Time is running out for independent retailers, and the wholesalers who supply them, if they fail to provide consumers with the fresh offer they are seeking. This was the warning from the recent IGD convenience and wholesaling conference, where IGD and HIM released their respective reports on the market and shoppers for 2006.
Some of the findings of the reports were:
l 49% of UK c-stores are independents, accounting for only 29% of UK c-sector sales;
l Only 25% of UK c-store shoppers think their c-store sells a credible range of fresh products;
l Shopper ratings for fresh products only average 6.5/10. This average includes the likes of the supermarket convenience stores such as Tesco Express and Sainsbury’s Local, and excluding them would make the average lower still;
l Most independent retailers don’t believe fresh products are important to them, or their customers, often not stocking them and certainly not seeing fresh as being important footfall and profit drivers in the 12 months ahead.
How can a retailer believe that fresh is not part of a credible 2006 convenience offer? By focusing only on “the staples” (the easy to manage core impulse and CTN lines), the retailer can only expect to be a convenient store. Fresh triggers the change from convenient store to convenience store. For example, three quarters of UK consumers think an in-store bakery improves the overall appeal of a convenience store.
What role do wholesalers have in all of this? Wholesalers’ futures depend on the survival of their customers and potential customers (putting aside their development into new areas such as catering). It is in wholesalers’ primary interests to recognise, educate and inspire retailers to invest in fresh, overcome their fear of wastage and become expert in fresh retailing.
Wholesalers might want to develop “Business Building” parts of their website, to complement the extensive promotion communication information already on sites. At trade days, conferences or road-shows, wholesalers should ensure there are presentations on the importance of fresh. Service should also be highlighted because eight out of the last nine years since the Convenience Tracking Programme was born, fast and friendly service have been the two things most important to convenience and forecourt shoppers.
Some of the drop-shipment developments by a large number of operators are encouraging. But should operators lead by example and totally commit to fresh themselves? Every cash and carry branch in the country should commit to selling fresh in the same way as chains such as Budgens, Sainsbury’s Local, Tesco Express, Waitrose and Fresh Wild. Wholesalers would need to swallow the hit on wastage but this would all be part of the learning process. They could then share their learnings and expertise with retailers.
Local farmers’ markets could be introduced in each cash and carry or in their car parks – Booker has launched this – say three times a week. This could help drive footfall and loyalty to one particular branch over others. Fifty six per cent of UK consumers think convenience stores should sell locally sourced products – what an opportunity for wholesalers and their retailer members to deliver against their customers’ needs. It provides a point of difference (but not for long – supermarkets have already sniffed this as a potential opportunity), an opportunity to offer a premium range and increasing the relevancy of stores in their community.
Suppliers need to support fresh in the same way they support their own brands and become expert in fresh – sales of beer, chocolate bars and soft drinks will improve in stores which have higher footfall caused by an improved fresh offer.