Three steps that can improve your candy sales.

Transcription

1 Three steps that can improve your candy sales.

2 Are You Getting The Most Out of Your Candy Sales? IN BILLIONS TOP FIVE GROSS MARGIN BY CATEGORY 49.7% 1.9% Candy 39.3% -0.6% Packaged Beverages 37.3% 0.2% Salty Snacks 20.6% Beer Growth in Gross Margin % VS Previous Year* Average Gross Margin: 28.7% 0.5% 16.2% 0.5% Cigarettes Source: 2010 NACS SOI Everyone loves Candy, and you will too because it is extremely profitable! TOP FIVE EDIBLE IN DOLLAR SALES $13.3 $11.6 The Candy Commodity has 49.7% Gross Margin, WOW! IN BILLIONS % Beer 1.8% Carb Bev $ % Snacks $3.5 $ % 11% Candy Juice Drinks Source: Nielsen 52 wks (04/16/11) Dollar % Change VS Previous Year* *Excluding fuel sales

3 Core-Mark Three Step Philosophy Three Key Steps. Our approach is designed with three key objectives in mind to help you get the most of out of your candy category: Leverage of the impulse purchases with multiple displays strategically placed to follow traffic patterns. Merchandise Mix for variety and true profit in a well-placed aisle. Apply a multiple-price point strategy to drive sales.

4 Shopper s Impulsive What impulse can offer you Candy Ice Cream NonCarb Beverage Food Service Hot Bev Sweet Snacks Candy Salty Snacks Carb Beverages Beer Aisle Endcap Candy REGISTER Cigarette HBC Candy Coffee/ Hot Bev OTP Sweet Snacks HBC This floor plan heat map shows the most walked path in a typical store. Counter has the highest foot traffic and aisle end cap drive people down the aisle. Impulse buying offers an opportunity to increase sales. Take full advantage of shopper s impulsive characteristics. Research shows that 27% of total shoppers make a decision to buy on impulse. 53% of Candy and 39% of Gum/Mint are bought on impulse.* Having more than one display location is key in capturing the impulse sale. That s good for your business. Core items in a secondary position increase sales as the top 50 items produce 83% of the sales. At minimum, candy should be in-line and on an end-cap to take advantage of the impulse purchase. PERCENT OF IN-STORE SALES MADE ON IMPULSE* C-Store Outlet 27% of Total Shoppers Make Impulse Purchase 27% 53% of Candy Shoppers Make Impulse Purchase 53% Candy, Gum and Mint are highimpulse purchased Items 39% of Gum/Mint Shoppers Make Impulse Purchase 39% Shoppers Impulse Purchase *Source: 2010 Meyers Research Center C-Store Close Up

5 Shopper s Impulsive Be sure you have a Candy in-line and on an end-cap SALES INCREASE WITH A DISPLAY % % % Of Sales that Are Incremental % 80% 75% 6.4% 0 End Cap Display Under The Counter Unit Std. Bar Counter Rack Hershey Test Stores in C-Store Source: Knowledge Networks Maximize your potential. Core items in a secondary position increase sales. At Minimum Candy should be in-line and on an end-cap. There is no more sure-fire way to capture the maximum potential candy sales than having more than one location in your store. Multiple Vendor Candy displays can increase sales. Take advantage of the impulsive characteristics of consumers with preferably a minimum of two candy displays strategically located in your store. Increase your sales with the Core-Mark s Candy End-Cap. With $150 retailer rebate, you can t go wrong!

6 Optimize Shelf Performance To increase profit PERCENTAGE OF SHOPPER THAT LEAVE WITOUT CANDY OR GUM OF CHOICE Candy Shoppers 34 % WITHOUT 66% WITH Source: 2010 Meyers Research Center C-Store Close Up LOCATION WHERE ITEMS WERE OBTAINED Candy Shoppers % of Items Purchased from Primary Location 31% of Items Purchased from Secondary Location 0 *Source: 2010 Meyers Research In-line merchandising and assortment are critical to Candy success. Why do 34% of shoppers leave the candy, gum and mint section without making a purchase? Because they are not able to find the item they desire. Strategic focus: formula for success. Priority #1 Close all distribution voids on core products. Priority #2 Use optimal schematics. Priority #3 Monitor non-core varieties for positive true profits.

7 Optimize Shelf Performance To increase profit Gum & Mint Power Brands Base Chocolate Non- Chocolate Anatomy of the in-line merchandised Candy aisle. Align brands together and move top-selling non-chocolates items from the bottom shelves to eye level to increase impulse purchases. Candy In-Line 8ft Maximizes visibility across core segments (gum/mint, chocolate, non-chocolate) Maintains shoppers decision tree integrity Top chocolate items in prime position Improves shelf position for enhanced non-chocolate growth Using the best schematic can lead to total chocolate/non-chocolate growth. Delivers performance improvement for entire category

8 Pricing Strategy Driving sales Candy In-Line, 8Ft Driving sales in the right direction. At this take rate, standard bars will deliver a 26.3% Increase in profit and king size will deliver a 23.7% Increase Multiple price points drive sales and profitability in the convenience class of trade. Everyday multiples deliver the best results for customers. Estimated 35% take rate on both standard and king size. in Millions Multi-Price Introduced in Q1`07 Q2`07 Cycled the Intro Q3`07 KING DOLLAR % CHANGE Large C-Store Chain Impact Example Q4`07 Removed the multi-pricing Q1`08 Q2`08 Q3`08 Q4`08 Q1`09 Reintroduced Multi-Pricing Q2`09 Q3`09 Q4`09 $2.29M $2.01M $2.48M King Avg Qtr

9 Pricing Strategy Grab your customers attention Awareness. Key to success with everyday multiple prices is making sure the consumer is aware of their options. Consumers today want the most of every dollar they spend, and the price/value equation is foremost in their minds. Suggested price 2/$2.22 Standard and 2/$3.00 for King. Improved attention through in-store marketing activity should strongly influence consumer behavior at the point of purchase. Journal of Marketing November * Contact your Core-Mark Representative for Shelf Danglers and Door Signs Consumers are looking for value. Grab their attention with signage!*

10 Peg and Theatre Box Valued-price options Staying ahead of the curve. Bagged Candy represents 17.4% of all candy sales and has shown continuous growth up 9% in Convenience Stores for 2010 NACS SOI A driving force behind peg is the value-price options of repackaged candy. Core-Mark s private bag brand, Cable Car, delivers all the value of a peg with a Suggested Retail Price range of $1.39 to $1.49. Higher prices, smaller packages and pain at the pump are driving consumers to buy lower priced items Pat Conroy, Vice Chairman Of Deloitte LLP CANDY IN-LINE HANGING BAG & THEATRE, 8ft

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