Bigger is not always better

Independent retailers say they are going to extend the ranges of beer, confectionery and soft drinks in their stores more than any other categories in the next year (4,000 independent retailers are interviewed face to face each year as part of HIM’s annual Cash Carry Retailer Tracking Programme). That is good news for all suppliers of these key convenience products.

It is obviously great news for wholesalers too – getting even more space in their retailer members’ stores for what are already key categories. In the grander scheme of things, beer and impulse lines are “relatively” easy to manage in branches with no short-life concerns.

CTP (HIM’s Convenience Tracking Programme) tells us that the beer shopper is one of the most frequent shoppers to c-stores, so beer also helps drive footfall. Confectionery attracts more c-sector impulse sales than any other product, and is the top selling department in many oil company forecourt shops. Soft drinks generate good impulse sales, often based on the weather, but particularly when chilled product is made accessible to shoppers in the main fast lane.

But consider for a second. In the last 12 months, how many different soft drink SKUs have you bought personally for your own consumption? How many different chocolate bars have you bought? How many different beer SKUs have you bought? I challenge anyone to come up with more than 10 in any of the three categories. And here lies the problem. Retailers are extending ranges in categories which – frankly – need to be reduced, not extended, if one was to take a shopper and sales optimisation approach.

The problem for wholesalers is that they will, quite understandably, want to respond to their customers’ needs and deliver a wider range in these categories. Added to which, suppliers will continue to push more new products into the trade.

It could be argued that shoppers want this greater variety of products when research we conducted showed that shoppers preferred a wider range of products rather than a smaller range. If you were asked whether you wanted a wider range of wine in an off-licence, a wider range of lunch options on a menu, a wider range of holiday options, wouldn’t you probably say yes? But don’t you still buy the same types of wine, the same things for lunch and go on the same types of holiday each year?

From a wholesaler’s perspective, wider ranges equal complications and complexity. It makes keeping in-stock of products harder. It inevitably leads to a wider influx of promotions and more details and expense on PLOFs. It gives more products for the cash and carry depot manager to worry about. More products for staff to try to become expert in.

Wouldn’t it be better for cash and carries to devote more space in their depots to sales development stands sponsored or manned by suppliers to help engage with retailers?

NPD is important. The only way anyone will discover whether a new product can become “the next big thing” is to list it and back it to the hilt. But surely there’s a balance to be had.

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