Katie Littler

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Convenience Tracking Programme 2009 Understanding
the symbols shopper
Katie Littler Programmes Director
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Agenda

• Introductions Objectives
• Convenience market overview
• Convenience shopper needs and importances
• Promotions and deals
• Own label vs brand
• Lost sales and availability
• Group discussion

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CTP 2009 how we did it

• Interviews carried out 13th Feb 2nd April 2009
  inclusive
• On Exit Entry to store
• Across 24 Convenience Retailers, covering 34
  individual fascias
• 1374 Stores (England, Scotland Wales)
• 27,411 responses achieved, 7,351 symbols
• Across all days of week time of day
• MRS standards met throughout
• Complimentary bi-annual sector track
• And additionally this year
• SKU check and price audit
• Web survey of 500 c-store shoppers

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Consider those on the FRONTLINE

• 798 store owners sales staff

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So, whats going on out there?!
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The convenience market is out pacing the growth
of supermarkets.
3.3 YoY
6.1 YoY
bn
Source IGD Research 2009
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All sub sectors experiencing good growth for both
share of stores share of sales...except for
independents48,751 convenience stores in the UK
1.6 YoY
-5
7.7
2
-0.2
0.1
12.7
5.1
7.9
8
0.3
Source IGD Research 2009
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Whats happening in the symbols sector?

• Demonstrating stronger value for money
• Focus growth of private label
• New formats from Nisa-Todays, PH Premier (eg
  Premier Express format)
• Investment into new ranging category management
  techniques
• Working closer with manufacturers to drive
  operational standards
• Manufacturers focusing on pull rather than
  push
• Investment in hot food-to-go
• Increasingly rich data source (via EPOS) to
  build product distribution
• As trading conditions get harder, symbol benefits
  increasingly attractive to unaffiliated
• Fast food achieves highest level of penetration
  in symbols (major focus for Spar Musgrave)

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Shoppers say they are generally more price
conscious when grocery shopping
of shoppers saying they will do more of in
next 12 months
24
38
57
58
Buy more on promotion
Shopping around for price
Buying own label
Shopping more locally
Source him!s recession study 2009
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• The world has changed, but current convenience
  shoppers their needs remain ultimately the same

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The world is changing, but convenience shoppers
key needs remain the sameIts not all about
price, even this year
Even in current changing economic climate
convenience needs remain constant what I want,
when I want it, at a reasonable price.
Source him! CTP 2009, 2008, 2007
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Symbol retailers are doing a great job delivering
again most of these KPIs
How would you rate this store out of 10, where 1
is very poor and 10 is excellent
Source him! CTP 2009
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How does this differ by retailer?
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Shopping missions driving shoppers to convenience
stores remain constant but again differences
by retailer
Highest spending mission
Highest visit freq
Great profits
Providing a solution
Source him! CTP 2009
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Newsagent penetrations
Newspapers
Magazines
Cigarettes

• Budgens attracts less smokers

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BWS penetrations
BEER
WINE
SPIRITS
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Spar
2007
2008
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Occasion based merchandising (Big Night
In) Meeting shopper needs!
Spar Rwibina
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Impulse / Food to go
Crisps snacks
Confectionery
Soft drinks

• Budgens has highest penetration for in-store
  bakery (11)
• Sandwich penetration c.1-2 across the retailers

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Continued growth of Food to go Everyones gone
meal deal crazy!
3 in 4 shoppers told him! that a meal deal would
encourage them to buy their lunch from a
convenience store
Source retailer websites 23/3/09
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Services obviously critical within symbols15
will use a service(more than SDs, not far behind
Confec cigs)
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Nearly half of shoppers are more interested in
money saving vouchers

• Case Study
• Mills undersold the key bread category in their
  stores which had recently converted from CTNs to
  convenience formats
• Mechanic
• TAG coupon added to energy receipts
• 50p off specific brand of sliced bread
• Results
• Coupon redemption 4
• Sales of the brand increased
• Sales of the category grew by 6
• (and have remained at higher levels)

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• Everyones looking for a deal now, arent they?
• Promotions are the no.1 way shoppers are now
  looking to save on grocery bills
• Promotions account for 27 of all spend in
  Supermarkets (18 in 1997)

Source Nielsen Homescan Survey (GB) Jan 2009,
Nielsen Homescan - Total purchasing 52 w/e
27th Dec 2008
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Promotions are still not a key driver to symbol
stores
Symbols
Super Cs
Intention to buy on promotion Bought something
on promotion
8
14
12
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• No great surprise, those who buy something on
  promotion rate store higher for overall value
  for money suggesting promotional communication
  has a place in creating overall sense of value
  perception for shoppers.
• but 28 of shoppers say a promotion would make
  NO difference to their choice of products here
  today (this obviously differs by category)

Source him! CTP 2009
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Only 32 notice a promotion in-store (hard to
believe!) so wheres the active selling in
convenience?
28 shoppers visit their symbol shoppers
EVERYDAY no wonder signage quickly becomes
wallpaper
Mills
Tesco Express
Of those who noticed in-store radio or TV, 13
said it influenced them to buy promotion
Spar
Spar
Source him! CTP 2009
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NISA doing best at promotional comms

• of shoppers who noticed a promotion

Source him! CTP 2009
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Budgens managing to convert the most
promotional purchases

• of shoppers who noticed a promotion who then
  went on to purchase (top 5)

Source him! CTP 2009
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Making promotions work harder in-store

• Confusing activity with accomplishment is
  dangerous
• 81 of symbol shoppers do not notice any signs,
  notices or messages as they approach the store.
• Only 3 of staff reminded shoppers of a promo
• Are we making them easy to implement in-store?
• Only 72 of symbol stores implement HO promotions
  ALL OF THE TIME (differs by retailer)
• WHY?
• Lack of space in-store
• Running out of stock
• Lack of space in store room
• Incorrect POS received
• Dont register on tills

Source him! CTP 2009, Frontline Feedback
32
Which promotional mechanics are symbol retailers
most likely to run in-store?
Which promotions work best in your store?

