Generic Presenation/4-25-05/N:ppt
Confectionery
0
Candy Generates 59% Of Confectionery Sales
Division of Single Serve Snacking $ Sales
Mints
2.8%
Gum
12.2%
Confectionery
36.9%
Candy
Generic Presenation/4-25-05/N:ppt
21.9%
z
Gum contributes 33% of Confectionery sales
Source: C-Store Study 6 months ending September 2004; DHC Analysis.
1
For Candy, 12% Of The Items Generate 67%
Of The Candy Sales In Convenience Stores
% Of Candy $ Sales
100.0%
80.2%
62.1%
66.9%
71.2%
74.7%
77.7%
80% of
items only
drive
18.2% of
sales
55.7%
48.6%
673 Candy Items
Were Active
39.6%
Generic Presenation/4-25-05/N:ppt
28.2%
% Of Candy
UPC’s
…
2
z
4
6
8
10
12
14
16
18
20
100
81 items are responsible for 66.9% of the Candy sales
Source: C-Store Study 6 months ending September 2004; DHC Analysis.
2
King Size Bars Represent 43% Of Chocolate
Candy Sales
King Size Dollar Share Of
Total Chocolate Candy Sales
# Of Top Selling Chocolate
Candy Items That Are King Size
14
9
Generic Presenation/4-25-05/N:ppt
43%
7
Top 10 Items
z
Top 20 Items
Top 30 Items
King Size Chocolate bars are important to Convenience Stores
Source: C-Store Study 6 months ending September 2004.
3
48% Of Gum Sales Are Generated By The Top
10% Of Items
% Of Gum $ Sales
100.0%
71.7%
68.9%
48.2%
34.1%
Generic Presenation/4-25-05/N:ppt
80% of Gum
items
contribute
only 28.3%
of sales
173 Gum Items
Were Active
16.5%
z
59.9%
40.5%
24.9%
% Of Gum
UPC’s
53.6%
64.2%
…
2
4
6
8
10
12
14
16
18
20
100
18 UPC’s account for 48% of Gum sales
Source: C-Store Study 6 months ending September 2004; DHC Analysis.
4
The Gum Sales Velocity Warrants More Space
Gum Share Of:
Index Of Space To:
67
12.1%
13.9%
8.1%
Generic Presenation/4-25-05/N:ppt
Space*
z
Single Serve
Snacks $ Sales
Single Serve
Snacks Unit Sales
58
57
Unit Sales
Profit $
14.1%
Single Serve
Profit $
Dollar Sales
Gum is underspaced on a dollar unit and profits
*Linear inches all locations
Source: C-Store Study 6 months ending September 2004; DHC Analysis.
5
Lack Of Permanent Confectionery Shelf-Tags
Can Result In Higher Out-Of-Stocks
Does This Store Have Permanent Confectionery Shelf-Tags?
% Of Stores In National Audits
At Checkout
53%
At Confectionery Aisle
66%
47%
34%
Generic Presenation/4-25-05/N:ppt
Yes
C-Store
Study
z
74%
No
Yes
No
26%
87%
13%
The C-Store Study cooperators do a much better job than the
“average” C-Store based on the C-Store National Audit Study
Source: National Audits, May 2004; C-Store Study, September 2004.
6
On Average 9.4% of The Confectionery Items
Stocked At The Checkout Are Out-Of-Stock
Out-Of-Stock Summary – Checkout Location
% Of Total Confectionery Items Out-Of-Stock
Average %
Of Items
O-O-S
9.4%
20%
17%
14%
13%
10%
9%
3%
8%
9%
5%
4%
2%
Generic Presenation/4-25-05/N:ppt
# Of Items
Out-Of-Stock
1
2
3
4
5
6
7
8
9
11
12
13
Source: C-Store Study, September 2004.
