Price marked packs are now essential to convenience retailing, providing shoppers reassurance they are getting value for money. Asian Trader finds out more.
Price-marked packs are now a core of the independent retail landscape, with 82% of consumers seeking them out whilst shopping, and 61% believing that they offer better value for money (HIM!).
Not only are they seen to provide value, they also help attract the consumers attention on the shelf amongst others and help to influence the purchase.
More than two thirds of shoppers buy PMPs in convenience stores as competitive pricing encourages impulse sales (Him!).
As well as offering good value, PMPs help retailers build a sense of confidence and trust with shoppers, with half saying PMPs reassure them that they are not being overcharged (Him!).
Currently, 68% of retailers stock a selection of price marked packs as part of their confectionery offering (Him!).
Price-marked soft drinks are delivering 26% more value than plain packs and driving growth by 6%, therefore are vital for retailers to drive sales (IRI).
PMPs provide customer confidence in brands and help to increase basket spend, with 68% of UK shoppers likely to compare prices very carefully (TNS) and 44% of shoppers more likely to buy a product if PMP is visible (HIM!).
Price-marked packs continue to play a strong role in convenience outlets by delivering a greater perception of value to consumers, with 76% of shoppers saying PMPs help a convenience store price image and 38% of shoppers agreeing that PMP’s reassure them that they are not being overcharged in a convenience store (HIM!).
Similarly, 21% of shoppers said they wouldn’t buy a soft drink from a convenience store if it wasn’t a PMP and 22% of convenience store shoppers buy PMP’s ‘every’ or ‘most times’ they visit a store (HIM!).
Rich Fisher, Category Development Manager at Red Bull UK, says The Red Bull Core 4 is the essential product range to stock, available in both PMP and non-PMP formats, and includes Red Bull Original 250ml, 355ml, 473ml and Red Bull Sugarfree 250ml.
“Retailers that stock PMPs help to deliver choice to shoppers,” commented Fisher. “If retailers promote the benefits of PMPs to their customers, they will help drive ROS, and consequently help their customers to promote the benefits in their stores. Additionally Red Bull recommends that retailers stock price-marked packs across best-sellers at all times, to demonstrate range and offer customers choice, whilst driving cash ROS.”
Value for money
“Price-marked packs have become an ideal tool to help wholesalers and retailers grow their sales. Value for money plays a big part in consumers’ shopping decisions, and PMPs are a great way to showcase great value deals,” comments Amy Burgess, Senior Trade Communications Manager at Coca-Cola European Partners (CCEP). “PMPs are also an effective way to encourage consumers to trial new products, thanks to the perceived value they offer.”
Research by him! shows that almost half (43%) of shoppers claim that they’d be more likely to try a new line if it was sold in a PMP.
Burgess says it is important to keep well stocked on PMPs for low and zero sugar products such as Diet Coke and Coca Cola zero sugar.
The acceleration of low and zero sugar variants in the grocery and convenience channel has continued, with the health and wellness trend influencing purchasing decisions. For example, Coca-Cola zero sugar is the fastest growing cola brand in the convenience channel up 40% (Nielsen). Therefore, stocking up on PMPs for these products will help to boost sales, Burgess recommends.
“Choice is playing an important role in driving growth within soft drinks, and it’s therefore worth stocking a wide variety of price-marked products to make the most of the opportunity presented by these formats,” Burgess comments.
She suggests retailers place lower and zero sugar PMPs next to great tasting original variants, e.g. Coca-Cola original taste should always be stocked next to Diet Coke and Coca-Cola zero sugar.
“An irresistible offer can often encourage a shopper to buy an item they had no intention of picking up when they entered the store, and PMPs are an ideal way of presenting great perceived value to consumers,” says Burgess. “Therefore, considering second sightings of PMP offers, for instance, close to the entrance or by the check-out, can help retailers increase their sales.”
Retailers are at the heart of CCEP’s price-marking strategy, Burgess claims. PMPs are provided at a price that offers a fair and competitive margin that helps to increase consumer appeal by offering a great perception of value, whilst allowing our customers to reap the full benefits of increased sales, she says.
“While our PMPs are designed to provide an affordable single price point, we also offer plain packs across all of our formats and brands to help retailers choose the right option for them and, ultimately, it’s their choice as to which products they choose to focus on in store,” Burgess adds.
