Candy Front And Center

Chocolate + Non-Chocolate + Gum + Salty Snacks

A look at how savvy convenience retailers stay sweet on the sacred checkout space

Can the average convenience store shopper, who is ready to check out and in a rush, be enticed into an impulse purchase by a delectable candy treat sitting beside the cash register? Chances are, the answer is yes. But savvy retailers know the odds go up even higher if they have an evolved checkout merchandising plan — one that strategically incorporates confections.

"Candy has very high margins — in the 48- to 49-percent range. It has great brands, great recognition and comes with a huge impulse opportunity," said Kit Dietz, owner of Dietz Consulting LLC, which has conducted a number of candy and snack studies for the industry.

While he and others agree that the front counter provides substantial opportunities for c-stores to capitalize on incremental candy and snack sales, they also recognize that the most forward-thinking players understand how the strategy has evolved. With that in mind, here are some of the latest tips for keeping the front end sweet on sweets:

• Treat the front counter like a planned secondary location for candy/gum/mints. The operative word here is planned. Random or haphazard placement of unplanned products is not ideal. A planogrammed tactic is one utilized by ampm for some time now, according to Jim Hachtel, senior category manager for BP/ARCO ampm, who explained that his chain has permanent, shelved planogram spaces on all of its checkout counters, typically "three distinct spots" for candy and snacks.

"Once customers get to the counter, they are only there for 30 seconds or less," he said. "So you have to be focused and organized and make it easy for them to be impulsive and buy that basket-building item."

• Focus primarily on core items. For several years now, E-Z Mart Stores Inc. based in Texarkana, Texas, has utilized candy racks at its checkout counters, but "this area is reserved for the top sellers as secondary placement," explained Danna Huskey, category manager. Top sellers, or core items, are the category buzz phrases of late and what c-stores have been generally focused on in the category, thanks to studies by Dietz and others.

"The top 4 percent of candy SKUs are driving half the category sales — that's pretty staggering and hard to ignore," maintained Dietz. "Core chocolate SKUs will also sell more than two times as frequently as the average chocolate SKU, but deliver more than four and a half times the profitability."

The point is, what works inline — focusing on high-velocity SKUs — is also working up front, perhaps even more so, where the choice is severely limited.

• Rotate, rotate. Rotating key items in the various confections subcategories, such as chocolate, non-chocolate, gum and mints, is an effective up-front strategy, according to David Bishop, managing partner of Balvor LLC, which recently conducted candy studies in conjunction with Convenience Store News. He suggests that c-stores take five core candy bars and rotate them at the checkout for one month. Then the next month, do the same with non-chocolate items, and so forth.

"It's the rotation that lets you do a better job serving a broader audience," he noted.

• Get the specials going. Jim Callahan, a fan of creative candy merchandising and director of marketing for Geo H. Green Oil Co. in Fairburn, Ga., said he loves doing "multiple pricing deals" right from the front counter. "We get $1.29 for a standard candy bar, so if we get a deal where we can do three for $2.49, we are able to place a sign that says, "Save $1.38 on Three" or "Buy 2 Get 1 Free." In this economy, we try to make it a tempting choice; the savings must be tangible to the consumer."

Because the front counter has a natural "billboarding effect" on consumers, according to Bishop, highlighting clear signage of multiple price deals like Callahan refers to is an imperative best merchandising practice. "The use of a simple wobbler is effective, but the message has to be communicated quickly and easily," said Bishop.

• Don't overlook using king-size bars as specials. King-size candy bars might take up more room, but they are growing in popularity at the checkout because many of them are high-velocity/core sellers, and the higher price gives c-stores more pennies to play with, according to Callahan. He explained that this summer, he got a super deal on 26 shippers of 264-count king-size Hershey bars (plain, almond, Reese's, Cookies 'n' Cream, Kit Kat and PayDay) for his two truck stops, which he specially priced at 99 cents each.

He acknowledged that candy sells well off a small table located in the main route to the register, "but they fly from that 'golden acre/mile' next to the cash register — more than two to one, register to table," he said. "In a 13-week period, we averaged moving more than 250 sales a week at each of our two small truck stops — more than 6,000 happy customers, most of who did not come in intent on buying a candy bar, let alone a king-size bar." He added that on those 99-cent king-size bars, the stores still saw a 38 percent gross-margin return.

• Bring on the basket. In addition to utilizing racks up front with candy, many c-stores employ baskets as a display method with varying strategies. ampm uses baskets for snack-size candy so customers can mix and match their favorite flavors, according to Hachtel, who also stressed those baskets are planogrammed just as other front-end displays are.

E-Z Mart takes a different approach with baskets up front. "When a box of force-out novelty candy has two or three pieces left, putting those last few pieces into a basket or box at the register is a great way to move through them," offered Huskey. "Changing up the placement of the basket at the checkout will keep it from getting stagnant to the regular customers."

• Sell with suggestion. Suggestive selling has proven to be a good strategy for incremental sales, but perhaps even more so when the candy is up front and staring customers right in the face. "It's the final push that gets many shoppers to make that impulse purchase," said Bishop.

For comments, please contact Renée M. Covino, Contributing Editor, at [email protected].