Digging deeper into the newsagency sales benchmark study I recently completed, I have found that sales of chewing gum fell by more than 15% in the sample group of newsagencies. 80% of newsagencies participating in the benchmark study reported declines.
While I am not a chewer of gum, I am surprised by this result.
There may be 2 reasons:
1. Most chewing gums companies introduced large packaging with higher unit price. That may reduce the frequencies in impulse purchase.
2. The sales of chewing gums may be related to that of tobacco products.
This is a interesting post because over the last two years a particularly company have brought out numerous options for gum.
In my store people bulk at the 14 pack of gum since in came out, however when the same product contained the 7 pack of gum the sales were dynamite.
I agree with Sunny assessment on point 1, no doubt in my mind.
Derek
We have found tobacco sales down 14% and chewing gum sales down 16%, I think chewing gum and smoking go together and as people smoke less they buy less gum.
i see it as people that chew don’t smoke because they have given up ,i am one of them now my sales are going well with gum (unforunantly it is my money )
We balance the loss of unit sales by increasing price. I have found that at RRP we are far too cheap when compared to other convenience chains. I have a pricing policy whihc spilts the store items into destination, convenience and expected. Chewing gum is impulse and a convenience. Long story short we are seeing an increase in profit from this line and have not had any negative feedback.
Good point Brad- The RRP of gum does not leave much for profit. I do the same and for I sell my gum between 20 to 50 cents above the RRP depending on what gum it is.
We find that RRPs on our confectionery lines are actually Woolies/Coles RRP figures, based on the pittance THEY pay for the same goods, as opposed to a tiny outlet like ours. It’s just unfortunate that the ice cream manufacturers have their retail prices on their promo stuff, because that’s a blanket price, yet their wholesale prices vary wildly according to buying power. Needless to say, our margin for ice creams is laughable. At least we have some control over margins for confectionery, and generally ignore the manufacturers’ RRP.
Back to chewing gum products, we’ve halved our display, because sales of the more expensive lines were stagnant. Much better now with more counter space, and selling more the less frivolous lines.
Definitely, there’s less impulse buy with the bigger pack since it came out so other smaller packs move quicker now.
What is our competitive stategy for chewing gums?
Many newsagents have a simple answer, display them well.
Maybe we can have 1 or 2 smaller pack pricing on $1 or less, to maintain customers’ impluse purchase habit?
Maybe we can promote multi-packs and value packs to create a desitination?
Maybe we can do multi-buys to maintain and increase our market shares?
Maybe we can try some fancy items targeting kids and ladies?
Maybe GNS can provide support and incentitives for above operations?