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CSP Category Management Handbook, 2012

CSP Published in the Category Management Handbook, 2012

I’ve identified three overarching trends.

1. Increase demand in the energy category
2. The challenge of dealing with product recalls
3. Great potential for allergy product sales

1. Any advice to c-store owners about how to best take advantage of energy product potential?

Yes, retailers have a three-fold opportunity to capitalize on the potential profits from the energy category. First, is to optimize the assortment to include the best-selling energy shots and energy strips such as 5-hour ENERGY® & Sheets Energy Strips™. Product sells best when it is accessible and visible at eye level. Second, is to price the product competitively within the local market and to offer a Buy 2 for $X everyday value to increase the overall customer transaction size. Retailers understand price elasticity of demand across the categories and leverage that knowledge to develop and refine everyday and promotional pricing strategies. Pricing and category destination signs heighten the visibility in-store. Third, is to merchandise it appropriately near the front register to enhance visibility and capture impulse sales. Tracking channel trends and the impact of competitor merchandising efforts on those trends to determine whether/when to adjust their own merchandising-related efforts. As well, secondary locations are crucial to optimize sales of the energy category. Finally, is to promote it throughout the year using multiple vehicles such as pump toppers and to cross promote energy items with other best-selling items.
2. Any other products to watch for in that category?

It is important to stock the best sellers, i.e. 5-hour ENERGY®, but to ensure new items are also offered. Kraft’s Mio and Sheets Energy Strips™ have both put forth significant advertising dollars which is driving consumers to retail stores. Savvy retailers follow these new item trends and aid in creating excitement at the retail level.
3. Could you elaborate on how the recalls have affected c-store owners?

Yes, c-store owners have had empty pegs, shelves and lost sales due to manufacturer’s inability to ship certain items. Retailers have had to be innovative in solving the implications from this on-going recall. Many retailers have sought multiple solutions such as double-facing like items and adding new items to their sets. HBC still represents the second best Gross Margin category in-store so successful retailers are prioritizing these solutions.
4. Do you know of any retailers who have handled the recall situations particularly well?

Western Convenience is a great example of executing innovative solutions. Based in Denver, Colorado, Western Convenience worked with their wholesaler and their category captain, Convenience Valet®, to build new planograms which optimized in-stock items not impacted by the recalls.  Huck’s is also a great example of a retailer who has partnered with both their wholesaler & their HBC supplier to identify suitable replacements for short term solutions.

CSP Trends

The overall health & beauty care category continues to weather a tumultuous season. Gains within HBC have come from increased demand in the Energy Category, growth of existing SKUs, price increases, and innovative new delivery formats such as Sheets Energy Strips™. HBC has also seen newly introduced health & wellness products such as Protein To Go™, a pure protein shot with zero sugar or fat, performing well and filling the need for healthy snacks. Additional gains in HBC include analgesics overall, with more and more retailers recognizing the value of stocking additional blister packed products.  However, manufacturer recalls and production issues have left many retailers with empty pegs.  Savvy retailers partner with their wholesaler and/or their HBC category captain to find suitable replacements during this unprecedented situation of high out-of-stocks. Finally, due to the unseasonably mild winter, allergy season has arrived early and doctors are predicting the worst allergy season in over 10 years. Proactive retailers and wholesalers will want to be prepared and increase their inventory of allergy related products to include counter displays, clip strips and recommended allergy OTC medication within their HBC set to optimize sales.




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