him! has just spoken to 3,350 independent retailers and 2,500 independent caterers while they are shopping at cash and carries throughout the UK to understand their change in shopping behaviours due to the recession, but also why they go to a specific cash and carry, what they are buying and why they are buying what they are buying.
== Changes in shopping behaviour ==
The recession is changing shopping habits, we know shoppers are being more cautious with their spending and visiting shops, pubs and restaurants less frequently and spending less while they are there.
This of course affects independent retailers and caterers who may be seeing sales in decline or even if they are not, they won’t want to have too much money tied up in stock.
So it is easy to understand why retailers and caterers like the flexibility of shopping in a cash and carry.
Both retailers and caterers shopping in the cash and carry tell him! that they are now sourcing less of their goods from delivered wholesalers than a year ago. They also say that they are going to source less from delivered wholesalers in the future.
Cash and carries are appealing as they have long opening hours, retailers and caterers can buy only what they need/ can afford at the time and they can buy it when they need it with no lag or lead time.
== Frequency of visit ==
And this it seems is exactly what is happening in cash and carries.
Customer visit frequency to cash and carries has increased in the last 12 months by both caterers (from 1.5 to 1.7 trips per week) and retailers (2.8 to 3.2 trips per week).
him! has seen an increase in retailers and caterers saying that they are there to “buy items they have run out of urgently” (see graph 1 below) so they are leaving stocking up until the last minute perhaps when they have available cash flow.
You have expected that average trip spend by retailers and caterers would be in decline but him!’s cash and carry survey shows that average trip spend is actually about 5% higher in 2009 than it was in 2008. However food inflation will clearly be a contributor to this sales growth.
== Impulse Purchasing ==
You may have thought that money would be tight for retailers and caterers and therefore they would only be buying what they needed. But for retailers this is not the case when it comes to buying on impulse. Graph 2 shows the percentage has increased in the last 12 months.
We can see the major drivers for these impulse purchases in graph 3 Promotions have a big part to play, but “it was a good price” and “the display caught my eye” are also mentioned highly.
== Promotional activity ==
With 34% of independent retailers saying that they are now shopping around for the best deal, is it any wonder then that more retailers say that they know about promotions before going to the depot.
How? Well 35% say they have picked up a leaflet while they are in cash and carry, 31% of retailers say that they have read a leaflet from the cash and carry which has been delivered to their door and 23% of retailers say that they have read a leaflet from a supplier – so the message is cutting through.
Nearly half of retailers knew the item which they bought, was on promotion before buying it and 59% said that a promotion did encourage them to buy an additional item which they were not attending to buy.
In 2009 there are also more retailers and caterers intending to buy promotions while they are at the cash and carry. The number of items actually being bought on promotion, shown in graph 4, has also increased since 2008.
Retailers are mainly buying soft drinks, confectionery and beer on promotion, while caterers are mainly buying soft drinks and beers, wines and spirits on promotion.
== Beating the recession ==
Clearly the recession is front of retailers’ minds. They say that they are worried about customers spending less in their stores so they are passing on savings made from promotions to their customers. One third of retailers say that they are now offering more promotions including price-marked packs in their stores.
Retailers tell him! they want information and support from cash and carries, and also from manufacturers, on how to grow sales. They like the message to be simple “give it to me in profit on return (POR) and in pounds”.
Caterers say that they are adding “value for money” for their customers by offering great customer service and great quality of products as well as offering low cost options. Graph 5 shows that 12% of caterers say that they would like more information on menu and recipe ideas, and general business advice.
== So what do these findings mean for cash and carries? ==
Well there should be an urgency to promote more than ever your benefits such as opening hours, car parking, accessibility, speed of service, advice and support and additional services which you offer customers such as delivery and recycling.
If promotions are driving footfall and impulse purchases then it would be crazy not to understand what triggers the uplifts (him! can help) and have enough stock of key promotional lines.
Work on building loyalty with new and existing customers by providing a comprehensive guide to beating the recession. Offer customers with information and advice on how to grow sales, menu ideas and keep the message simple we know that retailers want to be talked to Profit On Return.