The GM Paradox

C-stores speak out on the wild and tricky world of selling novelties, seasonal items and HBC

Don't let the name fool you. “General merchandise” is not as mundane for convenience stores as it sounds. In fact, the secret to channel success seems to be based on quite the opposite tactic — keep it interesting, stay ahead of the seasonal curve and don't be afraid to get a little wild and crazy with it.

According to convenience retailers that recently spoke with Convenience Store News, general merchandise (GM) can run the gamut from toys and trinkets and holiday gifts, to seasonal impulse items or diesel oil, to oil paintings. The assortment seems to be limited only to a retailer's gambling instinct because while the margin rewards can be great (typically 30 to 60 percent), the same is true of the risk.

Consider some of the general merchandise items that have recently made their way into c-stores:

Silly Bandz — Distributed by BCP Imports, these bands made of silicone rubber formed into shapes including animals, objects, numbers and letters are normally worn as bracelets. They retail in themed packages, with a pack of 24 selling for about $5 and packets of 12 for about $2.50.

Wawa is one c-store that capitalized on the “silly” trend last May, according to Brian Adams, assortment manager. The key to its success was getting in and getting out fairly quickly, he said. “I've learned by wins and losses in this category. It's a balancing act of staying on top of trends so you can catch it early, then having a planned exit strategy.”

Pepper spray — Geo. H. Green Oil Co. in Fairburn, Ga., sold pepper spray from the Sabre Co. in a small black key ring canister “with limited success” awhile back, according to Jim Callahan, director of marketing. “Several years ago, they came out with the same item in a pink canister with donations being made to breast cancer and they flew off the shelves,” he relayed. “More recently, they have come out with pink and red lipstick-type canisters that do very well also.”

Apparently, the right general merchandise is a magnet for not only kids, but women shopping in c-stores.

Purses — And speaking of targeting the feminine set, “we sell a fair amount of purses in our stores, mostly between $29 and $59,” offered Mark Jackson, a buyer for Kolkhorst Petroleum in Novasota, Texas.

The secret to this type of merchandise is “switching out the assortment frequently,” according to Jackson. “We use comparative market data and try to apply it to our stores. It doesn't always work, but it's a starting point. It's all about the styles and keeping them fresh.”

While the chain used to employ a DSD (direct store delivery) vendor that “for the most part, picked the styles for us,” according to Jackson, he is in the process of switching to another vendor with a “faster turn-around time, so we may start getting more involved with the selection process.”

Big Valentine's cards — When it's time to say “I love you” in February, Kolkhorst Petroleum sets up displays of oversized Valentine cards — the cards are two feet by three feet — in its stores, supplied by a DSD vendor. “The biggest factor for success with it and other seasonal items is to be up early — well within 30 days of the holiday or event,” said Jackson.

Tape and batteries — While these might not be the most exciting general merchandise items, they are brilliant impulse offerings at holiday time, as Phyllis Simpler, operations manager at Medford, Ore.-based Minute Market, has learned.

“You want the battery sizes for the most popular toys out for the holidays, so you have to do your homework,” she stated. Scotch tape displays are another no-brainer sale for the season. “Some wholesalers are very good at getting these, but you have to pursue it — don't let it be an afterthought, plan ahead.”

Stocking stuffers — Simpler also mentioned “great unique candy-themed gift items for kids for under $5,” which she often finds on the Candyrific website. She then goes back to her wholesaler to see what's available.

While “dead weight can be a retailer's worst nightmare,” she advises other chains to go with their gut and not be afraid to take a chance on higher-priced items, especially during holiday time.

“A lot of c-stores don't think they have price elasticity,” she said. “They don't think they can sell items higher than a candy bar, but it's surprisingly not true.” The secret, she added, is doing research ahead of time and ordering it early — at least six weeks before the holiday. “The only way you can grow your sales is with new items. General merchandise is great for impulse buys, but you have to think ahead and put a plan in place.”

Oil paintings and metal art — Jackson is well aware of his chain's ability to sell high-ticket items. His stores have had fairly regular success with metal art from a Mexican distributor that retails for upward of $100. “He comes about once a month and brings all types of western art — Texas stars, mountain-scapes, equestrian themes, etc.”

Kolkhurst Petroleum also does fairly well with oil paintings from a local artist, which it uses to decorate store walls, attaching “a discreet price tag on the side or in the corner than can run up to $299,” Jackson said. These art items “don't fly out of the store, but we find they're unique, our customers don't see them everywhere, and we do sell an awful lot of them. I was surprised by it, but then I realized we could compete with places like Target and other home furnishings retailers.”

Jackson also recognizes that his chain's regional nature affords him the luxury of trying out more targeted general merchandise than a national chain.

Diesel injector fuel — Simpler used to sell a lot of diesel fuel additive in her general merchandise section until her wholesaler stopped carrying the smaller size.

“With the price of oil going up, it got really hard to sell a 20-ounce, $7-bottle of that,” she said. “We don't want to tie up money in general merchandise inventory.” So she called up her wholesaler and asked for some options.

“You can't be afraid in this business to call up your wholesaler and ask for something that works better for your stores.” In the case of the diesel oil, she asked for a smaller package and got it from another brand. “You need to be aggressive on this category, especially now,” she said.

Suntan lotion, fire logs, kindling and rock salt — These popular seasonal items work for Wawa in a segregated seasonal set. Adams noted that “we probably have five different planograms” for the various store configurations, but basically, suntan lotion is put out in the early spring, and fire logs are put out around Labor Day.

Customers looking for items like these are best satisfied if they purchase early. “My thought process is, it's OK to run out on these,” said Adams. “I'd much rather have that problem then 'what do I do with it now.' It's all about getting in and getting out.”