• BOGOF
• TPR
• Multi deal
• Extra volume
• Money off voucher
• Entry to prize

Source him! CTP 2009 Frontline Feedback
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PMP is becoming more popular!
44 now think PMP are cheaper than normal store
price (vs 28 in 07)
48 now say that a PMP encourage them to buy a
product
Source him! CTP 2007, 2009 2009 CTP web survey
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PMP has a bigger influence in certain categories
If you went to a c-store today needing to buy
category x and there was the choice of a PMP, how
would this influence your decision whether or not
to buy it? (Encourage me to buy)
Source CTP 2009 Web survey
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Independent convenience retailers like PMP!

• 1 out of every 2 independent convenience
  retailers buy PMP
• 66 think PMP is an effective promotion tool
• 35 think shoppers are buying more PMP in symbol
  stores
• The products they are most likely to buy on PMP
• Soft drinks
• Grocery
• Frozen food
• Confectionery
• Cigarettes

Source him! Cash and Carry Retailer 2008, CTP
2009 Frontline Feedback
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• Just cutting price and adding more promotions is
  not enough to satisfy shoppers theres a whole
  lot more to value for money
• PMP definitely rising on the symbol retailers
  agenda.
• Dont lose out at the last hurdle. Dont forget
  the influence store staff have
• Active selling a till point
• Offer staff incentives
• Promotions must be staff friendly aswell having
  shopper appeal
• Easy to assemble POS with clear instructions

Source him! CTP 2009
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• We assume own label value brands growing on
  shoppers agenda.
• BUT brands are stilling winning in-store.

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Own label rising on shoppers symbol retailers
agenda
Are you buying more, less or the same own label
products compared to 12 months ago
Spar developed Spar Extra Value Musgrave
launched Good Value range Bestway focus on
Best-In range (30 yoy) Booker extended
Euro Shopper
Source him! CTP 2009
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Pull of national brands is still winning with
shoppers in-store

• Pull of national brands is winning in-store
  across most categories (proportion who actually
  bought brands is higher than who intended to
  buy brands)
• Brand is definitely king for many categories
  within Convenience

Source him! CTP 2009
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Own label part of the category product mix. Give
shoppers a choice...and grow category sales
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BIC Symbol merchandise own label next to best
selling brand...
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• Brand is still king in Convenience. But
  shoppers increasingly open to buying a value
  brand in certain categories so offering a choice
  is key
• Brands OL must find a way to live harmoniously
  together to grow overall category sales
• Merchandise own label / value brands with
  branded products to drive sales. Eg. If people
  want orange juice...they shop the OJ category,
  not the own label section.
• Provide merchandising guidelines for retailer /
  managers.

Source him! CTP 2009
43
Availability continues to cost the industry
salesAnd disappoint the shopper.
...In this climate, consumers look for value,
which is much wider than price... Tony Smith
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Availability, still causing lost sales

• Availability is the convenience shoppers no.1
  importance (46)
• Out of stocks still losing retailers and
  suppliers money everyday.
• 4 of shoppers fail to purchase an intended item.
  
• Why?
• 51 said the item was out of stock
• 14 said shop didnt sell it
• 15 said couldnt find it

Source him! CTP 2009
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Whats availability costing symbols sector (per
week)?
Symbols 6.1m

• OOS 3.9m
• Incorrect range 1.1m
• Cant find in-store 1.1m

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Is availability REALLY still an issue?

• according to CTP SKU check
• across 70 symbol stores
• March 09

and worst after 4pm
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Is the industry doing all it can to ensure
re-stocking shelves is easy for convenience
store staff? It seems not.
The categories staff find hardest/least enjoyable
to merchandise, fill and restock
Symbol store staff hit list

• Frozen
• Wine
• Tinned grocery
• Beer
• Crisps snacks
• Confectionery
• Chilled dairy
• Soft drinks

Source him! CTP 2009 Frontline feedback
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Why do staff find different categories hard to
manage?
I dont understand the different wine labels so
it takes such a long time
Tins are a nightmare as they dont stack-up
slide off each other
Packets always falling over
Crisps on sloping shelves are hard to manage
Its too cold. We dont have proper jackets to
work in the freezer
Cannot get full cases out
Soft drinks are too tricky to carry, so I dont
often do them
Situated behind till, so difficult to
merchandise
Re-stocking sweets is fiddly and messy. Want
shelf dividers
Source him! CTP 2009 Frontline feedback
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Helping keep products tidy on shelf.
Re-stocking sweets is fiddly and messy. Want
shelf dividers
50
62 find shelf ready packaging useful
Especially, crisps snacks, confectionery,
chilled dairy, tins, frozen food coincidence?
Packets always falling over
Making it easier to re-stock.
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I dont understand the different wine labels so
it takes such a long time

• What about navigation in the stock room?

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Are symbol retailers stocking the right products?
Do you follow planograms in the following
categories? Nb. bases on low sample sizes
Source him! CTP 2009 Frontline feedback
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• Need to ensure we understand the dynamics of
  our products from a retailer / sales staff
  members point of view. It may tick all the
  shopper and consumer boxes but ifs not on
  the shelf, it wont sell.
• Store managers have a high degree of autonomy,
  in terms of range and promotions. Symbol
  retailers need top and bottom management from
  suppliers, both at HO level and field
  sales/merchandise at store level.

Source him! CTP 2009
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• Thank you!