Single Store Owner

AUG-SEP 2016

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32 / Convenience Store News for the Single Store Owner / AUGUST/SEPTEMBER 2016 CATEGORY SNAPSHOTS GROCERY Why Your Grocery Sales Could Be Gone in a Snap Snap! Just like that, a significant number of convenience stores could be wiped out of the federal Supplemental Nutrition As- sistance Program (SNAP), sistance Program (SNAP), meaning drastic drops in their grocery meaning drastic drops in their grocery category sales, if new eligibility standards are enacted. SNAP, known in its earlier days as the food stamp program, pro- vides vides nutrition assistance to low-income nutrition assistance to low-income individuals individuals and families. and families. "Problematic" is what NACS, the Asso- ciation ciation for Convenience & Fuel Retailing, for Convenience & Fuel Retailing, has has called the proposed retailer eligibility called the proposed retailer eligibility standards, which were published in Feb- tandards, standards, which were published in Feb- which were published in Feb- ruary in the Federal Register by the U.S. uary ruary in the Federal Register by the U.S. in the Federal Register by the U.S. Department Department of Agriculture's Food and of Agriculture's Food and Nutrition Nutrition Service (FNS). Service (FNS). Here's why: • FNS' proposed rule will require partici- FNS' • FNS' proposed rule will require partici- proposed rule will require partici- pating retailers to stock more varieties of ating pating retailers to stock more varieties of retailers to stock more varieties of products products in four "staple food" catego- in four "staple food" catego- ries: meat, poultry or fish; bread or cereal; vegetables or fruits; and dairy. Specifically, retailers must stock no fewer than seven different varieties of food items in each of the four categories. Prior to the 2014 Farm Bill, retailers had to stock three different varieties in each. In addition, retailers HEALTH & BEAUTY CARE Step Outside the Seasonal Box Advanced seasonal plans work well for candy, snacks and beverages. So, why not the health and beauty care (HBC) category, too? Generally speaking, HBC has "taken a back seat in the convenience channel and often is rolled in with general merchandise, which is typically the most cluttered and least enjoyable category to shop," according to Brian DeLong, senior vice president of agency Catapult Marketing. The forward-thinking trend is to turn around the notion that HBC is just for convenience store customer "emergencies" and instead present it as a front-seat, year- round section, said DeLong, realizing "the nature of the category means shoppers need to trust that the products sold category means shoppers need to trust that the products sold are safe are category means shoppers need to trust that the products sold are safe sa category means shoppers need to trust that the products sold are safe and effective." He advises c-store operators to "focus on small sizes presented in a clean and easy-to-shop organization that convinces shoppers [the retailer] doesn't just have HBC items on hand, but they are actually selling them" and are committed to the category. Part of this commitment means managing a HBC section that goes outside the seasonal box. Paying attention to year-round sales numbers can help in this respect. Nielsen data, for instance, shows that while would be required to offer at least one perishable food item in three categories, rather than two. • The expanded requirements are not in conten- tion. What is in contention is the fact that the definition of a "staple food" item would now exclude multiple-ingredient items, like a can of chicken noodle soup or a frozen pizza. • The FNS' proposal would also add a "stocking requirement" whereby retailers would always have to have six different units of any food item in a store at any given time. So, multiplying that by the 28 staple items required, retailers would have to have a minimum of 168 SNAP items on their shelves at all times. • If 15 percent or more of a store's total food sales come from items that are "cooked or heated on- site before or after purchase," that store would be ineligible to participate. "…If enacted as drafted, our survey data shows that this rule would wipe out tens of thousands of c-stores — a very significant amount of the over 106,000 stores currently in the program," said Anna Ready, director of government relations for NACS. cough cough and cold remedy and cold remedy sales sales peak during the peak during the winter winter months, con- months, con- sumers still buy about umers sumers still buy about still buy about half as much during the alf half as much during the as much during the summer months. So, it ummer summer months. So, it months. So, it doesn't make sense to dis- oesn't doesn't make sense to dis- make sense to dis- continue cough/cold items ntinue cough/cold items after the winter season. after the winter season. er after the winter season. the winter season. Proper management of the HBC category requires a HBC category requires a "fine balancing act," said Beth "fine balancing act," said Beth ne "fine balancing act," said Beth balancing act," said Beth Noteman, senior director of teman, Noteman, senior director of senior director of category management for Lil' gory category management for Lil' management for Lil' Drug Store Products. A c-store should ideally deter- mine its right mix by weighing what is bestselling currently, what sold within the past year, and what can be sold moving forward, she explained. "If you always manage to the past numbers, you aren't giving yourself an opportunity to venture into new subcategories," she reasoned. SSO

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