CSD: Sticky Choices

Discussion
Sep 29, 2008

By Julie Crawshaw

Through a special arrangement, presented here for discussion is an excerpt of a current article from Convenience Store Decisions magazine.

Having a tough time deciding which gums and mints to carry? You’re not alone. The amazing number and diversity of new entries in this important category have most convenience store retailers second-guessing the wisdom of their choices.

From energy boosts to dietary supplements, gum and mints are now available in a wide variety of formats at a multitude of price points, presenting difficult choices when it comes to stocking shelves and displays in the candy aisle and the front counter. Since the global gum industry alone is worth an estimated $19.5 billion annually, it clearly behooves category managers to make careful choices about which gums they elect to sell.

One of the best ways to decide whether or not to carry a new product: listen to customer requests. That’s how Joao Carvalho, who owns a few Islander Marketplace stores in downtown Miami, began selling VE2 Energy Gum, two pieces of which are equal to an eight-ounce cup of coffee or an energy drink.

A friend and customer mentioned the gum to Mr. Carvalho. “It kind of struck me,” he said. “I thought, ‘What else are they going to come up with?'”

Mr. Carvalho acquired a couple of cases of the gum the following day and put it out with the other 50 varieties he carries. “I was surprised at how rapidly it sold, especially as we didn’t do a point-of-sale (POS) display,” Mr. Carvalho said. “I tested it myself and found my friend was right – it does give you an instant pickup. I started telling people they should try it instead of drinking so much coffee.”

Sales figures, of course, remain the determining factor of choice for many c-store retailers, as well they should. Jerry Goff, director of operations for Fred’s Minit Mart LLC, said his company has received some anecdotal information on several new supplemental gums and mints and stocked a few, but has not had a lot of success with them. Goff makes choices about which brands of gum and mints to stock at the chain’s 34 stores by what’s selling and what’s not as compared to customer feedback.

“Obviously the gum and mint rack is one of the areas we look at most closely,” Mr. Goff said. “We make changes almost monthly to make sure we have the right products.”

While Minit Mart’s confectionery sales have gone down overall, gum and mints continue to perform well. The changes Goff makes don’t necessarily come about as a result of dropping current stock in favor of what’s new, though.

“We still do not scan, so we work pretty closely with manufacturers,” he said. “We cull items and offer new ones on a regular basis on the basis of the market intelligence we get from them.”

Discussion Questions: What are some smart strategies for smaller convenience stores with limited resources to determine which items to stock? How big a role should customer feedback play in deciding which brands to stock in dense categories such as candy and mints?

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6 Comments on "CSD: Sticky Choices"


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Dr. Stephen Needel
Guest
13 years 7 months ago

I came to this question a little late in the day and notice that nobody asked where the manufacturers have been in this business? We’ve done some tests in this area with findings that manufacturers could share with the store owners, either directly or through industry channels. I agree–this is an area that cries out for category management.

David Biernbaum
Guest
13 years 7 months ago

The entire issue of gums and mints need to be approached with some diverse segmentation.

  • Fresh breath
  • Dry Mouth
  • Candy & Chewing Gum
  • Premium
  • Commodity
  • Big Brands
  • Specialty Brands
  • Private Label
Ed Dennis
Guest
Ed Dennis
13 years 7 months ago

As always, anyone selling candy should have a great relationship with their distributor representative. These guys move from store to store and know what is selling where. I know they push to have new items put in inventory, but they also have an investment in the retailers business as much of their compensation is commission.

I have known of many cases where distributor reps traded out slow merchandise for product that promised quicker turns. However if you are a retailer who spends all your time shopping distributors to save a penny here and there then don’t look for much help when you in your infinite wisdom buy a load of stinkers. When a rep knows that you don’t care about your relationship with him or his company, he isn’t likely to care much about taking care of you.

Art Williams
Guest
Art Williams
13 years 7 months ago
If there ever was an issue that cried out for category management, this is it. High impulse sales items, high sales, high turnover, high margin, great variety, and shortage of space to carry everything! A category manager’s dream situation! Use all the traditional category management tools and redo the analysis often. Study syndicated data to learn what is selling nationally and especially in your area. Your suppliers should have this available to you. Use the decision tree to better understand how the consumer looks at the category and assure that you have the key items that they are looking for. If your supplier or manufacturer doesn’t have this available, you may have the wrong one? Are you devoting enough space to the category based on its ROI? Is the merchandising right to highlight the most profitable items? Are you controlling the out-of-stocks? Restocking shouldn’t be an issue in a c-store if your inventory and ordering is right, but facings still have to be correct. Listen to the consumer! Instead of trying to get them to… Read more »
Nikki Baird
Guest
Nikki Baird
13 years 7 months ago
Liquor stores in Colorado by law must be single-store entities. There are no chains. So these stores tend towards three types: the one “flagship”-type store that a chain is allowed, the mega-giant store that sells every conceivable variety of everything, and the local mom-and-pop. There is one local mom-and-pop store that has the most brilliant end-cap strategy I’ve seen–and it contributes to a significant portion of their sales. The owner says he can’t keep these two end-caps stocked because product flies off so fast. The two end-caps are one, top sellers, and two, new items. Now he’s doing it for wine, but it seems like an easy way for any store, for any category, to tap into two trends manifesting online–the desire to know what’s new and different, and the desire to know what everyone else thinks. You don’t have to do sophisticated market basket analysis or affinity analysis or any kind of optimization to figure out what to carry. Make a bet on an end-cap, take the winners and replace the rest with something… Read more »
Doron Levy
Guest
Doron Levy
13 years 7 months ago

It is all about the customer in this category! If I was an owner and had limited rack space for gum and mints, I would only stock the top 5 or 10 from each brand and reserve space for new launches. I would also utilize any prepack floor displays offered by the vendor and position them according to traffic flow in the store.

Tracking sales is also very important to see what’s hot and what’s not. Because of the eventual spoilage of the product, using the sales data to determine what must be marked down and cleared out is the key to maintaining freshness on the shelf. And of course section image maintenance. If the rack looks good and is full, people are more apt to buy on impulse in this category.

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