Shoppers rely on their local convenience store for a lot these days, so if you get the basics right the sales should follow, as Matt Chittock points out
Convenience stores are no longer seen as the last resort for picking up a pint of milk or a paper on a Bank Holiday when the supermarket is closed. Today they’re often the first choice for shoppers seeking out everyday essentials.
Georgina Wild from HIM research and consulting explains that this professionalism means there’s plenty of opportunity to boost sales if retailers focus on getting their basic product lines right. “The convenience market is outpacing the growth rate of supermarkets,” she says. “However, this trend raises expectations in the minds of consumers. They won’t tolerate out of stocks, particularly in staple products such as milk and bread. So c-stores need to focus on delivering the everyday essentials in order to satisfy customers’ needs. If stores continue to deliver against these needs then customers will keep topping up locally.”
So what are the key basket essentials? In short, it depends what kind of a c-store you are.
“The essentials will be based on store type, location, the types of customers and their shopping missions,” says Spar UK head of marketing Adam Margolin. “Retailers just need to understand their target market and adapt their range to maximise sales.”
Top tips: Display hints
Bread merchandising advice from Warburtons category director Martin Garlick
- Make sure you make room for white. About two-thirds of convenience bread sales are from white bread, so allocate enough space for it and maintain availability throughout the day
- According to AC Nielsen, the bakery occasions category (covering breakfast, tea break, meal accompaniments and sandwich alternatives) is worth £38m in impulse. Stock a variety of products, such as Warburtons toasting muffins, to encourage additional impulse purchases
- Make sure customers can see your offer clearly and use clear signposting. Bakery should be in a prominent location such as at the front of the store or near the milk chillers
- Block merchandise similar products together such as traditional breakfast products and ‘treat’ breakfast products
- Encourage browsing and impulse purchases with occasion-focused pos material and signage.
It will be no surprise to learn that, according to HIM, milk and bread are the most commonly purchased items for shoppers on a top-up mission. But Wild questions whether c-stores are really giving these key products the attention they deserve.
“It is important that retailers treat bread and milk in the same way as other categories in terms of theatre, excitement, attention and management,” she says.
“Too often we hear that ‘milk is milk’ and ‘bread is bread’ nothing could be further from the truth: both categories are among the jewels in retailers’ crowns.”
The experts say that milk and bread are valuable because shoppers are more likely to put other products in their baskets alongside their main purchase.
For example, the latest HIM Convenience Tracking Programme findings show that milk shoppers spend about £6.50 per trip that’s £1.28 more than the average person.
To maximise this market, retailers have to keep their stock levels fully topped up. As Nisa-Today’s business manager Paul Batchelor points out: “Milk should be available whenever the store is open, irrespective of time of day.”
But retailers have to balance availability with freshness. Wild says that one of the biggest turn-offs for customers is milk with five-day’s life placed right next to stock that’s due to go out of date the next day. That’s why she recommends taking a “fluent and consistently managed” approach to stock rotation.
To help retailers out, Robert Wiseman Dairies has launched an On the Hour, Every Hour initiative to focus attention on the chiller cabinet.
“The ‘On the Hour, Every Hour’ mantra will encourage store staff to complete hourly checks to ensure that the milk fixture is being maintained to maximise the store’s milk sales,” says Wiseman sales and marketing director Sandy Wilkie.
For stores participating in the initiative, Wiseman has developed a clock which moos every 60-minutes as a reminder to store staff to complete essential freshness checks.
Bread also requires careful stock management, says Batchelor. “A daily delivery direct from the supplier is without question the best solution for bread,” he says.
“However, it is still important to ensure accurate stock and order records are maintained in order that sales peaks can be identified and out of stocks do not materialise.”
To help retailers capitalise on the wrapped bakery category, which is worth £356m in the convenience channel according to Nielsen, Warburtons is now offering Sunday deliveries to ensure stock levels are maintained seven days a week.
“It is very important to have a wide range of products in stock to meet the basic needs of consumers, but also to get them to increase their basket size by tempting them into other bakery sectors,” says Warburtons category director Martin Garlick.
For example, a consumer may come in to buy a Warburtons 800g Toastie Thick Sliced Loaf, a top five favourite within convenience, but see Warburtons Sliced White Rolls or Toasting Muffins and decide to increase their spend. Retailers should also use epos and sales records to review what sells and base decisions on that data.”
