Distributing Advantage

Annual McLane show focuses on being profitable in tough times

Angel Abcede, Senior Editor/Tobacco, CSP

SAN ANTONIO -- Despite dark economic forecasts, an estimated 1,500 retailers and suppliers gathered in San Antonio for McLane Co.'s annual trade show and convention, which organizers believed would help attendees secure survival in turbulent times.

"We've brought together the right people to offer retailers the right prices and the right deals," Tony Frankenberger, vice president of merchandising for Temple, Texas-based McLane, told CSP Daily News. "Our customers should walk out with solid opportunities to increase margins."

In addition to the 135 booths set up at the Henry B. Gonzales [image-nocss] Convention Center, scheduled speakers also addressed topics ranging from distribution to tobacco. Nik Modi, senior analyst for UBS Investment Research, New York, in his session restated an earlier forecast about "accelerated" growth for other tobacco products (OTP), saying instead the rate would most likely maintain at 6% "due to prevailing economic conditions."

"The time for category management is now," Frankenberger said. "Everyone has to stay close to the business and focus on selling the right product at the right price to maximize every part of the store."

In other projections, Modi of UBS noted several possibilities:

Potential state and federal taxes and the increase in cigarette prices will benefit the premium segment as people "smoke less, but smoke better." As shown in the United Kingdom, cigarette usage will eventually bottom out. As the big cigarette manufacturers enter the OTP fray, the moves will likely improve that business overall. "In the past, when big players enter into a small category, the category explodes," Modi said. Retail-level education is necessary for increased consumer use of OTP.

The convention ended Wednesday, with the featured speaker being Kit Dietz of Dietz Consulting, Huron, Ohio. Dietz was expected to address issues of distribution and retail.

"We want to provide an atmosphere of learning and for [retailers] to see, as our theme implies, that there is a profit advantage," Stephen Nix, product director for McLane, told CSP Daily News. "We wanted to focus in on the resources, technology, people and capabilities of McLane to help our clients to better sell items in their stores."

Angel Abcede, CSP/Winsight By Angel Abcede, Senior Editor/Tobacco, CSP
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