Three steps that can improve your candy sales. - Core-Mark

Three steps that can
improve your candy sales.
Are You Getting The Most Out of
Your Candy Sales?
Everyone loves Candy, and you
will too because it is extremely
profitable!
TOP FIVE GROSS MARGIN BY CATEGORY
50
49.7%
39.3%
IN BILLIONS
40
37.3%
Average Gross Margin: 28.7%
30
20.6%
20
10
16.2%
1.9%
-0.6%
0.2%
0.5%
0.5%
Candy
Packaged
Beverages
Salty Snacks
Beer
Cigarettes
Source: 2010 NACS SOI
0
Growth in Gross Margin % VS Previous Year*
TOP FIVE EDIBLE IN DOLLAR SALES
15
$11.6
12
IN BILLIONS
The Candy Commodity has
49.7% Gross Margin, WOW!
$13.3
9
$4.9
6
$3.5
$3.2
3
-3.0%
1.8%
4.4%
7.1%
11%
Beer
Carb Bev
Snacks
Candy
Juice Drinks
Source: Nielsen 52 wks (04/16/11)
0
Dollar % Change VS Previous Year*
*Excluding fuel sales
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.
Shopper’s Impulsive
What “impulse” can offer you
Ice Cream
NonCarb Beverage
Be C
ve arb
ra
ge
s
y
Food Service
Hot
Bev
Sweet
Snacks
Candy
nd
Ca
Salty Snacks
Beer
Cigarette
HBC
Candy
REGISTER
Aisle
Endcap
Candy
Coffee/
Hot Bev
Sweet Snacks
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.
HBC
OTP
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
53% of Candy
Shoppers Make
Impulse Purchase
27%
39% of Gum/Mint
Shoppers Make
Impulse Purchase
0
20
40
Candy, Gum and Mint are highimpulse purchased Items
53%
39%
Shoppers
Impulse Purchase
60
80
100
*Source: 2010 Meyers Research Center C-Store Close Up
Shopper’s Impulsive
Be sure you have a Candy in-line and on an end-cap
SALES INCREASE WITH A DISPLAY
15
12.3%
10.8%
12
9
6.4%
6
3
50%
80%
75%
Source: Knowledge
Networks
Co
un Std
te . B
rR a
ac r
k
0
En
d
Di Ca
sp p
la
y
U
Co nd
un er
te Th
rU e
ni
t
% Of Sales that
Are Incremental
Hershey Test Stores in C-Store
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!
Optimize Shelf Performance
To increase profit
PERCENTAGE OF SHOPPER THAT LEAVE WITOUT
CANDY OR GUM OF CHOICE
Candy Shoppers
LOCATION WHERE
ITEMS WERE OBTAINED
Candy Shoppers
80
70
34 %
WITHOUT
60
69% of Items
Purchased from
Primary Location
50
66%
WITH
40
30
Source: 2010 Meyers Research
Center C-Store Close Up
31% of Items
Purchased from
Secondary Location
20
10
0
*Source: 2010 Meyers Research
Center C-Store Close Up
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.
Optimize Shelf Performance
To increase profit
Gum & Mint
Power Brands
NonChocolate
Base Chocolate
Candy In-Line 8ft
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.
• 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
• Delivers performance improvement
for entire category
Using the best schematic can lead to
total chocolate/non-chocolate growth.
Pricing Strategy
KING DOLLAR % CHANGE
Driving sales
Large C-Store Chain Impact Example
$2.29M
35
$2.01M
$2.48M
30
23.3%
25
20
15
15.10%
17.70%
14.6%
10
5
0
-5
Multi-Price
Introduced
in 2006
31.30%
1.9%
4.3%
3.5%
-7.2% -16%
-13.3% -12.3%
Q1 `07 Q2 `07 Q3 `07 Q4 `07 Q1 `08 Q2 `08 Q3 `08 Q4 `08 Q1 `09 Q2 `09 Q3 `09 Q4 `09
Candy In-Line, 8Ft
-10
Cycled
the Intro
-15
-20
Reintroduced
Driving sales in the right direction.