7
On Average 4.1% of The Confectionery Items
Stocked At The In-Aisle Are Out-Of-Stock
Out-Of-Stock Summary – In-Aisle Location
% Of Total Confectionery Items Out-Of-Stock
Average
O-O-S
4.1%
14%
11%
6%
3%
1% 1%
Generic Presenation/4-25-05/N:ppt
# Of Items OutOf-Stock
1
2
1% 1%
3
4
2%
5
6
7
8
9
5%
3%
3%
2%
6%
5%
11
12
13
14
4%
16
17
5%
4%
3%
3%
19
20
22
4%
26
33
62
Source: C-Store Study, September 2004.
8
Out-Of-Stocks Can Greatly Impact Sales
Cost Of An Out-Of-Stock On An Average “Top 10” Item
Potential Lost $ Sales Per Item Per Annum
Per 75 Store Chain
Per Store
$41,262
$31,412
$550
$11,226
$418
Generic Presenation/4-25-05/N:ppt
$150
Candy
Potential
Lost
Profits
$253
Gum
$192
Mint
Candy
Gum
Mint
$69
$18,981
$14,450
$5,164
Source: C-Store Study 6 months ending September 2004; DHC Analysis.
9
Corn/Tortilla Chips And Potato Chips
Represent 53% Of The Salty Snacks Sales
Division of Single Serve Snacking $ Sales
Pretzels
Pop Corn
Pork Rinds
0.5%
0.5%
0.9%
Snack Mix
1.4%
Potato Chips
5.0%
Generic Presenation/4-25-05/N:ppt
Salty
Snacks
19.9%
Corn/Tortilla Chips
5.6%
6.0%
Other Salty Snacks
Source: C-Store Study 6 months ending September 2004; DHC Analysis.
10
Pastries, Snack Cakes, And Donuts Are The
Largest Of The Baked Goods Sub-Segments
Division of Single Serve Snacking $ Sales
0.2%
0.2%
1.0%
1.2%
1.2%
Toaster Pastries
Brownies
Pies
Cupcakes
Misc. Baked Goods
Muffins
2.1%
Donuts
Baked
Goods
18.3%
4.1%
Snack Cakes
Generic Presenation/4-25-05/N:ppt
4.0%
Danish/ Pastry/
Cinnamon Rolls
4.3%
Source: C-Store Study 6 months ending September 2004; DHC Analysis.
11
Convenience Store Recommendations
Based On Sales/Audit Findings
z Understand the importance of Confectionery and Salty Snacks
which account for 60% of Single Serve Snacks Dollar sales
z Merchandise Confectionery and Salty Snacks in multiple
locations to drive incremental sales
z Review space allocations of Crackers, Nutrition/Energy Bars,
and Cookies
z Gum and Baked Goods are underspaced
z King Size Bars are an integral part of the Chocolate Candy
Segment
Generic Presenation/4-25-05/N:ppt
z Provide permanent shelf tags for Confectionery to help reduce
out-of-stocks
z Review stocking procedures for key Confectionery items
12
Generic Presenation/4-25-05/N:ppt
Best Practices
13
Note
Stores in this Study had a significant range in store sales ranging
from under $200,000 to over $3,000,000.
Generic Presenation/4-25-05/N:ppt
Because of the sales differences, the best practice analyses have
been segmented by 3 different store sizes.
Small
-
$140,000 to $420,000
Medium
-
$421,000 to $700,000
Large
-
$701,000 to $3,800,000
14
What Is The Opportunity For Improved
Performance?
