economic and merchandise trends all year round, and the severe weather conditions during the winter period certainly give convenience stores the opportunity to encourage customers to shop locally and more frequently by ensuring that the shelves are adequately stocked with a good range of daily essentials, especially bread, milk, soup, frozen ready meals, canned goods and beverages. The increase in footfall for convenience stores over the icy months plays a key part in an attempt to alter the shopping habits of customers, ensuring that they become regular shoppers.
It could therefore be argued that the adverse weather conditions provide the perfect opportunity for FMCG manufacturers to influence the convenience store market. However, this requires FMCG brands to gain a much greater understanding of the performance of shopping patterns and product sales in this sector, whether this is by category, brand, range, region or SKU performance, and to work more closely and productively with the wholesale sector to leverage a significant growth opportunity.
With more insight and focus on this sector, a white Christmas could provide FMCG manufacturers with their biggest opportunity to deliver a strong return on investment through the convenience sector, creating closer bonds between retailer, supplier and manufacturer ahead of the 4th January VAT hike, which is sure to put a strain on even the strongest commercial relationships.