Are promotions harming sales?

With 41% of visitors to cash and carries buying crisps and snacks the category is the fifth best selling in depot. So what’s the appeal?

A review of the offers that were available across some of the leading operators in the week commencing March 27 demonstrates a clear attraction.

Offers included: Mini Cheddars, buy one case, get one half price; McCoys Specials, two for a reduced price; McCoys Specials, shipper deal; Wotsits, buy any two cases and get Quavers free; Hula Hoops, buy any two and get the third free; Space Invaders, buy any two get the third free; Pringles, temporary price reduction; and Walkers – a text promotion offering the chance to win a supply of crisps for the year to the value of pound;10,000.

It seems that the manufacturers are in a constant battle to win the retailers’ spend. Good for the retailer and consumer, if passed on, but is it good for the category or do continual offers create an inconsistent offer for the shopper because retailers are switching SKUs so often?

According to the results from HIM’s Cash and Carry Tracking Programme, 38% of retailers stated that crisps and snacks will drive sales growth this year, on a par with beer and confectionery.

And to back this optimism up, 39% of retailers put crisps and snacks in their top three most profitable categories in the entire store.

With continual offers available to retailers, loyalty will be hard to come by for operators, says Jonathan Rons, C C project director at HIM. He adds that 40% of crisp and snack shoppers also source product from delivered wholesale, probably because of the bulk of the item, and 62% admit to deal shopping for this category across different operators.

Crisp and snacks customers are valuable. The programme shows that while they visit slightly less frequently than average, they spend considerably more when at depot ( pound;1,195 versus pound;918 – 30% more), so gaining the loyalty of this customer could have a very positive effect.

There is also a step change in production methods to align with a growing consumer need for healthier snacks. When questioned about health 50% of retailers stated that there is more demand for healthier snacks than 12 months ago. Manufacturers have reacted to this with examples such as Walkers launching products with 70% less saturated fat by cooking with sunseed oil, and United Biscuits’ Hula Hoops now having 50% less saturated fat. These can only be good for consumers who are continually bombarded in the press about the state of our diets and shows the manufacturers are responding to consumer trends. This may even invigorate a category that has seen decline in recent years.

Other factors for retailers to consider this year are the effects of events like the World Cup. Sharing bags such as Doritos, Sensations, Pringles and McCoys Specials will inevitably be backed by some strong marketing.

There will be a heavier demand and operators should be prepared as failed purchases are still occurring at depot. Seven per cent of retailers arriving intending to buy crisps and snacks failed to do so. The primary reason for this was availability. The tracking programme also shows that confectionery, soft drinks and cigarettes are the three top cross purchases of the crisp and snacks shopper. This may offer the operators an opportunity to take a less regimented approach to adjacencies and place products which already have cross affiliation next to each other.

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