The growth in consumers buying PMPs can largely be put down to the trend in impulse buying, says Simon Gray, Founder and Managing Director of Boost Drinks.
“We know that this is a key trend for us at Boost, with 94% of energy drink sales being impulse buys,” Gray comments. “Price and format are key to this. Having price-marked products is important, as customers zone in on that when making fast, impulse decisions.”
This time of year, people are still clinging onto new year resolutions and a great proportion of the public commit to adopting healthier lifestyles. Coupled with research by Young Blood that has found consumers believe low sugar content is the most important factor when purchasing soft drinks, retailers should be aware of this trend and ensuring that they have healthier alternatives in sight when stocking their shelves around this time.
“Whilst all our products now have the lower sugar recipe, we will endeavour to ensure all new variants of Boost energy drinks will be completely sugar-free going forward, to ensure that we are bang on the trend for those conscious of their sugar intake,” adds Gray.
For example, when Boost launched the limited-edition Cosmic Glow 250ml SKU a couple of months ago, which was a sugar-free mix of grape and cherry flavour, it flew off the shelves.
“As an independent business ourselves, Boost Drinks has always understood the importance of PMPs for the independent sector, which is why we offer every single one of our energy, sport and protein drinks as a PMP,” comments Gray. “This is a simple way a retailer can gain the trust of their customers as it gives shoppers confidence in the store’s pricing in comparison to larger outlets and will ensure that consumers look to their local retailer when making purchases.”
In convenience, size is key to maximising sales of soft drinks, Gray advises. IRI data reveals that 250ml and 500ml SKUs account for three quarters of energy drink impulse buys because they are easy-to-grab products that people will pick up on-the-go. Boost offers its Boost Energy range in both sizes across a number of flavours to cater for this consumer trends.
Twice last year, Boost offered a promotion that allowed retailers to buy 12 bottles for the price of 10.
The promotion was available across 500ml Energy Original PMP SKU to drive incremental profit opportunities for retailers.
Boost is currently running the offer again until March.
Over the same time period Boost is offering one litre Energy Original SKU as a £1 PMP.
A host of the country’s leading independent convenience retailers have driven increased sales of smoothies thanks to a partnership with cold-pressed smoothie brand Savsé.
Sixteen retailers from key symbol groups including Londis, Budgens and Best One as well as unaffiliated stores took part in the six week partnership which saw all stores trial the brand’s new range of 250ml PMP smoothies.
The PMP range is available now in cases of six across Savsé’s best-selling smoothie lines including: Core smoothies – Super Orange, Super Green, Super Blue (priced at £2.49 PMP) and Protein smoothies – Protein Rise and Protein Punch (priced at £2.99 PMP).
Avtar Sidhu, St John’s Budgens, Kenilworth who took part in the trial says: “Savsé is a great product and our customers really bought into it and liked it. It really does stands out in a crowded market. It’s something that is going to be permanent in our store.”
Trialist Dave Hiscutt, Londis in Weymouth believes there is a real appetite from his shoppers for premium smoothies now. “Savsé definitely appeals to a wide audience and there is a much larger market for this sort of product than there ever used to be. Everyone wants to be healthier.”
Retailer Del Athwal from Shop Around in Kent thinks the Savsé PMPs and case size is a really attractive selling point for retailers like him. “One of the biggest things for us and other retailers is having the price marked packs. Smaller case sizes are definitely a plus for us too as we like to order frequently and often.”
Price-marked packs are still a key driver of impulse sales in convenience and Burton’s Biscuit Company – baker of household favourites including Maryland Cookies, Jammie Dodgers, Wagon Wheels and Fish ‘n’ Chips – is tapping into this demand by offering a wide range of PMPs across its leading brands.
The market for price-marked packs remains hugely important in driving the impulse sector. Many shoppers look to PMPs as reassurance of value, with PMPs of bestselling brands meeting this demand.
“Burton’s Biscuit Company recognises the important role that PMPs play in offering shoppers reassurance when it comes to value, and we will continue to support the sector with bestselling products and key NPD,” says Jeremy Peters, Head of Category & Insights at Burton’s Biscuit Company.
“Manufacturers need to ensure their bestselling SKUs are available as PMPs, so that retailers can stock up and capitalise on the impulsive nature of the biscuit category, and the increased rate of sale and profit that we know PMPs deliver.”