General Merchandise: Distributor's Notebook 2014
It pays to focus on core seasonal offerings in general merchandise
An unusually cold start to this past winter proved what Dan Goulette of Pine State Trading Co. often stresses to his c-store clients: It pays to focus on core seasonal offerings in general merchandise.
Retailers scrambled to meet consumer demand for firewood and other winter necessities when the cold hit early.
“Bundled firewood has been in high demand because of the early-season snow we had and cold weather,” Goulette says. “The same with rock salt and window wash.”
Convenience stores are missing out if they aren’t looking to capitalize on seasonal general merchandise products, says Goulette, category analyst for the Gardiner, Maine-based distributor, which serves about 4,000 retailers in New England and New York.
“Every store should have seasonal offerings either in-line near the general-merchandise set or in a particular endcap set up in their general-merchandise automotive areas,” he says. “For winter offerings, they should have a set with fuel additives, snow scrapers, batteries, maps, gas cans, hats, gloves. Of course, in summer, you’ll want suntan lotions and bug sprays.”
With consumers still feeling the pinch of a slow-to-rebound economy, proper merchandising is key to the category overall, Goulette says. Category managers need to keep their general-merchandise offer fresh and up to date, while still stocking core items.
“There’s not a whole lot extra to spend after they fill their gas tanks and come in and buy cigarettes or beer or a beverage and a grab-and-go sandwich. So you need to merchandise it well. Shelf toppers can help draw customers to that particular set or shelf,” Goulette says. “Some c-stores will even have toppers right out on the gas pump to lead them inside.”
Beyond seasonal items, cellphone accessories continue to be hot sellers in the category.
“Cellphone chargers are a big item at c-stores now,” Goulette says. “People may be traveling and forgot [their charger] at home. Generally, these products are cheaper than going into your Verizon, U.S. Cellular or AT&T store and buying the real thing.”
C-stores also now can find a variety of displays for cellphone accessories, from power wings and counter displays to gondola toppers and floor racks, he says.
For retailers looking to better serve female customers, Goulette points out that some phone accessories, including chargers, come in colors designed to appeal to women.
Batteries, lighters and sunglasses also remain strong sellers. Pine State offers sunglasses from Navajo Manufacturing, and Goulette says the stylish offering performs well in summer and winter.
“If people are traveling and they leave their nice pair of Oakleys at home, they’re not going to spend another $200 on a pair of Oakleys. But they’ll spend $14.99 on a nice pair of wannabes,” he says.
Higher-ticket gadgets such as wireless Bluetooth speakers offer fewer turns but higher profit margins and are worth stocking.
“It’s been proven in c-stores that there’s a place for it,” Goulette says. “I wouldn’t go hog-wild and bring in 40 different items or something. But bring your basics to start, maybe on a small display or peg it in-line, and watch the turns.”
Weaker products include disposable cameras and film, something largely being replaced by cellphone cameras, he says. And all those rubber-band bracelet looms that were so hot with the kiddie set last year? They are on the downslide, he says.
“A product like Loomz comes and goes in waves. It’s big at first and then the market gets saturated; all the kids have them and the repeat sales aren’t there as much,” he says
In the end, it’s often up to distributors to keep retailers up to speed so they can be first to shelf with the next great thing.
Retailers that do a good job with their general-merchandise set by merchandising it well and tracking what is selling and what is not will find the category quite profitable, he says.
“A store should make anywhere from 35% to 45% profit on general merchandise,” Goulette says. “In our sunglass program, the retailers make about 50% and cellphone accessories are probably in the 40% range. There’s good profit to be had on general merchandise.”