Single Store Owner

OCT 2016

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42 / Convenience Store News for the Single Store Owner / OCTOBER 2016 CATEGORY SNAPSHOTS TOBACCO Stiffer Penalties Imposed Retailers that violate federal tobacco regulations will now face stiffer penalties. According to the According to the Food and Drug Administration's (FDA) Center Food According to the Food and Drug Administration's (FDA) Center and Drug Administration's (FDA) Center for Tobacco Products, the Department of Health and Human Services recently issued a new regulation that adjusts for inflation inflation the civil monetary penalty the civil monetary penalty amounts amounts (CMPs) assessed against to- (CMPs) assessed against to- bacco bacco retailers for violations. retailers for violations. Under the revised amounts, a retailer that receives two violations within a hat that receives two violations within a receives two violations within a 12-month period will now face a $275 2-month 12-month period will now face a $275 period will now face a $275 penalty, penalty, an increase of $25 from the pre- an increase of $25 from the pre- vious amount. And the changes increase ious vious amount. And the changes increase amount. And the changes increase as the number of violations increases. s as the number of violations increases. the number of violations increases. For example, a retailer that receives six or For example, a retailer that receives six example, a retailer that receives six violations within a 48-month period olations violations within a 48-month period within a 48-month period will now face an $11,002 penalty vs. ill will now face an $11,002 penalty vs. now face an $11,002 penalty vs. $10,000 previously. BEVERAGES How to Energize Energy Drink Sales A two-pronged research study of con- sumer and convenience store retailer insights conducted in conjunction with Carbonview Research, a sister company of Convenience Store News for the Single Store Owner, revealed that energy drinks are a "destination category" for c-stores, with 28 percent of consumers purchasing the beverages. According to the study, consumers purchasing energy drinks are also buying salty purchasing energy drinks are also buying salty snacks snacks purchasing energy drinks are also buying salty snacks (53 percent), sweet snacks (50 percent), prepared foods (30 percent), (53 percent), sweet snacks (50 percent), prepared foods (30 percent), meat snacks (17 percent) and fresh foods (9 percent) alongside their energy drink purchase, giving c-store retailers the chance to capital- ize on increasing their basket size, according to Laura-Lynn Freck, shopper insights manager for Red Bull North America, who presented the research findings during the recent 2016 Convenience Store News Beverage & Beer Retailing Summit. One way to do so is with bundling. Heavy energy drinkers will bundle their energy drink purchase with either a salty or sweet snack, or a soda. Light energy drinkers will bundle their energy drink purchase with a sweet snack, soda or prepared food item. Heavy buyers are de- fined as frequenting a c-store for these products several times a week. Energy drink buyers are more likely to purchase "energy bundles" and equally likely to purchase "beverage bundles" with a snack A full list of the increased penalties is available at http://tinyurl.com/zyjjgek. The adjusted amounts apply to CMPs assessed after Aug. 1, 2016, even if the associated violations occurred as far back as Nov. 2, 2015. In other tobacco regulatory news, the FDA an- nounced in September that it had issued its first warn- ing letters to retailers in violation of the new provisions of its final deeming rule, which went into effect Aug. 1. The deeming rule extends the FDA's authority to all tobacco products. The agency took action against 55 tobacco retailers for selling to minors the newly regulated tobacco products — including electronic cigarettes, cigars and e-liquids. During compliance checks at major national retail chains, tobacco specialty stores and online retailers, children were able to purchase some of these products in a variety of flavors that appeal to youths, including bubble gum, cotton candy and gummy bear flavors, the FDA stated. (76 percent) or prepared food item 76 (76 percent) or prepared food item percent) or prepared food item (57 percent). 57 (57 percent). percent). Freck left summit attendees with these six key energy drink takeaways: x six key energy drink takeaways: key energy drink takeaways: • Foundation. Foundation. • Foundation. Foundational attributes are a key area retailers need to perfect, in order to y key area retailers need to perfect, in order to area retailers need to perfect, in order to build loyalty with shoppers. uild build loyalty with shoppers. loyalty with shoppers. • Function. unction. • Function. Energy still holds a functional niche, leading it to be more of an occasion- che, niche, leading it to be more of an occasion- leading it to be more of an occasion- based beverage. ed beverage. • Trip Driver. ip • Trip Driver. • Trip Driver. Driver. Energy drives bigger baskets in the store. store. Heavy energy buyers are far more likely to Heavy energy buyers are far more likely to also be heavy buyers of snacks and other beverages. • Mission. Forty-two percent of energy purchases only have energy in the basket, the highest ratio out of beverages and snacks in the c-store environment. • Merchandising. Merchandising snacks and beverages together can lead to more purchases, specifically at the counter, the foodservice area or up front. • Bundles. New opportunities are with prepared food and light energy buyers. A key time for energy bundles is between 10 a.m. and 2 p.m.

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