Top Performing Retailers have a 63% advantage in performance, almost a $1 Billion
opportunity for the industry
Total Single Serve
Snack Food Sales
Per $ MM ACV Index
155
95
Generic Presenation/4-25-05/N:ppt
55
Poor Performing Stores
Medium Performing Stores
Top Performing Stores
Low
55
94
161
Medium
55
95
157
High
52
93
149
z
Moving Poor and Medium
performing stores to Top
performing stores could
yield an additional $1
Billion in sales
Strategy: Take advantage of this opportunity by adopting the
Best Practices of Top Performing Retailers
15
Best Practice: Merchandise Snacking Categories That Have
Higher Penetration, Purchase Frequency, And Provide Impulse
Purchases In Multiple Locations
Carbonated, Non-Carbonated Beverages, and Water
are “Destination” categories that have High
Penetration, High Frequency, but Low Impulse
Higher Penetration/
Frequency/Impulse
Mixed Scores
Generic Presenation/4-25-05/N:ppt
Lower Penetration/
Frequency/Impulse
Corn/Tortilla Chips
Popcorn/Pretzels/Other
Snacks
Crackers
Energy/Nutrition Bars
Baked Goods
Mints
Cookies
Nuts/Seeds
Candy
Potato Chips
Gum
z Make sure that Candy, Potato Chips, and Gum are stocked
in multiple locations throughout the store
Source: C-Store Study, September 2004.
16
Best Practice: Merchandise Confectionery
At Checkout Counter
Index Of Dollar Sales Per Store – Checkout Vs. In-Aisle Only
137
100
Generic Presenation/4-25-05/N:ppt
In-Aisle Only *
Checkout **
z Retailers that stocked Confectionery at the Checkout
Counter and In-Aisle enjoyed a 37% increase in
Confectionery Dollar sales
*Limited sample. ** Includes Checkout only and Checkout & In-Aisle.
Source: C-Store Study, September 2004.
17
Only 20% Of C-Stores Have Candy At Food
Service And Only 8% Have Gum
What Is Stocked In The Food Service Area?
% Of Stores Stocking
C-Store Study
Broadscale Audits
100%
Coffee/Tea
96%
Fountain Drinks
84%
Baked Goods
80%
Hot Dog Grill
74%
Sandwiches
55%
Chips
40%
Cookies
(88%)
(70%)
(84%)
(51%)
(64%)
Candy
20%
(43%)
Nuts
20%
(22%)
Nutrition Bars
18%
(34%)
Crackers
16%
(36%)
16%
(26%)
Pretzels
Gum
Generic Presenation/4-25-05/N:ppt
(97%)
(30%)
25%
Meat Snacks
(100%)
Mints
z
8%
(22%)
8%
(12%)
Soups
NA
(39%)
Chicken
NA
(20%)
Only 8% have Gum at Food Service
Source: Broadscale Audits, May 2004.
( ) Data from C-Store Study, September, 2004.
18
Best Practice: Make Candy And Gum
Available In Food Service
Index Of Candy Sales
Per Store*
Generic Presenation/4-25-05/N:ppt
98
102
Candy Not Candy Available In
Available In Food Food Service
Service
Index Of Gum Sales
Per Store*
98
Gum Not Available
In Food Service
108
Gum Available In
Food Service
* Large stores.
Source: C-Store Study 6 months ending September 2004.
19
Generic Presenation/4-25-05/N:ppt
Best Practice: Merchandise Single Serve
Snacks In The Food Service Area To Generate
Additional Snack Purchases
20
Best Practice: Candy Sales Expand With
Multiple Merchandising Locations
Candy Index Of $ Sales Per Store
By Number Of Locations
Small Stores
(< $420K)
111
95
Medium Stores
Large Stores
($421K - $700K)
97
99
(> $701K)
102
104
107
Generic Presenation/4-25-05/N:ppt
73
# Of
Locations
1 to 2
3 or
more
1 to 2
3
4 or
more
1 to 2
3
4 or
more
Source: C-Store Study, September 2004; DHC Analysis.
21
Best Practice: Gum Sales Also Expand With
Multiple Merchandising Locations
Gum Index Of $ Sales Per Store
By Number Of Locations
Small Stores
(< $420K)
Medium Stores
($421K - $700K)
123
Generic Presenation/4-25-05/N:ppt
94
# Of
Locations
1 to 2
104
3
Large Stores
98
4 or
more
1 to 2
99
3
(> $701K)
112
109
113
90
4 or
more
1 to 2
3
4 or
more
Source: C-Store Study, September 2004; DHC Analysis.
