Skip to main content
Blue plums
Blue plums
December 29, 2021

The top priority for most retailers is to deliver sales. This can be measured in total sales dollars, percentage increase over previous year compared to budget,  or some other means. Regardless of how you want to quantify it, sales are a top priority. You should be thinking about sales in your business and looking for opportunities to grow sales for you and your customers. 

 

1.  Package size. In the entire food and beverage industry, we see a lot of changes to package size. With increased cost of inputs and labour, the reality is that it costs more to produce the products. Consumer packaged goods companies are always trying to find the right size that will drive volume and deliver the right rate of return. In produce we need to think about this more often. We have been using the same package size on some items for a long time. 

Given the challenges of operating in today’s environment we should question the sizes. The shift to a smaller package size can be advantageous because the retail might go down and be more enticing to people or work well with a multi buy retail (2 for $5.00). Another consideration is to increase the package size and sell more to the existing consumer. In this example, the current price might be 375g package for $2.99. A new 454g package for $3.99 might be attractive to just as many consumers and you will realize a 20 per cent sales increase.

Changing a package size can be a challenge, but the results might make it worthwhile. You should always check with customers before you invest too much to ensure they agree with the change. 

 

2.   In-stock position. Building relationships with customers takes a lot of time and investments. With existing customers, you already have the relationships and selling them more can be easier than building new markets. Often the best sales increase is with an existing customer. It can be exciting to land a new account or customer, but it also takes a lot of work and a long time. As you consider your plans for the upcoming year it is important to break down where your sales will be generated. 

To increase your sales to existing customers, in-stock position can be a route to success. Retailers are very focused on in-stock position as they take the approach, if we are out of stock we missed a sale. They also have access to sales data by store and even by hour. We used to review this and called it our “stores with no sales” report. The premise was that if a store had no sales after 5 pm on any of the top-selling items they were either out of stock or the product was out back and never made it to the floor.

You do not have access to the front-end sales data, but you can offer to work with your customers. If you and the customer agree the sales should be 60 units per store per week and results are lower, ask them if it is possible to work together on improving in-stock position. You can suggest the stores with no sales report. You might have to offer to make some late adjustments to warehouse orders and check on a few stores. This might be some extra work, but it is probably less work than it takes to develop a new customer.

 

3.  Ready-to-cook items. Consumers have changed a lot during the pandemic. We see more millennials shopping in grocery stores and these shoppers prefer more work done for them. They used to eat out often but now with many people still staying closer to home, this generation is cooking more in their own kitchens. Food is an event for these consumers and you need to find options they will support.

An example of a ready to cook item is a potato with some seasoning on it in a foil tray. Certainly, some consumers would prefer to do it themselves, but there is a growing segment of the population who prefer this option.

It does require work to develop products and get them listed. It can also help you increase brand awareness and deliver some incremental sales for your customers.

 

4.  Complementary items. As prices change, there might be opportunities to group products together. Consumers might not buy two packages at the new higher price, but if they can purchase two complementary items in one package, this offering might be appealing. The new package with the complementary items might sell for more than the single item and generate extra sales and profit.

It takes time and investment to develop new products. If you have some ideas about how to combine some products, get input from your customer at the right stage in development. You also must be careful to share the ideas with the right people you can trust. Assuming they are the right people, you can get buy-in from them and some level of commitment to the idea.

 

5.  Minimum orders. Retailers do not like the term ‘minimum order’ because they perceive this to be giving control to the supplier. With logistics costing more than ever, it is advantageous to get your customers to buy more per delivery. If you know you will get a better freight rate when you ship more than 10 pallets, you should provide incentives to your customers to get there. Call this a volume rebate and they will be much more excited.

In today’s marketplace, there is a lot of fluctuation of prices. Perhaps you must increase your case cost to $20.00, which includes $2.00 for freight. You also know if you ship more than 10 pallets you will decrease your freight costs to $1.40 per case. You can offer them a volume discount of $0.50 per case for orders of more than 10 pallets. 

You will generate a little more ($0.10) in your own business and you will also be putting more product into their warehouse. Increasing your pallets per order can have a very positive impact on your sales.

Sales increases can come from many places. It is not always a requirement to drop the price and sell more. When a marketplace is changing rapidly, this can present opportunities to grow sales with different ideas. When you are considering different ideas find the right opportunity to get input from trusted customers. It does require time, energy and investment to develop and implement new products. You need to ensure there is a payback for your hard work.

Standard (Image)

Add new comment

Plain text

  • No HTML tags allowed.
  • Lines and paragraphs break automatically.
  • Web page addresses and email addresses turn into links automatically.
Submitted by Peter Chapman on 29 December 2021