Darrell Lea had a truck on the road in Melbourne yesterday ready to respond to calls from retailers in need of more of their Father’s Day Dad’s Bags. One of our locations, new to Darrell Lea just last month had sold out and within a couple of hours of calling we had the stock we needed – in time for the afternoon rush. This is excellent customer service from Darrell Lea.
For years our only confectionery offer has been Darrell Lea because we felt it offered a crucial point of difference. Also, we had outlets nearby which offered the traditional impulse confectionery and gum products.
Several months ago we extended into gum and products from the Natural Confectionery Company. While they have done well, the introduction of Cadbury impulse lines – Freddo and Caramello Koala – has been considerably more successful. We currently have these located on the corner of our counter, near our busiest lottery terminal. We know we will need to move these around so that our customers notice them.
Experts in the confectionery area tell me that the market for these bite-sized items is strong in businesses like newsagencies where the shop is located near a car park (as we are). Shoppers are more likely to buy something to snack on as they walk to their car when leaving a centre than when walking into a centre.
We still promote Darrell Lea on the stands and at our counters. The range continues to drive destination business as well as impulse business.
Father’s Day preparations kicked up a notch for us at newsXpress Forest Hill this week with the arrival of our supply of Dad’s Bags from Darrell Lea. Even though the majority of Dad’s Bags are sold in the last week of the Father’s Day season, we like to get them out as early as possible to signpost the Father’s Day gift area. The bags are featuring in plenty of media outlets – making them well known. See the Austereo website fand the Baby News website for two examples of this.
For those who have not seen the Dad’s Bags, they have a selection popular Darrell Lea items. In our store we have two price points – $20 and $30. They are a very easy gift.
Darrell Lea is using smart attractive counter units, as shown in the photo, to help us introduce new products at the counter and thereby drive impulse purcahses. The Espresso Crunch is a stylish looking product. We have it at our lottery counter where we know Darrell Lea product sells well. Now if only they would develop a free standing slim floor unit which we could locate at register points for promoting top selling products.
Further to my blog post Friday about gum sales falling in newsagencies, the latest issue of Convenience World magazine reports that confectionery sales were up 2.6% in c-stores in the March quarter. While this does not break gum out, even for the overall category, c-stores are reporting better numbers than newsagents.
While I am no expert in this area, I suspect we need to change the way we merchandise gum – smaller, more modern, display units at each register rather than a single, older style, unit on the counter as many newsagents have today.
The same issue of Convenience World reports that magazine sales in c-stores fell by 11% in the March quarter and that on a moving annual total basis (to February 15) they are down 9.1% for the year to March 31, 2009. They also report a 5.6% decline in newspaper sales for the quarter and 7.9% MAT to February 15. These are interesting numbers to compare to the benchmark study results released earlier this month.
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.
Click on the image to see a larger version of the Chocolatier Easter Egg display our team has created at our Sophie Randall Melbourne Central store. Customers entering the store are greeted with this table. We experiment at our Sophie stores with fixtures and display concepts with a view to using these in our newsagencies. The table we have used for the Easter Egg display works well in newsagencies.
I was surprised to receive the email today announcing that magazine distributor NDD is to distribute Sultry Sally potato chips. Magazines and potato chips are an odd mix. This brand launched in Safeway and Woolworths earlier this year. While some newsagents would be happy with a supermarket line, I am more included to hunt out chips not being sold in a supermarket.
Chewing gum is the most efficient segment of the confectionery department in the newsagencies from what I have seen in recent sales data. Sales are strong, stock turn good and return on real-estate excellent. Gum outperforms chocolate bars in return on investment in the stores for which I have data. This is because of the space taken, faster stock turn and easier stock management. We have been looking at this for our Frankston store where we are allocating less counter space for confectionery and had to cut some lines.
While gum goes against the idea of driving a point of difference, the data shows it works so why not? There are deals around too for good volume business.
Our Forest Hill team has rejigged our counter now that our Darrell Lea Christmas stock has arrived. Even though margin on Darrell Lea is slimmer than magazines, it is an important range to have here at the front of the shop next to our main lottery counter.
This display attracts good impulse business – as does the Herald Sun stand you can see in the photo.
This new gingerbread product we have found for Halloween brilliant designs and a great taste. This is a perfect counter offer to fit with our Halloween promotion. From what we understand, we are the first newsagency to offer this line. We are looking forward to seeing how it performs. Our fall back position is that we get to eat what is left. Yum! Seriously though, it is good to have some depth to our Halloween offer beyond witches hats and other costume items.
We sourced this product from Vicki’s Bickies in
The small range of Darrell Lea confectionery and the colourful pads from For Arts Sake are proving to be the best counter offer at our Forest Hill store. While we have short-term feature product on the counter proper, these two rows of products are consistent performers. They have good price points and are easily understood – critical in a counter offer where a customer will take a few seconds to add to what they are already buying. The success of the Darrell Lea and For Arts Sake products keep them at the counter longer than anything else.
