Maximizing in-store customer spending is critical for retailers in today’s environment, where competitive pressures from online sellers and other
nontraditional outlets have been increasing.
Traditional supermarket retailers need to
double down on their operational discipline to
generate more sales from the shoppers who are
already in their stores and to keep them coming
back. According to ABI Category Leadership,
St. Louis, MO; InfoScout Calendar Year 2017;
IRI Multi-Outlet Total Store 2018, ecommerce
spending on food and beverage has risen 10%,
and sales at hard discounters and dollar stores
are growing at five times the rate of sales in the
conventional grocery channel.
Grocers saw their sales growth slow to 0.5%
in 2017, compared with 2016, and the number
of annual trips made by shoppers fell by 2.5%,
according to ABI Category Leadership, St.
Louis, MO; InfoScout Calendar Year 2017; IRI
Multi-Outlet Total Store 2018.
In many categories, gross margin and true
operating margin can vary by 20 percentage
points or more, so considering in store
expenses is key. As the top category in the total
U.S. food channel with $10.6 billion in annual
revenues, plus a top- 10 ranking in weekly true
profit (accounting for the benefits of DSD)
and turns, beer plays a key role in generating
incremental in-store sales and profitability,
Louis, MO; IRI Total US Food FY 2018; Willard
Bishop Grocery Super Study 2018.
In addition, 41% of households shop the beer
category, making an average of 14 trips per year
and spending an average of $14.26 per trip on
beer alone—with the total basket of beer, halo
items and other items totaling about $67 per trip,
according to IRI Panel Data, 2017.
In order to maximize the sales and profit
potential of this category, food retailers should
prioritize beer displays and consider how to
best deploy them. These displays are key to
driving both impulse buys and to converting
Whether customers are making a U-shaped trip
through the store or shopping on a “racetrack”
circuit, the back of the store should be the focus
for building beer displays that benefit from
the highest levels of foot traffic and visibility.
Beyond traditional lobby and racetrack
displays that are already very effective, endcap
optimization research shows that endcaps at
the back of the store have an average of 88%
foot traffic, compared with 64% for front-of-store endcaps, and the visual reach of back
endcaps, at 54%, is more than double the 24%
for front endcaps, according to ABI Category
Leadership, St. Louis, MO; Article: Endcap
Insights-Visual Reach-Ehrenberg Bass.
In the back of the store, these endcaps serve
like billboards, capturing sales from shoppers
who may not have planned to purchase beer on
When retailers feature beer in their ads, in-store displays take on even more importance.
According to ABI Category Leadership, St.
Louis, MO; IRI 2017 FY Total US Food, displays
drive a 15% increase lift in items that are
featured in ads, and beer items in both ads and
display generate 2.5 times more incremental
dollars than wine and nine times more
incremental dollars than spirits.
Additionally, beer ranks as a highly
productive grocery category for inventory
management and space optimization. It is
4th in the of SKUs generations 95% of
Category Sales ( 47.9%), 6th in Adjusted Gross
Profit per Linear Ft of Space ($10.54) and
7th in Adjusted True Profit per Linear Ft of
Space ($5.54), according to ABI Leadership,
St. Louis, MO; Willard Bishop Grocery Super
Overall, the beer display strategy should
balance financial, operational, shopper
and in-store considerations. The research
demonstrates that beer displays should be a
high priority for operators, week in and week
out. They can be a powerful—and profitable—
tool in stemming sales erosion.
A RELIABLE STRATEGY IN THE BATTLE TO STEM IN-STORE SALES EROSION
beer displays dri v e store trips, profits e d spl ys dri v e tor rips pr ts