Editor’s Note: The McLane/NATSO Foundation Index is one of the many knowledge resources NATSO produces in our quest to deliver solutions to help NATSO members make good business decisions.
The index is produced quarterly and offers NATSO members the opportunity to compare their average weekly convenience store purchases with those of travel plazas and truckstops serviced by supply chain provider McLane.
The most 2nd Quarter McLane/NATSO Foundation Index was recently released. Members may sign in here to read the full McLane/NATSO Foundation Index.
To commemorate the release of the recent index, McLane has shared their industry expertise again in the form of their “Ask a Category Manager” series. McLane produces this downloadable category information monthly. Over the next few days, Darren Schulte will be exploring the topics covered in the “Ask a Category Manager” series from the truckstop prospective. - AT
Snacks Are Expected To Grow At Nearly Two Times The Population Rate Through The Year 2018, What Does This Mean For Your Truckstop?
As referenced in McLane’s “Ask a Category Manager” on cookies, crackers & alternative snacks, “Overall, the snack category is one of the fastest growing and evolving categories. It is expected to grow at nearly two times the population rate through the year 2018, and 22% of snack UPCs purchased are items didn’t exist just one year ago.” (Download the “Ask a Category Manager” on cookies, crackers & alternative snacks here.)
What does this mean for truckstop operators?
The Recommendation
It means, you should increase the selection of products in your snack section. Further, you should purchase these items from your grocery supplier at the expense of your direct-store delivery vendors.
Why?
Generally grocery suppliers offer less-known but different brands at a higher profitability while direct-store delivery vendors offer big-name brands at a lower profitability model.
Why Do Operators Resist This Recommendation?
I frequently offer this advice to truckstop operators when I review their location. In return, they offer a host of reasons for not making this change, but the main reason is usually their belief that the direct-store delivery products have higher customer loyalty. There is also a concern that the big-name brands are better marketed.
The Data
If the statistic that 22% of snack UPCs purchased are items that didn’t exist just one year ago is not enough, consider this data on brand loyalty. Catalina Marketing’s Pointer Media Network in conjunction with the Chief Marketing Officer (CMO) Council studied consumer packaged goods (CPG) brand loyalty among American shoppers. They analyzed the individual buying patterns of more than 32 million consumers in 2007-2008, across 685 leading CPG brands. The study found that for the average brand, 52% of customers that were brand loyal in 2007 either reduced their loyalty or completely switched brands in 2008.
The Next Steps
Now that I’ve convinced you to make this change, (and I have convinced you, right? If not, tell me in the comments why you disagree.) I would urge you to reconsider what products and product categories should have prime positioning at your truckstop. You should consider:
- Why give up higher gross margin return on inventory investment (GMROII) vs. your grocery supplier products?
- Why give up higher gross margin dollars on items offered by both sellers?
- Why trade down your margin percent on every purchase?
More Advice
Also, do not place lower-margin products next to your higher-margin food service areas. Place your higher-margin grocery supplier snacks, cakes and cookies adjacent to profitable food service areas. This is an additional margin booster. Additionally, create focal points of alternative salty snacks like Turkey Creek, Cedar Creek flavored popcorn, and Kettle Corn.
Keep in mind, cars and trucks continue to get better mileage and one of the three major reasons for stopping on the interstate — fuel, food, and restrooms — is becoming ever increasingly less necessary. My neighbor shared with me that he can drive 600 miles without refueling in his 2014 Honda Accord Hybrid. He can drvie from El Paso to San Antonio! He used to stop four to five times to fuel, snack and use the restroom, but he now does the trip with only one or two stops. So please, work hard to make sure every stop is as profitable for you as possible.
/// Post provided in partnership with NATSO Chairman's Circle member McLane. McLane is a highly successful $34 billion supply chain services company, providing grocery and foodservice supply chain solutions for thousands of convenience stores, mass merchants, drug stores and military locations, as well as thousands of chain restaurants throughout the United States. Learn more about McLane.
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