22
Best Practice: Sales Are Optimized For Candy
When 200+ Candy Items Are Available
Candy Index Of $ Sales Per Store
By # Of Items Carried
Small Stores
Medium Stores
(< $420K)
95
106
Large Stores
($421K - $700K)
(> $701K)
129
99
78
106
113
105
115
108
76
62
<140
140 to 170 to
169
199
200+
Generic Presenation/4-25-05/N:ppt
# Of
Items
<165
165 to 191 to
190
220
220+
<180
180 to 211 to
210
220
220+
Source: C-Store Study 6 months ending September 2004; DHC Analysis.
23
Best Practice: In Large Stores Gum Sales Are
Optimized With 85 To 94 Gum Items Carried
Gum Index Of $ Sales Per Store
By # Of Items Carried
111
Small Stores
Medium Stores
(< $420K)
($421K - $700K)
(> $701K)
136
101
112
70
Generic Presenation/4-25-05/N:ppt
z
<75
75 to 89
90+
105
101
83
# Of
Items
Large Stores
<80
80 to 94
95+
71
<85
85 to 94
95+
In small and medium sized C-Stores Gum sales are optimized when
stores carry about 80 Gum items
Source: C-Store Study 6 months ending September 2004; DHC Analysis.
24
Best Practice: Candy Sales Are Expanded In Large
Stores With Over 100 Linear Feet Available
Index Of Candy $ Sales Per Store
By Linear Feet Available
Small Stores
Medium Stores
(< $420K)
Generic Presenation/4-25-05/N:ppt
96
Linear <50'
Feet
z
104
50 to 100'
Large Stores
($421K - $700K)
99
>100'
(> $701K)
108
90
<50'
108
102
94
78
50 to 100'
>100'
<50'
50 to 100'
>100'
In small and medium stores 50 to 100 linear feet of space allocated
candy will optimize sales
Source: C-Store Study 6 months ending September 2004; DHC Analysis.
25
Best Practice: Gum Performs Better In Small And
Large C-Stores When More Than 20 Linear Feet Of
Space Is Available
Index Of Gum $ Sales Per Store
By Linear Feet Available
Small Stores
Medium Stores
($421K - $700K)
(< $420K)
106
Large Stores
111
96
85
(> $701K)
101
97
106
Generic Presenation/4-25-05/N:ppt
67
Linear <15'
Feet
z
15 to 20'
20'+
<15'
>15'
<15'
15 to 20'
20'+
Medium stores need more than 15 feet of space to optimize Gum sales
Source: C-Store Study 6 months ending September 2004; DHC Analysis.
26
Best Practice: Stocking Of At Least 25 King Size
Chocolate Items Expands Chocolate Candy Sales
Index Of Chocolate Candy $ Sales Per Store
By Number Of King Size Chocolate Items Carried
101
113
Generic Presenation/4-25-05/N:ppt
64
# Of King
Size Items
<20
20-24
25+
Source: C-Store Study 6 months ending September 2004; DHC Analysis.
27
Best Practice: Temporary Displays Will Drive
Incremental Sales Of Candy And Gum
Index Of $ Sales Per Store
Candy
Generic Presenation/4-25-05/N:ppt
93
Gum
108
Store Does Not Have
Store Has
Temporary Display Temporary Display
99
107
Store Does Not Have
Store Has
Temporary Display Temporary Display
Source: C-Store Study 6 months ending September 2004; DHC Analysis.
28
Best Practice: End Cap Displays Will Drive
Candy And Gum Sales
Index Of $ Sales Per Store
Candy
Generic Presenation/4-25-05/N:ppt
92
Candy Not On End
Cap Display
Gum
107
Candy On End Cap
Display
98
Gum Not On End Cap
Display
106
Gum On End Cap Display
Source: C-Store Study 6 months ending September 2004; DHC Analysis.