Multi-Pricing
• Multiple price points drive sales and profitability in the
convenience class of trade.
At this take rate, standard bars will
deliver a 26.3% Increase in profit and
king size will deliver a 23.7% Increase
• Everyday multiples deliver the best results for customers.
• Estimated 35% take rate on both standard and king size.
KING DOLLAR % CHANGE
Large C-Store Chain Impact Example
Multi-Price
Introduced
in 2006
Cycled
the Intro
Removed the
multi-pricing
Reintroduced
Multi-Pricing
35
30
25
in Millions
20
15
10
5
0
-5
-10
-15
-20
Q1`07
Q2`07
Q3`07
$2.29M
Q4`07
Q1`08
Q2`08
Q3`08
$2.01M
Q4`08
Q1`09
Q2`09
Q3`09
Q4`09
$2.48M
King Avg Qtr
Kin
Pricing Strategy
Grab your customers attention
Awareness.
Key to success with everyday multiple prices is making sure the consumer
is aware of their options.
ng Avg
Qtr
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 2009.
* Contact your Core-Mark Representative
for Shelf Danglers and Door Signs
Consumers are looking for value.
Grab their attention with signage!*
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 2010.
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.
CANDY IN-LINE—HANGING BAG & THEATRE, 8ft
“Higher prices, smaller packages
and pain at the pump are driving
consumers to buy lower priced items”
Pat Conroy, Vice Chairman Of Deloitte LLP
Arkansas
3400 Commerce Road
Forrest City, Arkansas 72335
(870) 633—2044
Florida
9020 King Palm Drive
Tampa, Florida 33619
(813) 664-0474, (855) 268-2672
Oregon
303 N.E. F Street
Grants Pass, OR 97526
(541) 476–6651, (800) 622–1206
California
200 Core–Mark Court
Bakersfield, CA 93307
(661) 366–2673, (800) 310–1392
Georgia
4820 North Church Lane
Smyrna, GA 30080
(404) 792–2000, (800) 950–4323
13551 S.E. Johnson
Portland, OR 97222
(503) 652–0200, (800) 234–9994
353 Meyer Circle
Corona, CA 92879
(951) 736–1591, (800) 662–8518
Kentucky
1055 Salt River Road
Leitchfield, KY 42754
(270) 259–9341, (866) 233–7114
2311 East 48th Street
Los Angeles, CA 90058
(323) 583–6531, (800) 372–6411
1520 National Drive
Sacramento, CA 95834
(916) 927–0795, (800) 472–7254
31300 Medallion Drive
Hayward, CA 94544
(510) 487–3000, (800) 732–1740
Colorado
3797 North Windsor Drive
Aurora, CO 80011
(303) 373–2300, (800) 333–7879
Massachusetts
355 Main Street
Whitinsville, MA 01588
(508) 234–9000, (800) 365–2888
Minneapolis
1035 Nathan Lane North
Plymouth, MN 55441
(763) 545–3700, (800) 742–5655
New Mexico
5600 2nd Street N.W.
Albuquerque, NM 87107
(505) 343–9577, (800) 541–2755
Pennsylvania
100 West End Road
Wilkes–Barre, PA 18703
(570) 823–2447, (800) 395–5346
Texas
6401 Will Rogers Blvd., Suite 200
Fort Worth, TX 76134
(817) 293–5558, (800) 348–9991
Utah
3130 South 1030 West
Salt Lake, UT 84119
(801) 972–3833, (800) 635–0911
Washington
4007 N. Industrial Park 1st Street
Spokane Valley, WA 99216
(509) 535–9768, (800) 622–4693
Nevada
3950 West Harmon
Las Vegas, NV 89103
(702) 876–5220, (800) 451–1870
1594 9/2011