Elit Rowland speaks to the key brands driving wholesalers’ sales with price-marked packs.
When we asked Booker’s chief executive Charles Wilson what he thought of price-marked packs (PMPs) at the Federation of Wholesale Distributors (FWD) conference last year, he said that they gave consumers confidence and he urged suppliers to “bring it on”.
One year on and suppliers have unleashed a frenzy of PMPs into the channel, driving traffic to wholesalers’ depots and retailers’ stores. In fact, 65% of retailers report that their PMP sales have risen in the past 12 months and 37% say availability of PMPs influences their choice of wholesaler. More recently, innovative approaches to promotions, such as AG Barr’s multi-buy mechanics on Rubicon (pictured above), have encouraged consumers to buy more while still delivering a good margin for retailers.
Tips to grow PMP sales
- Suppliers: The option of PMPs and non-PMPs will help wholesalers to cater for a diverse customer base. Promotions should be supported with POS to create theatre in-store and in-depot.
- Wholesalers: Stock PMP options for key impulse lines, such as soft drinks, confectionery, alcohol and ambient grocery. Use PoS to shout about promotions and navigate customers.
- Retailers: Use PoS to alert consumers to PMP promotions in your store. EPoS data can measure or track the success of PMPs – ask your wholesaler if they can help with this.
Earlier this year, Better Wholesaling spent a day with one retailer who stocked PMPs for almost 80% of SKUs in his store. Mr Singh of BMP Stores in Birmingham, which has a Lifestyle Express fascia, said that his customers trust price-marks so they use them as much as possible.
Wholesalers are on board, too, and Atif Rashid at Glasgow-based Alfa Wholesale says that customers don’t trust wholesalers putting prices up. “They are happy to pay more if the supplier dictates the price-point”, says Rashid, making price-marks an important part of his business.
While there’s no doubt that PMPs help to drive overall profit through increasing volume sales, with many wholesalers diversifying into foodservice and on-trade, some businesses will want a choice.
Bestway’s Muhammed Asad urged suppliers at the FWD conference last month to give wholesalers “unmarked options for price-marked packs”.
Foodservice specialist Mushtaque Ahmed, chief operations officer at JJ Food Service, which supplies cafes, pubs and restaurants, says that PMPs can be potentially harmful in his business. “If a restaurant customer sees that a sack of rice is £19.99 and they are being charged £4 for just one portion, it can feel like a rip off. What they don’t realise is that restaurant owners don’t make margin on things like lamb chops or king prawns – they make it on naan bread and rice.”
The challenge for suppliers then, is to offer wholesalers and their retail customers price-marked options for key impulse lines, offering good shared margin, innovative approach to PMP promotional mechanics, while still giving them enough choice to supply an every diversifying customer base – that’s no mean feat.