29
Baked Goods Perform Well When Stocked At Food
Service, But Not When Stocked At The Checkout
Counter
Index Of $ Baked Goods Sales Per Store When Stocked At:
Food Service
86
101
Generic Presenation/4-25-05/N:ppt
Baked Goods Not Baked Goods Stocked In
Stocked In Food Service
Food Service
Checkout Counter
101
85
Baked Goods Not Baked Goods Stocked
Stocked At Checkout At Checkout Counter
Counter
Source: C-Store Study 6 months ending September 2004; DHC Analysis.
30
Best Practice: Potato Chips Need At Least 25 Feet
Of Space And 35 Items Throughout The Store To
Realize Their Full Potential
Index Of Potato Chips $ Sales Per Store By:
# Of Items Carried
Linear Feet
134
97
100
99
Generic Presenation/4-25-05/N:ppt
<25
117
75
64
# Of
Items
94
25 to 29 30 to 34
35+
Linear
Feet
<10
10 to 19 20 to 25
25+
Source: C-Store Study 6 months ending September 2004; DHC Analysis.
31
Best Practice Check List
z Stock Confectionery at the Checkout Counter
z Stock Candy, Gum, and Potato Chips in Food Service
z Merchandise Candy and Gum in at least 4 locations in the store
z Carry 200 Candy and 80 Gum Items throughout the store
z Provide 100 linear feet to Candy and at least 20 feet to Gum
across the store
z Carry at least 25 King Size Chocolate UPC’s
Generic Presenation/4-25-05/N:ppt
z Provide Temporary Displays and End Caps to Candy and Gum
z Carry Baked Goods in Food Service but not at the checkout
z Stock at least 35 Potato Chips UPC’s and provide over 25 linear
feet of space to Potato Chips
32
Generic Presenation/4-25-05/N:ppt
Appendix
33
Consumers Participating In The Interview
Process Were Reflective Of The C-Store Shopper
Consumer Interviews Demographic Summary
Gender
Age
Ethnicity
66%
52%
34%
23%
28%
25%
23%
15%
Female
18-24
25-34
35-44
45-54
55+
4%
White
Hispanic
AfricanAmerican
Asian
4%
Other
Generic Presenation/4-25-05/N:ppt
Male
15%
11%
Source: C-Store Study 6 months ending September 2004; DHC Analysis.
34
C-Store Shoppers Are Generally Very
Satisfied With Their Shopping Experience
% Of Respondents
72%
23%
1%
Generic Presenation/4-25-05/N:ppt
Very Satisfied
Somewhat Satisfied
Neither Satisfied/Dissatisfied
Source: C-Store Study, September 2004.
35
Checkout Counter And Beverage Coolers Account
For 2/3 Of The Total In-Store Consumer “Stops”
% Of In-Store “Stops”
50%
Checkout Counter
18%
Beverage Coolers
11%
Food Service
5%
Confectionery
4%
Salty Snacks
3%
Sweet Goods
3%
Bathroom
Frozen Coolers
Generic Presenation/4-25-05/N:ppt
Magazines
2%
1%
HBC
*
Automotive
*
General Merchandise
Grocery Products
*
*
z Creating more “stops” for the Snacking categories will expand
basket size
Source: C-Store Study, September 2004.
*Less than 1%.
36
On A Unit Basis, Five-Stick Gum Packs Represent
One Out Of Every Five Units Of Gum Sold
% Of Gum Sales
Units
Dollars
20%
Generic Presenation/4-25-05/N:ppt
6.2%
z
5-stick is an important pack type to stock in Convenience Stores
Source: C-Store Study 6 months ending September 2004; DHC Analysis.
37
Almost 90% Of The Stores Had An
Out-Of-Stock Situation
% Of Stores With Confectionery Out-Of-Stocks (OOS)
76%
10%
Generic Presenation/4-25-05/N:ppt
1 or 2 Items OOS
3 or 4 Items OOS
3%
5+ Items OOS
z 13% of the stores had 3 or more items OOS
Source: C-Store National Audit – May 2004.
38