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NEW YORK -- A study by Deutsche Bank shows American retailers are aware of a consumer shift away from shopping in convenience stores and a rise in buying confectionery items with other food in larger stores, Confectionerynews.com reported.
The change may have alarm bells ringing with confectioners as further doubts are placed over yet another of their reliable markets and sources of income.
The confectionery industry places great stock in consumers buying their candy along with beverages and snacks on impulse in convenience stores and gas stations. Retailers feel that people are now buying for value over convenience, yet value is a quality that is diminishing in this channel, reported Confectionerynews.com .
At the moment, retailers are merely speculating, but they are concerned that confectionery may follow the drop in volumes already being witnessed in alcohol and carbonated soft drinks. Rising fuel prices also pose a serious problem to convenience sales, eating into consumers' disposable funds.
Chris Girard, CEO of Beaverton, Ore.-based Plaid Pantries, has not yet noticed a decline in candy sales among their 102 stores. "My sense is that our candy category is one of our best-performing categories," Girard told CSNews Online .
Bill Hohler, director of marketing for Meridian, Idaho-based Jacksons Food Stores, agreed with Girard. "Our candy sales are up considerably for the year with 'same stores' sales up over 10 percent in sales and over 11 percent in gross profit dollars," Hohler told CSNews Online . "Candy is 4.33 percent of our inside sales. We bring in a lot of new items every year and also promote the category using shippers in the front of the stores."
According to Confectionerynews.com , Deutsche Bank surveyed 14 of the largest U.S. convenience stores and petroleum marketers in order to assess how PepsiCo's shares would be affected in light of recent rises in fuel prices. Prosperity at this level is essential for PepsiCo, which is estimated to take 20 percent of its domestic profits in convenience stores.
Respondents to the survey, which represent more than 14,000 stores, brought some good news for larger players in the confectionery industry, Confectionerynews.com reported. Around 77 percent of those surveyed felt that confectionery had shown the most growth over the past year and 40 percent thought that Hershey was doing the best job in promoting its products in convenience stores.
However, while larger confectionery companies appear to be holding up volume sales, Confectionerynews.com reported that the convenience market overall is still shrinking, possibly creating problems for smaller firms.