Independent retailers have borne the brunt of a flattening soft drinks market - with sales plummeting by double digits over the past year, analysis by The Grocer reveals.
Sales of carbonates through indies have fallen 13.5%, despite overall market growth of 2.8% on volumes up 0.6% [Kantar Worldpanel 52 w/e 20 January 2013].
In sports and energy drinks, the decline was even steeper, with indies’ sales falling 15.5% against a market that grew 4.7% on volumes up 1.9% [Kantar Worldpanel 52 w/e 17 February 2013].
“We didn’t have a summer last year, which was definitely a dampener,” said Zameer Choudrey, CEO of cash & carry giant Bestway, which experienced a 5% fall in soft drinks sales last year.
“Of course the expected olympic uplift didn’t happen and then we have factors like the better price manufacturers are giving retailers like Poundland. The rate they are giving the multiple retailers is also stronger than the rate they are giving wholesalers. That’s a factor, too.”
The price of a single 330ml can of Coke on Thursday varied from 39p in 99p Stores to 69p in a Sainsbury’s Local. Most indies stock the 59p price-marked can. When it came to multipacks, the differential was even greater. Asda was selling an eight-pack for £2.00 [Brandview.com], making the price of a 330ml can just 25p (see table). Discounters Poundland and Poundworld were also offering three 330ml cans of Coke for £1, ie 33p each. And similar differentials were found on cans of Red Bull.
“If people can go into Poundland, B&M Bargains or Aldi and buy a multipack for those sorts of prices, that will impact on independents,” said Kash Khera, director of fast-growing independent chain Simply Fresh. “The weather has been a major factor as well. Five or 10p extra for an impulse product will not deter thirsty people.”
Coca-Cola Enterprises puts the decline in sales through indies down to the weather, declining store numbers and “fragile” consumer spending, but is rolling out a special 1.75-litre format for convenience retailers to differentiate the channel from larger stores.
When The Grocer broke news of the new format for c-stores in January, some claimed the move would not help them compete with the multiples but the MD of a leading c-store chain said: “We often slam suppliers for never doing anything for our sector so it’s good that Coke is looking to try something.”