Get Your Snack On

Published in CSP Daily News

Albertsons Express enjoys sales boost from multi-vendor endcaps

MINNEAPOLIS -- There's nothing revolutionary about the goals Albertsons Express had when it decided to try snack multi-vendor endcaps (MVEs) in their stores earlier this year. The chain, part of Minneapolis-based SuperValu since May, wanted to provide highly impulsive, profitable merchandise at key points of impact in stores to quicken turns, increase profits, reduce labor and increase visibility.

What is nearly revolutionary are the results the company has seen. From May 1 through October 31, sales of these SKUs are up 32%, or $111,000. Unit movement [image-nocss] is up 100,000 units, or 27%, and gross margins are up 34%, or $50,000, averaging just about 42% on a gross-margin percent basis, said Mark Schumacher, director of fuel management and convenience operations for Albertsons, during a CSPNetwork CyberConference titled Snacking Strategies Finding Growth in Candy & Snacks.

Schumacher said he got most of his information about the MVE during a workshop at the 2005 NACS Show in Las Vegas. It was soon after that he decided to join the more than 22,000 convenience-store locations that are employing the two-prong strategy that draws on the strengths of direct-store delivery (DSD) and warehouse-delivered products. An MVE brings together many of the nation's best-known brands in a single display area.

I was very impressed with what I saw, Schumacher said. We jumped in with both feet and deployed not only a warehouse snack MVE, but also a candy MVE as well. We positioned our warehouse-snack MVE at a primary or secondary endcap facing the check stand.

In four out of five subcategories, the results staved off shrinking sales in snacks overall, he said.

In the first category (nuts/jerky and popcorn), the SKUs that are on that MVE are up 24%, while the category itself, including the SKUs that were on the MVE, was only up 9%, Schumacher said. If I back away the MVE sales, my category movement was actually down just about 9%. So that's how powerful [of an impact] the MVE had to this category.

The results were similar in the cookies and crackers subcategory, which shows the MVE contributed to a 58% increase, while the subcategory overall was up slightly at 5.4%. In this case, when you back away the MVE items, my category was actually down by 12%, Schumacher said.

Two other subcategories showed even more dramatic results.

In the potato chips/snacks category, the items on the MVE contributed to a 49% increase in sales, Schumacher said. My category was down overall, including MVE items, 5.3%. You remove the MVE items, and the category was down 7.9% on a standalone basis.

Similarly with candy confection items, these were the pretzel Flips that I found on the MVE, and we were blowing those out left and right, increasing 631%, he said. But if you remove these items in the candy confections, which does not include single or king candy bars, the category was down 14%. The category without the MVE items was down just about 16%.

The only snack subcategory that did not show growth on the MVE was cereal products. The cereal items on the MVE were dilutive rather than accretive, Schumacher said. They were down just about 9%, while my category was up 5.4%. If I back away the MVE items, the category was actually up 10.8%.

When asked why snack sales were shrinking overall, Schumacher said, It gets back to promotion, and additionally, it gets back to the amount of time that the people spend along the gondola in the stores. The warehouse snacks MVE is right out front [on an endcap]. They're very easy to find, and in my opinion, they're finding these items and not shopping the gondola as much.

And perhaps just as important is the fact store employees prefer stocking the MVE compared to gondolas. The associates in the stores are thrilled to see these MVEs. They like merchandising them better, said Schumacher. They firmly believe items sell much better off of these MVEs and certainly we've seen customer acceptance of the MVE racks themselves.

For a similar breakdown of Albertsons Express' results with the candy MVE, click here to view an OnDemand replay of the CyberConference, which was sponsored by the American Wholesale Marketers Association.