Availability still a concern

Customers’ perceptions of cash and carries have improved in a number of significant areas, according to the 2005 C C Customer Tracking Programme. During June more than 4,000 independent retailers were interviewed by him! across branches of 15 cash and carry operators including Booker, Batleys, Bestway, Parfetts, AF Blakemore, BA, Bellevue, United Wholesale, Dhamecha and other Today’s members.

They found that customer satisfaction levels had increased over last year’s scores on prices, promotions and speed of service, but availability ratings had not improved.

Twenty six per cent of customers said they failed to buy an intended item at the depot that day with out of stock given as the overwhelming reason. Confectionery was the category that lost most sales because of out of stocks, according to retailers.
Tom Fender, chief operating officer of him! suggested cash and carries should follow the lead of some c-store chains which now offer availability guarantees on key lines.

He said: “Could a cash and carry guarantee availability over its top 100 lines? It would give a strongly positive message to customers and internally. It would focus the industry to move to a higher gear to improve availabilities.”

Another positive finding from the survey was that far more retailers said they were passing on promotional savings to their customers. Forty five per cent of retailers said they had bought something on promotion at the cash and carry on that day, with soft drinks, beers and crisps and snacks the top purchased items on promotion. However, 63% of retailers said they always or often pass on promotional savings to their customers compared with 40% a year ago.

SALES DEVELOPMENT
In spite of predictions by some industry analysts that many unaffiliated retailers would seek to join a symbol group to cope with the intensely competitive market, very few said they would. Only 5%, the same figure as in 2003 and 2004, said they planned to join a symbol group over the next 12 months.

Retailers said they appreciate advice from suppliers or manufacturers, but they turn to cash and carries first for information, and half said they had visited their cash and carry’s web site in the last month looking for product and general information.

Fender suggested that there could be an opportunity for cash and carries to organise workshops for their customers at their branches and to provide more advice for retailers. He said: “Cash and carries need to be more sales development partners with their customers. They need to crank up their sales development communication and perhaps ease back on promotional communications.”

Most retailers said they were visiting their cash and carry to top up, including 16% who were members of a symbol group. Fender said there appeared to be a little and often philosophy, possibly to ease any strain on cashflow, and suggested cash and carries needed to give more consideration to top-up customers in terms of their merchandising.

More retailers were stocking chilled foods and produce (fruit and vegetables) compared with the previous year, but Fender said more still needed to be done to communicate the importance of fresh and chilled to retailers. He said evidence from him!’s Convenience Tracking Programme, which looks at shopper behaviour in c-stores, showed the importance shoppers attached to fresh and chilled.

“Stocking fresh and chilled drives footfall, attracts more high-spending women customers, results in incremental purchases and improves customer loyalty,” he said. He also pointed out that it tends to provide retailers with higher margins than most other categories.

* Harris International Marketing, the consultancy which carried out the Cash and Carry Customer Tracking Programme looking at customers behaviour in depots, has been rebranded as him! with the new logo also appearing in a speech bubble to highlight the need for better communication and the added strapline of “turning answers into action”.

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