Last month him! unveiled the latest results from its Cash amp; Carry Retailer amp; Caterer Tracking Programmes at Glaziers Hall. Here we take a closer look at some of the findings. The good news is that the average independent retailer spending in the cash and carry is up by £43 on 2008. Frequency of visits has also increased by almost one visit every two weeks. Impulse purchasing has increased from 19% of retailers in 2008 to 22% this year. Perhaps more importantly the percentage of retailers failing to purchase an intended item has fallen by 3%.
When we look at caterers the story is slightly different. Although their spend has not increased, it has remained level with last year. Visit frequency has increased slightly, however impulse purchasing has decreased by 5%. But again the percentage of caterers failing to purchase an intended item has fallen by 3%.
So on the whole it is good news for cash and carries, but there are still about 20% of cash and carry customers failing to purchase all the items they intended to buy.
What if we could fulfil these intentions and eliminate the failed purchases. What would this mean to the cash and carry sector? We estimate the loss in sales to be about £200m, and “out of stock” is still the number one reason for customers failing to purchase in their cash and carry.
For independent retailers the main categories they are failing to buy are soft drinks, confectionery and chilled dairy. For the caterers soft drinks also predominate, but also tinned grocery, fresh fruit, vegetables and meat. When we look at the most frequently purchased categories it is soft drinks and confectionery, so is this a coincidence or is one driving the other?
We know more customers are buying on promotion than intended. For example 31% of retailers intend to purchase on promotion but 42% actually do and for the caterer there is an increase from 18% to 29%. We also know that a high proportion of the customers that buy on promotion are actually aware of promotions before they arrive at the depot. They come in looking for them so the mail-outs and leaflet distribution is working.
But is this having a detrimental effect on availability? While promotions are great for increasing immediate sales and impulse purchasing, is there another side? For the cash and carry customer if this failed purchase occurs while the product is on promotion it’s a double blow. Not only can the customer not purchase the product they wanted, but they are also missing out on their discount.
And is it a coincidence that after value and price, availability is the most important thing to both the retailer and the caterer visiting the cash and carry. But let’s not knock the promotions they are doing a job. They are driving additional sales. For almost 60% of the retailers that purchased on promotion it was an incremental sale, they weren’t planning on buying. This was as high as 67% in one cash and carry chain. When we look at the catering customers who purchased an item on promotion, 50% of the purchases (as high as 64% in one cash and carry) were incremental sales.
Again excellent results. And the retailers who are buying on promotion are spending an additional £177 versus the average retailer. That’s a 21% increase. And for the caterer buying on promotion they are spending an additional £67, giving a 23% increase in spend.
Pallet displays at the end of aisles are generating almost 30% of promotional sales. This is substantial when you consider the number of locations available compared to the main aisle locations.
Although, we know a good proportion of customers are aware of the promotions before entering the depot, there is still an opportunity to improve promotional awareness through the leaflets in reception. After all we know the promotional customer spends more than the average customer so shouldn’t we be driving leaflet distribution as much as possible?
Could staff simply hand the leaflets to the customers on their way in? Or what about trolley POS, another way to keep promotions in front of the customers.
So we know that customers can be influenced when they are in the depot, with 59% of retailers and 71% of caterers telling him! they do not have a budget to stick to, and this rises as high as 70% and 77% in one of the cash and carries.
And what’s more one third of retailers and caterers do not use a shopping list. Could computer systems at the cash and carry be adapted to provide customers with a print-out of items purchased last time they visited. We have it for online grocery shopping.