The photo shows one of our Father’s Day displays in our Frankston newsagency. This particular display is for our range of Morish confectionery including the popular Dad’s Nuts bag. I like the products and the display because they pitch a significant point of difference from the retailers around us and a significant departure from what one expects to see in a newsagency. Differentiation is vitally important in any business, even more so in newsagencies. As more retailers have taken on products traditionally exclusive to newsagents we have neglected to chase differentiation.
Dad’s Nuts from Morish gets my vote for the best Father’s Day product for 2008. The name is brilliant, value fantastic, product quality excellent and the packaging stunning. Customers are loving Dad’s Nuts. I have spoken to several newsagencies and sales are good. When I first heard the name I thought people would react negatively. The opposite happens – people laugh, the love the name. While this is a newsXpress exclusive, I am yet to see a new Dad product so engaging.
Some suppliers just don;t get the importance of theatre in retail. While we have had our Father’s Day cards out for two weeks, and they are selling well, some suppliers are yet to get stock for this season to us. One supplier, Darrell Lea, tells us it will be another ten days before we get the stock. While they will say that most sales are in the last week, they have missed any opportunity to change that. They have also missed an opportunity to be part of the theatre of the season. We are playing with an alternative Father’s Day confectionery offer (Dad’s Nuts from Morish) and that stock arrived last week.
Three new products from Darrell Lea are a welcome addition. They lend themselves to location at the counter as impulse items even though the company prefers us to use their fixturing. They’re selling well. The packaging reminds me of Thorntons brand.
We have Darrell Lea’s Mum’s Bags at the front of our newsagency as part of our Mother’s Day offer. While they are visually attractive, they don’t pop as they have in years past. These Darrell Lea gift bags are an important part of the seasonal gift mix for us since the retailers around us play me-too with Cadbury products.
Excuse the average display on then table – our merchandising unit from Darrell Lea went missing.
Wow, if the merger proceeds they are likely to become what the Motley Fool calls a confection powerhouse. Newsagents are challenged when dealing with these mega FMCG suppliers: Mars, Wrigley, Cadbury. We want to have their products because they are what consumers know yet we cannot negotiate terms which enable us to be truly competitive. It’s a catch-22.
The alternative is to go with second and third tier brands. That does not work unless they have a local connection and or are of superior quality.
At the small business end of town we have to provide a point of difference beyond service to enable our businesses to grow as much as they are able. The difference has to be reflected in our products and since we cannot do it on price, for most items, we will have to do it on range.
This Mars / Wrigley merger, if it proceeds, will encourage some thinking newsagents and other small business operators to look around for a product based point of difference in the confectionery area. We are playing in this space in two stores with some success but it’s too early to share details at the moment.
I’m not advocating blocking the merger – they can do what they like. I’m just musing about implications.
Despite a stunning display, Easter eggs did not work as well at our Frankston store as we expected.
It was our first Easter since buying this business and eggs were a new category for the business. We did a best guess purchase and got it wrong. What is odd is that we took the same approach out at Watergardens and there it worked a treat.
While there are obvious demographic and store location differences, there are other boundaries for us to consider. The Watergardens shop-fit positions our business as having a broad product base. Our Frankston store, yet to be re-fit, is a traditional newsagency. This traditional fit is part of the issue – we need to not push the product mix boundaries too much until we reposition the overall business.
We have added other categories in Frankston with success since taking over: ink, plush and books. We felt invincible. The easter experience has been a lesson for us.
Easter has been a lesson – not only for the Frankston experience but also for the overall soft sales due to prices and weather.
We have $1,000 in eggs left. The sale started Thursday – this is the best day of the week for moving discounted stock.
Darrell Lea came up with some nice looking packaging for their Easter egg product. The design was let down by poor adhesive – many boxes popped open, exposing chocolate and making some product unsaleable. Darrell Lea sent out double sided tape to fix the problem but to use this retailers had to put their hands into the boxes – probably in breach of food handling regulations.
Now that the heat in Melbourne is finally fading people apparently think it’s safe to buy Easter eggs.
With more than $20,000 invested in easter chocolate across a few stores I’m relieved. Some customers coming to the counter with an armful of eggs said the heat made them hold back.
Sales were great yesterday and I’d expect them to be even higher today.
Easter card sales have been fantastic. I’d expect a sell through of at least 80% in our stores. Plush has been just as good. neither cards nor plush suffered as a result of the heat.
We have a new range of small pads at the counter and, as with the last range they are selling well. They work better for us than major brand candy – because they are unique to us in our centre whereas many others sell the major brand candy around us.
At my Frankston newsagency, where we have a confectionery story at the counter, we are reconsidering purely on a return on shelf space basis.
It doesn’t make sense to me that we think of ourselves as a convenience store or supermarket when it comes to this candy at the checkout.
Our Frankston newsagency has a column in front of the counter. It impedes traffic and is an eyesore. That’s one view. As the photo shows, there is another way to see this column – as something to be embraced and made a hero.
Simon, manager of the store, came up with the idea using the column to to promote our new line of Easter eggs as well as some of our Easter plush. The display has been up for four days and is working well.
While we’d prefer the column was not there, we have been happy have something which we can embrace in a bold way and for commercial value.
We have eggs on all four sides of the column and on a stand in front – not shown in the photo.