Sweet reward for initiative
Published: 13 March, 2009
Confectionery plays a vital role at BA Cash & Carry's two depots. Tanvier Ahmed, who runs the Swansea depot, says: "At both depots, the first aisles you walk into are confectionery because that's how important it is. The first rack ends you see, the first promotions, it's all about impulse."
When Mars national account manager Nick Johnn moved onto the BA account early last year he says he could see straight away that there was the opportunity to work with BA. He could see the potential in BA's retail club, and also suggested that a range rationalisation could bring benefits to the depot, by freeing up extra space for top sellers, and making it easier for customers to shop the fixture. He says: "I could see there was a lot of lines in the depot and Tanvier was good enough to show me all his sales out data for confectionery and when we analysed it we could see that that there were lines which were not really contributing any sales."
"I was surprised myself to see some of the sales figures when I handed them over to Nick," says Tanvier. "To see how many lines we were stocking, and selling so few of some of those lines. Going back a few years one of our competitors went through a range rationalisation and we picked up a lot of business because they de-listed too many lines and took it to the ultimate degree. So our mentality was we will get our range better than anybody and try to be all things to all people. But from that it grew to a point where it was almost unmanageable."
Overall BA was stocking 1,300 lines and after analysing the data Nick came back with proposals to de-list around 20%, and for a re-lay of the category which would allocate the extra space to the top sellers.
"Nick came back with the figures and a plan for the re-lay and I said right, carry on," says Tanvier. "These 2-300 products sell less than one outer a week on average so is there any point in having them in your business? Common sense says no."
The re-lay took place in January with Nick and a colleague personally doing the chocolate section, and BA staff doing the rest. There are separate sections for each of the big three manufacturers, Mars, Nestlé and Cadbury, and then sections where each sub category is grouped together.
"With the boxed, the medicated, we've merchandised them as a category, but for the big three, retailers tell us they know who makes what and that's the way they want to see it. The top priority is making it as easy as possible for the retailers," says Tanvier.
"Another important thing is brand identity. If you merchandise all bite-size makes together and all king-size together then you dilute the value of the brand. A lot of retailers buy into brands, and if someone like Mars comes up with NPD, like Planets last year, they know it is going to sell, so they take it just because of the Mars link. Whereas if you put it at the far end of an aisle in a different category, and they haven't got that link back to the parent brand, I'm not sure it's going to work."
There is also an educational side to the work, says Tanvier. Retailers can see confectionery correctly merchandised and can take that concept back to their stores, and they can also apply the principle of taking out what is not selling and optimising sales from the space they have. Mars also has a retail team which calls on Hot House members to provide advice, and help maintain standards, and they have been joined on visits by members of BA's retail support team. Tanvier says: "If they come in with people the retailers know from BA then it gives them some credibility and they take the advice seriously because it is endorsed by us. We endorse it because it is a category plan, the Landmark plan."
The success of the work carried out is shown by the increase in sales. Year-on-year confectionery sales are up 10%, which, says Tanvier, is a fantastic result taking into account the current economic climate.
Another indication of the success is Tanvier's intention to replicate the concept in other categories. He says: "My brother and I have been talking about range rationalisation and category relays for 18 months to two years but we didn't really have anyone to take it as a pioneer until Nick came in and said 'give me the data and I'll come back to you with some recommendations'. From there I've been telling other suppliers what Mars has done with us and they are all keen to get on board."
=== BA Cash & Carry ===
Tanvier Ahmed's parents owned stores before opening their first cash and carry in Cardiff in 1979. In the early days it was delivering to oriental caterers. The second purpose-built depot was opened in Swansea in 1991 and in 1999 the Cardiff depot (which is run by Tanvier's brother Zed) was rebuilt.
Both depots are about 150,000sq ft and at the Swansea depot the customer split is roughly 70% retailers to 30% caterers. In the last five or six years BA has made a decision to get back into catering in a big way, says Tanvier, and this part of the business has increased dramatically.
Both depots are in hot-beds of competition with a Bestway and a Booker bordering the Swansea depot, and in Cardiff Hatfield Road is known locally as Cash and Carry Alley because there are so many in close proximity.
Tanvier says the large depots enable BA to have a diverse range, but although they pride themselves on availability they keep tight control over stock to ensure they are not holding too much.
The company runs its own retail club using the LifeStyle Express fascia and about 50 of the 100 members have been converted to Landmark Wholesale's Hot House programme.