New Product Trial on the Upswing at C-stores

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New Product Trial on the Upswing at C-stores

By Don Longo, Convenience Store News - 10/23/2013

NATIONAL REPORT – While new product introductions were down across the board in the convenience store industry in 2012, according to data provided by Nielsen, c-store retailers that participated in Convenience Store News’ exclusive 2013 New Products Scorecard research said they have been testing more new products this year.

With the exception of the wine category, new items represented a smaller percentage of total UPCs (uniform product coded items) in every category last year, compared with the previous year, according to Nielsen statistics for the 52 weeks ended Dec. 12, 2012. General merchandise experienced the biggest drop as the percentage of new items in that category declined by 9.4 percentage points. Other categories with declines included: fluid milk (down 6.6 points), health and beauty care (down 6.1 points), packaged beverages (down 5.4 points), and frozen foods (down 5 points).

However, that trend appears to have reversed itself in 2013. Although new Nielsen data for the current year is not yet available, the majority of retailers responding to CSNews’ New Products Scorecard survey in October said they have increased the number of new products they’ve added to their shelves this year. More specifically, 57.5 percent of retailers said they increased the number of new products they’re carrying this year, compared to 50 percent who did so in 2010, the last time CSNews conducted its new products study.

In comparison, only 11.3 percent said they decreased new items this year (down from 13.8 percent in 2010), while 31.2 percent said they are carrying “about the same” number of new items.

The majority of retailers said they’ve added between 10 and 49 new items this year, with the highest percentage, 35 percent, saying they added 10 to 15 new products this year.

The 2013 New Products Scorecard study also shows that retailers appear to be more patient with new items now and are giving them a little more time to prove themselves. In 2010, none of the retailer respondents were willing to give a new item more than six months to meet sales expectations, and only 2.8 percent gave new items more than four months to pan out. This year, almost 10 percent of retailers are willing to give new products more than four months, with the highest percentage, 32 percent, saying they generally give new items three months to be successful.

When it comes to judging the success of new products, gross profit dollars and sales volume are still the two most important criteria being weighed by retailers. Ninety-five percent of retailers said it’s all about the gross profit dollars, while another 93 percent cited sales volume (retailers could select more than one answer). Another 65 percent cited excitement that the new item creates in the store as an important factor in judging its success. Interestingly, sales per square foot is important to only 38 percent of retailers, a decline from 2010 when 44 percent said sales productivity was important.

For more New Products Scorecard findings, look in November’s Convenience Store News New Product Leadership Special Edition.