For many years wholesalers and independent retailers have been told the saviour of independent retailing was going to be impulse purchases and this concept has become strongly linked to the concept of convenience.
This message was unsurprisingly a constant from many suppliers in soft drinks, snacks and most vociferously confectionery. Grocery ranges were supposed to be cut back remorselessly to essentials, C&Cs re-laid so impulse was located at the front and given disproportionate space. It was all about impulse, alcohol, tobacco and news and big brands were the future, niche brands the past.
Big still has an essential role to play, but we are now beginning to see cracks in the message around impulse. Countline confectionery is the most visible and high profile impulse category - and all the evidence is that consumers are turning to such products when they want to indulge rather than big ticket items.
Why is it, then, that in the wholesale and convenience retail trade countline confectionery is in serious decline? I think suppliers have been bewitched by short-term opportunities and lost sight of the bigger picture - in much the same way as they have crucified the seasonal trade in any outlets other than the multiples. We are training consumers they cannot achieve value in an impulse purchase.
The rsp for a typical countline is between 50p and 60p. However, this weekend I was able to buy full-size multipacks of four units of Toffee Crisp, Kit Kat Chunky, Kit Kat four-finger, Smarties and Picnic for £1 each in Morrisons, Spar and Poundland. Full-size Mars and Snickers are also available in four-packs from Asda at the same price.
The pricing equation has been completely undermined by the need to offer value in multiple retail. Any marketeer understands a modest discount for an upweighted purchase, but a discount of up to 56% is insane and actively distorts the market. Not only are we telling the consumer that the true value of these products is 25p and that they are mugs to pay impulse prices, these prices are also way below the cost price by unit into the wholesaler, leading independents to believe they are being ripped off.
It’s no wonder that commercially savvy schoolboys/girls are now buying these packs and re-selling them singly in the school playground - or that the chocolate confectionery market is under such severe pressure in the convenience sector. I’m sure these suppliers employ some very highly qualified people to advise on such strategies but to a simple grocer they appear to have been suckered and seduced once again by the promise of jam tomorrow by the multiples.
No comments yet