The thorny issue of suppliers offering significantly better terms to multiples than to their independent customers has reared its head again, with particular regard to the issue of price-marked promotions.
As outlined in The Grocer last week (‘Mind the gap’, April 9, p36), Kraft Foods was on the receiving end of the independents’ ire. It is generally accepted that price-marking is viewed as a popular promotional mechanic for independent retailers, so long as they feel that those prices remain reasonably consistent with the prices of packs sold to the multiples.
The Grocer talked to independent retailers in Northern Ireland at Holmes Wholesale Services’ depot in Ballymena, County Antrim, to get their views on price-marked packs and promotional mechanics - and found a fairly diverse range of views. Niall Patterson, owner of XL Stop & Shop in Cloughmills, said that while he found price-marked stock did help to deliver sales increases, it was not his preferred type of offer.
Patterson said: “Margins tend to be lower on price-marked stock, so, although it does boost sales, it is often difficult to find the right balance and drive real profit. I would rather have a straightforward money-off offer where I can easily see the benefit. If suppliers set the price too high, then it won’t make my shoppers want to buy it.
“At the end of the day, we have to sell the stock, so the most important issue for me when choosing a cash and carry is not the offers, but finding somewhere you can get everything that you need and knowing that it will be there when you need it.”
Alice McCann, owner of the Glenone Service Station in Portglenone, said that price-marked promotions were an important driver for her customers.
She explained: “We are always looking for the best deals for our customers, and price-marked packs are usually pretty good.
“Running a forecourt means that impulse lines are a key aspect of our business, so products with a clear price mark do seem popular with the customers who are looking to get what they need and get back on the road quickly.”
However, money-off was the key mechanic for Bertie Warwick, owner of The Kandy Shop in Randalstown.
He said: “As a speciality confectionery retailer, margins on most of the products that I sell tend to be very low in the first place. I would have to sell a hell of a lot of sweets to gain any advantage from price-marked packs.”