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Managing the front end is no easy task for convenience retailers. Getting buy-in from upper management, finding products to work in varying store formats and different locales, and quickly cycling new items in and old items out were just a few of the challenges cited by the c-store operators who took part in the first-ever Convenience Store News/ECRM Front End Merchandising Roundtable, held in Orlando, Fla., earlier this year.
"Managing the front end is like fashion merchandising. You have to get into hot items quickly and get out of stale items just as fast," said Dave Williamson of Jubilee Food Stores, based in Houma, La. The general manager of retail operations was one of the nearly dozen convenience retailers who attended the one-day event, held in conjunction with ECRM's Convenience and Front End Efficient Program Planning Session.
CSNews Editor-in-Chief Don Longo, who moderated the roundtable, presented results from an exclusive CSNews survey that asked convenience retailers about their front end merchandising practices. According to the study, 65 percent of c-store retailers carried more products at the front end of their stores in 2009 than they did the previous year.
Candy/gum, lighters, lottery and energy shots were the top products displayed, with energy shots, not surprisingly, the fastest growing. Energy shots also were the most successful products at the front end, according to 36.5 percent of respondents, followed by foodservice items by 11.1 percent, and other tobacco products (OTP) by 9.5 percent.
In determining which products to place at the front end, 91 percent of retailers surveyed said an item's impulse factor is most/very important, while 80.6 percent of respondents said margin. "Wow" factor, image and security/theft concerns rounded out the top five factors c-store retailers said they most consider.
One of the biggest problems with front end merchandising is there is no cookie-cutter approach, noted Marlene Druschel, buyer for United Refining Co. of Pennsylvania's Kwik Fill and Red Apple stores. "We've got stores of different sizes and in different geographic locations. Our stores in the Allegheny National Forest [in Pennsylvania], for instance, have a very different front end from our inner-city stores," she said.
The consensus among retailers around the table was the front end needs to be customized on a store-by-store basis. Nadine Greathouse, marketing manager for Phoenix-based Express Stop Inc., gave the example of a store her chain operates on a Hopi Indian reservation. The store sells more novelties and souvenirs than any of its other locations, so those items are stocked at its front end, she told the group.
Jubilee Food Stores also matches products to specific locations. Williamson said the chain recently partnered with a sporting goods distributor and started selling high-end Costa Del Mar sunglasses off counter racks at its five c-stores along the Gulf of Mexico coast in southern Louisiana; the cheapest pair retailed for $99. These stores, which attract a lot of boating and fishing traffic, also put out bins of $19.99 fishing rods this holiday season. Both products performed very well, according to Williamson.
Similarly, United Refining's Druschel said her stores near lakes and camping sites will sell worms now that she found a vendor at the 2009 NACS Show that provides a refrigerator. "We're going to try wax worms for ice fishing and then move to earthworms," she said. "There are some nice margins in bait."
Along with tailoring the front end to each store's individuality, roundtable participants said in general, innovative and unique products are what grab consumers' attention when they check out. For instance, during this holiday season, Maverik offered Snuggies, "the blanket with sleeves," and sold through its stock, said Jeff Arnold, category manager for the chain, headquartered in Salt Lake City.
Capitalizing on a major event can be profitable for convenience stores too, as Buffalo, N.Y.-based Wilson Farms found out when it sold more than $30,000 worth of Michael Jackson CDs after the singer's death in July, said Heidi Rembecki, category manager.
Geo H. Green Oil also realized this by being one of the first to put hand sanitizer at the front end during the height of the swine flu pandemic. "We put small bottles in a basket at the checkout, and they were a hit," recalled Jim Callahan, director of marketing. "We added individual packs of tissues, and they did well too."
The chain has great success selling gloves, hats and antifreeze at the front end during the winter as well. "Matching the proper product at just the right time works extremely well and almost always allows a larger gross. We refer to it as 'occasion selling,'" he said.
Williamson of Jubilee believes the c-store channel hurts itself by not investing in the inventory necessary to be successful. "You can't put just one or two of something out," he stressed. "Mass and drug [stores] figured it out, and I'm frustrated when I see those guys doing stuff we should be able to do."
C-store operators must be open to taking risks, according to Williamson, who said he's tried selling super-premium liquor such as Crown Royal and Patron in bottles displayed in a case next to the counter.
"We didn't sell a ton, but we did sell some," he told the group. "You can't get hung up on everything being guaranteed. If I think something is a hot item, I'll buy it direct as long as the price is good. You can always mark down the ones you have left."
The rest of the retailers agreed, noting sometimes an item will surprise them.
Express Stop's Greathouse said that's what happened three years ago when she discovered a local company called Laser Gifts, which manufactures solar-powered, flashing key chains that flash for up to 10 years and never need a battery.
"It's been the No. 1 seller for three years running," she said.