Another good way to increase spend is to stock the perfect products to complement a customer’s loaf of bread and like all basket essentials this means pinpointing your customers’ particular needs. For instance, data supplied by Premier Foods shows the peanut butter category is worth £40m in the UK.
So if your customers are mainly busy mums looking for easy breakfast or lunch options, then Sun Pat’s relaunched range could be one to try. For adventurous retailers with an urban, health-conscious demographic, the Whole Earth range of Organic Peanut Butters might have more appeal.
It’s worth looking out for new twists on existing favourites, too. According to Nielsen, the UK’s bean accompaniment market is worth £337m, with Heinz leading the way. Heinz’ new resealable fridge packs released earlier this year promise a fresh take on a classic c-store essential.
Elsewhere, there’s growing evidence to suggest that c-stores can cash in on fresh fruit and vegetables. In fact, research shows that retailers who don’t get their five-a-day out on the shelves may be missing out.
“Some 63% of shoppers tell HIM they would buy fresh fruit and vegetables from a convenience store, but only 10% actually do so. Therefore a huge opportunity exists if you have the right offer in store,” says Wild.
As cooking from scratch becomes more popular, and shoppers become increasingly aware of healthy eating, there’s also potential for the category to grow. And retailers already have a headstart since, according to HIM, most c-store shoppers already believe that the quality of fruit and veg sold in c-stores is comparable to that found in the supermarket aisles.
Wild suggests adding credibility to your range by merchandising fresh produce in wicker baskets or wooden crates to create an authentic ‘grocers’ feel or displaying fruit on the counter to tempt the 6% of c-store shoppers for whom fruit is an impulse purchase.
That’s the percentage of shoppers who believe product availability is the most important issue for a c-store (HIM CTP, June 2010)
Stocking local produce can also mark a point of difference, depending on the store’s demographic. And it’s a trend being adopted by producers of essential goods such as Wiseman, which has launched product labelling that highlights the source of its milk, from the West Country to Scotland.
Wilkie says: “Research tells us that consumers are actively looking to buy local produce which explains where the product has been sourced. However, they want this without paying any more for it they want value and values.
“The convenience sector is increasingly focusing on the provenance and sourcing of its products, and our regional labels help to satisfy this consumer-led demand in the market.”
Once you’ve honed your range of store essentials you’d be forgiven for thinking that merchandising them to best effect would be simple. But, as Margolin explains, sometimes what retailers think is ‘common sense’ doesn’t necessarily work on the shop floor.
“Most people assume that the best area for product placement is at eye level,” he says. “However, the natural gaze is in the range of 15 to to 30 degrees downward. So goods placed above this level get very little attention.”
“Often, the way stores are laid out bears very little relationship to the way people shop,” he adds.
“Shoppers often don’t notice much until after about three metres into each section and are already leaving the aisle well before the end of the shelves and displays. The better location is in the middle section of the aisle.”
Of course, however you merchandise, many basket essentials are exactly the products that supermarkets are likely to heavily discount. But for successful c-stores this needn’t be a problem.
“Multiples slashing prices isn’t a huge issue because the primary reason for convenience shopping is proximity to store,” says Margolin.
“Nevertheless, retailers should find ways of adding value beyond price like providing good service.” And that’s another essential that should never be in short supply.
Ones to watch…
A bigger bite
Customers seeking out a bit more bite from their basket essentials will welcome the thicker cut of Hovis Doorstep. The brand is the new name for Hovis Extra Thick and features a purple label for maximum shelf appeal.
tel: 01727 815850
For many c-stores, stocking peanut butter alongside bread is a no-brainer. And for retailers looking to update their range, Sun-Pat has relaunched with a new-look pack and lightweight packaging.
tel: 01727 815850
Basket essentials don’t just have to be based around food. Stocking paper products such as Plenty, which has a 20.1% value share of the category, can help retailers clean up if they have room to spare.
rrp: £2.99 six-pack
tel: 0161 8743000
If you’re investing in fresh food it pays to get your cooking oil offer perfect. One in 10 households buy Crisp ‘n Dry, and a new promotion aims to position it as a cooking option beyond the humble chip.
tel: 0151 236 9282
Pass the ketchup
Since the UK tomato ketchup market is valued at £163m it makes sense for retailers to get saucy. And according to research from Nielsen, there’s one brand that 75% of shoppers always stick to: Heinz.
tel: 020 8573 7757