Although publicans restaurant owners and hoteliers all run catering businesses, they shop cash and carries very differently and have very different business needs. This was one of the findings identified in HIM’s Cash and Carry Caterer Tracking Programme which was launched at the end of 2006 after interviewing 2,200 caterers face-to-face while they were shopping at branches of Booker, Makro, Batleys and Landmark.
Hoteliers are much more likely to be visiting a cash and carry because they have run out of something and need it urgently (distress), with dairy their top purchases. Restaurant owners and publicans, however, are more likely to be on a regular planned visit. Tom Fender, director at HIM, believes operators and suppliers need to understand the differences between the various customer groups and consider targeting each differently. He says: “A focused approach backed up with intelligence and data should prove more successful than a scattergun one-size-fits-all method.”
For example, hoteliers are less interested in promotions (because they’re on a distress mission), hence fewer of them buy items on promotion. Hoteliers place product availability as their top priority. Maybe operators and dairy suppliers would want to consider introducing availability guarantees to reassure hoteliers that the industry can be trusted to deliver against their needs when they need it most – during distress trips?
It is the restaurant (and sandwich shop) owners who buy into promotions more than any other catering business owner. Two-for-ones are the preferred promotion method for all caterers, regardless of the type of business they run. Free giveaways don’t appeal at all and suppliers should be deterred from considering these as an option – 2,200 caterers have given them the big thumbs down.
Product availability and value-for-money are the top priorities for all caterers – but some interesting differences also appear. For example, staff knowledge is more important to hoteliers than restaurant owners and publicans… but friendly service is less important. Restaurant owners are the harshest critics when it comes to product availability and value-for-money from cash and carries, giving pretty low satisfaction ratings. In fact, better availability tops their wish-list of improvements at their cash and carry.
More than 50% of publicans bought alcohol on their trip to the cash and carry (with a growing number of cash and carries selling beer kegs), making it comfortably the top selling department to publicans – ahead of soft drinks which is the second highest selling line by publicans. Many more hoteliers buy hot beverages and non food items than the industry average, whereas restaurant owners buy cooking sauces and frozen foods.
Not surprisingly, food accounts for a higher percentage of total sales in restaurants (67%) than in pubs (37%) – but it is expected food participation will grow in English and Welsh pubs this year when the smoking ban comes into force. Nearly 20% of caterers who visit a cash and carry are publicans – and they are an important customer segment: publicans spend more per trip and more per annum at cash and carries than any other catering business proprietor. They also visit their cash and carry twice a week on average.
Publicans are also more likely to turn to suppliers and wholesalers for advice, information and support than any other outlet type proprietor.
What of hoteliers, who make up 10% of cash and carry caterer visitors? More hoteliers use supermarkets to source products than any other caterer type proprietor, mainly for bread/bakery items, milk and other fresh lines. Hoteliers visit cash and carries less frequently than any other caterer type, and spend less per trip too.
Hoteliers are also the ones who change their menus less frequently than any other caterer business type (30% of hoteliers never change their menus).
The key message to wholesalers and suppliers is that different caterers have different needs and behave differently based on their circumstances. It’s crucial for the industry to develop strategies targeting specific customer groups based on a better understanding of what they want. Half of visitors to cash and carries in the UK are now caterers. Their needs are completely different to retailers. Are you exploiting the opportunities?