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6 steps to running a successful snack category

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026_Fast_YCM July 2014_Snacks category reportThe snack category is evolving, and although it still features the mainstays, including chips, cookies, and crackers, innovation is popping up in the c-sector, including more ethnic flavours and health-conscious options.

So how can convenience stores adapt to these changing habits and cater to their snack-seeking customers? Ray White of Movie Source Convenience and Video has done just that at his Agassiz, BC store. Here’s his step-by-step guide.

Step 1: Adapt to change 

A couple of years ago, Movie Source Convenience and Video was a video store that happened to have a few snacks and beverages for sale. But when White looked at the long-term viability of video rentals, he knew he had to up his convenience game. “We slowly changed the store over to convenience. We took our revenues up 500-600% in just over a year because of the switchover.”

The movie selection created a unique opportunity for White, who knew that his customers would appreciate a one-stop shopping experience. “We found that when people were coming in for movies before, if we didn’t have the snacks they wanted, they just wouldn’t buy anything and they went to another store,” says White. “But by bringing in all of the chips and beverages and still offering the movies, we found that benefitted us the most.”

Now, customers can purchase two bags of chips for $5 or $6, depending on the brand, or they can bundle a bottle of pop, a bag of chips, and a movie to get a complete package for a movie night at home.

Step 2: Invest in efficiency

Investing in more efficient beverage coolers was a no-brainer for White, who believed in improving the overall shopping experience for his customers. “Last year, we had nine coolers in here, so last July, we installed a 10-door cooler vault to get rid of all those individual coolers. This saves us $600 on our power bill every month. By putting that in, our beverage sales went from $1,300 per month to almost $9,000 per month.”

White used this opportunity to promote co-purchases between the snack and beverage categories with smart merchandising decisions.

Step 3: Get in the zone

“The movie section helps with snack sales and vice versa,” says White. “We run a deal where customers can purchase chips, pop, and a movie for $11.99, so that really helps. Everybody in town knows we always have our chips on deal, and they’re positioned in the store so they’re in the areas with the highest traffic. You can make great margins in the snacks category.”

White suggests moving secondary displays around to see where they’re most successful. He admits the best spot is always right at the till, but that interrupting the path to the beverage cooler can be effective, too. “Sometimes we’ll move a chip display towards the walk-in cooler so people will see it there, too. Why not have a secondary display in addition to the regular rack of chips? This way, if someone is going to grab a carton of milk, they’re also going to pass a display of beverages, a nut rack, a meat snacks display, and possibly a chip promotion, too.”

Step 4: Try something new 

White is a big believer in innovation, and will always make space for a new product. “If a supplier has a new product, we will try it and see if we can gain some traction with it. If we don’t see any traction within three months, we take it out, but then we’ll try it again in a few months. The demographics are constantly changing. We had Riceworks in here before and they never moved, but we put them back on the shelves last summer and they moved very well,” he says.

Step 5: Partner up 

“I think the meat snacks category is growing. I give the best rack positioning to the reps I see most often. If I’ve got a rep who’s in on a weekly basis and is taking care of his or her product, it’s going to be in a more prominent spot. Lack of service is a big problem these days.” The same goes for other categories, says White, which is why he tries to make the most of relationships with sales reps, calling good communication a win-win for both businesses.

Step 6: Stock up

As with any category, avoiding an out-of-stock scenario is essential. “If we don’t have a product, customers are going to remember that and they won’t come back if they’re looking for it again. I always train my staff to never say, ‘We don’t carry that product.’ Instead, they say, ‘We’re out of that product right now, but there will be more coming in with the next delivery.’ Then they write that down and I know to talk to the rep and request to have that product brought in.”

By working closely with his supplier reps, trying out innovation, and always offering a deal, White has set his store apart from the competition and is known in his community as the one-stop snack and entertainment shop.