While our Easter Egg sales were okay and card sales increased more than 10%, it was not until we discounted our Easter Egg range on the Tuesday before Easter that we started to move the volume of eggs we had hoped and planned for.
Our Easter Egg range was excellent. We had it located in prime position for a month prior to Easter. The display itself was compelling – colourful and pitched at various shoppers. Our price policy was competitive, a tad under RRP.
What hurt us was the majors in the shopping centre discounting their Easter Eggs 20% and more … and considerably earlier than usual – one even three weeks before the season. Another was discounting by 50% a full week before Easter. These are discounts off a better buy price base -the negotiating power of a mass merchant is much better than any newsagent or newsagency group but I do not begrudge them that.
They were supporting their discounting with catalogues and, in some cases, ads in the local newspaper – probably paid for by their suppliers. I do not begrudge them that either.
Given that it is just about impossible for us to carry Easter Eggs where the products themselves are the point of difference, we either accept that we will not sell the stock or we join in. So, we joined in on the Tuesday afternoon prior to Easter. It was like we flicked a switch. Customers were spending $50 and even $100 at a time.
Talking with one customer who was in the centre daily, they knew that we would have to drop our price. Their backup was to shop at a major. While the major did not have exactly what they wanted, it would do … because all the kids are going to do is eat it in a day.
For newsagents, Easter Eggs, like everything we sell, are about margin. We need the margin because our our business model. For mass merchants, Easter Eggs are about volume. They want the traffic generation. Also, they make money outside of the actual margin from the sale at the register.
My view is that mass merchants have killed what was a golden egg at Easter for all retailers. Their lust for low margin volume has hurt all retailers including themselves. While shoppers will like this, invariably fewer retailers will carry Easter eggs and this is when margin will creep up and shoppers pay the price, once again.
My concern about Easter Eggs has a magazine connection. Every bundle of current issue high volume titles priced at a discount educates shoppers to look for these deals. I hope that publishers pull back rather than increase their discounting commitment. However, they appear to be ramping this up this year.
I was talking with a newsagent this week who does not reorder an issue of a magazine when they sell out. They took this position after receiving knock backs from both distributors to most extra stock requests. They had become disillusioned given that 19 out of 20 requests were knocked back with the message that there was no stock available.
