Buyers: Promotions 'stripping' profitability out of biscuits

One of our 10 Things You Need To Know About… Cakes & Biscuits

How would you sum up the past year for cakes & biscuits?

AB: Biscuits continue to go from strength to strength in Spar. Just as impressively, like-for-like sales are ahead of the market with the convenience channel at +1.4% year on year, which shows our customers see real value in our proposition.

Growing at 3.9% in the market, everyday treats are the best performing area within biscuits, as customers look for an indulgent, permissible snack throughout the day. We’ve made great efforts to improve our proposition over the last year to capture these sales, which includes our improved seasonal offer. This segment is now in 12.6% growth within Spar.

How has your cakes & biscuits range changed over the past year?

BS: Food to go is a huge market, with coffee shop specialists having brought this to the forefront of consumers’ minds. Retailers have acknowledged the demand for similar products in stores and, as such, we have developed ranges to match. Going forward, we are interested in looking at the opportunities this presents in conjunction with the coffee offering present in various Spar stores.

AB: Over the last year we’ve seen a lot more versatility in our biscuits range as our larger biscuit suppliers continue to have their fingers in many pies, with a push into crisps & snacks, confectionery and cereal bar categories where they believe they can unlock some incremental growth and profitability. Because of this ‘category blurring’, we are now starting to define biscuits under an all-encompassing umbrella of ‘snacking’ rather than pigeonholing our ranges within strict categories.

Biscuit suppliers are also seeing profitability stripped out of their products with increased promotional and discounter activity, especially in take home/sharing, and in particular everyday biscuits. We’re seeing a strategic move to attempt to improve this profitability through on-the-go packs, which will help to readdress the relationship with weight and value in biscuits.

Growing at 3.9% in the market, everyday treat biscuits are the best performing area within biscuits, as customers look for an indulgent, permissible snack throughout the day, and we’ve made great efforts to improve our proposition over the last year to capture these sales, which includes our improved seasonal offer. This segment is now in 12.6% growth within Spar.

What is your top launch of the past year?

AB: We’ve had immense success with McVitie’s Nibbles, which has really helped to modernise the McVitie’s brand and captured incremental sales through a differing customer mission.

How are you tapping the demand for on-the-go products in this category?

BS: We have teamed up with Premier Foods to run their twin-pack on-the-go slices on a number of promotions. As part of our category review for 2016 we are looking to focus on this area to develop our range under Spar brand.

AB: We are currently enjoying great growth with Belvita breakfast biscuit on-the-go packs where we believe the product really offers a unique customer proposition and eating occasion solution versus traditional countline products. Over the next year Spar will be working on providing the customer with a competitive proposition for on-the-go biscuits that still provides value for money versus larger pack sizes. 

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