Lifting the lid on C C customers

Many retailers set up their own business because they want to be their own boss, and the findings of the 2008 Cash Carry Retailer Tracking Programme from him! reflect this spirit. Three times more independent retailers want to find out category top sellers as want to receive suggested planograms, which sounds distinctly like: “Tell me what I need to know, don’t tell me what to do – give me the information and I will decide how to use or interpret it.”

Put yourself in the shoes of retailers. They welcome top seller lists (based on actual sales) because they are largely indisputable. But the retailer can receive three very different suggested planograms from three different suppliers all in the same category. They’re confused – who is right? How many planograms circulating around the trade actually go as far as stating: “Implement this planogram and we will guarantee your sales will grow by xx%.” Top sellers are indisputable. Planograms are disputable, in the eyes of retailers.

Using the Internet

Web-based communication with retailers is cost-efficient – that’s why you do it. Three quarters of independent retailers “have access” to the internet. So it makes sense to try to engage with retailers via the internet or email, because it’s widespread and cost-efficient. Unfortunately, what’s efficient isn’t always effective. Only 12% of retailers prefer to receive advice via the internet or online. They much prefer information gained while they are shopping in the cash and carry, or through the post. We last asked this question three years ago – virtually nothing has changed. So while the world goes internet crazy, still the vast majority of retail sales take place in shops and traditional retailers like traditional communication methods. “Word of mouth” is one of the biggest influences when thinking about stocking new lines. Three years ago retailers wanted to see supplier reps in cash and carry branches. Today is no different. It costs more than web-based marketing, but we suggest the returns will be greater.

And finally…

If you’ve heard rumours that independent retailers are heading to the discounters to source products for re-sale in their stores, you can largely ignore them. More than 99% of independent retailers say they don’t use the discounters, and 99.5% of shoppers in discounters are consumers, not businesses (we’ve just launched a discounter tracking programme).

And we couldn’t finish without talking about the economy and the credit crunch. Fifty seven per cent of independent retailers believe the credit crunch has caused shoppers to spend less.

However, only 46% of shoppers say they are spending less… with cut backs on larger ticket or discretionary lines. We interviewed 30,000 convenience shoppers recently and found that as many of them plan to conduct more of their shopping in local stores as are planning to cut back on shopping locally. Now, more than ever, consumers need their local shops to be accessible, reliable and have product available.

C Cs holding firm against delivered

If you believe that cash and carries are only used as a top-up source for caterers, think again. About a third of caterers in a cash and carry are there for their main weekly shop. We also have just found out that caterers are buying slightly less of their needs from delivered wholesalers now compared to a year ago, and they don’t expect things to change much in the next 12 months?

So have cash and carries improved their offer over the last 12 months? Or are caterers using cash and carries more as a result of the current economic climate because there are no minimum drops or carriage charges and they can do more “little and often?” These are just some of the latest findings from the Cash Carry Caterer Tracking Programme from him! which has just interviewed over 2,500 caterers face-to-face at cash and carries around the country.

Is the price right?

Caterer satisfaction ratings for things like product availability in the cash and carry, quality of fresh products and ease of finding products all remain pretty much on par with 2007. Caterers find cash and carry staff very helpful (average rating out of 10 is 8.3) but price ratings are lower (only 7.4/10 as an average) but whether this low rating is more effect of rising food prices due to inflation, or because caterers are more price focused due to the credit crunch, is hard to tell.

Nevertheless, price seems to be an issue. This might partially explain why own label penetration has now almost reached 50% in cash and carries by caterers.

Would you not expect promotions to play quite an important role for caterers? Currently, they’re not. Fewer than a quarter of caterers said promotions are important to them. Only 15% said they were planning to buy an item on promotion in the cash and carry, but 40% of caterers ended up buying an item (and it really is usually just one item) on promotion when in the cash and carry. So good conversion there.

Leaflets work

But it is interesting to learn that caterers – like retailers – are not gaining key information from the internet. Thirty per cent of caterers who planned to buy something on promotion learned of the promotion via a leaflet they had picked up or had received, only 1% found it on the internet.

No deals

One reason why promotions may not be as important to caterers as they are to retailers is that only a third of caterers offer promotions or “specials” to their customers. Find me a retailer who doesn’t have at least one thing on promotion. So caterers aren’t in the deal chasing game because they don’t offer promotions, and are not motivated by margin management either? Whether this changes over the coming nine months, when consumers cut back, remains to be seen.

You could deduce therefore that caterers are keener to inspire their customers with new and interesting menu options, except we find out that 40% of them have not changed one thing on their menu for over a year. So they’re not changing their menus, they’re not offering daily or weekly specials, only 5% of them plan to conduct local marketing in the next 12 months, and 80% have not even considered (let alone introduced) some form of loyalty scheme for their customers. Are caterers playing a slightly dangerous game, particularly when 56% of caterers say their customers are spending less in their outlets. Only 3% say their customers are spending more.

Over the coming months him! will be delving deeper into the findings from both the Cash Carry Caterer and Retailer Tracking Programmes – so look out for the features. In addition, him! is launching a Delivered Wholesale Tracking Programme this month covering both retail and foodservice. P H, Booker and Brakes have all signed up.

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