With retail operational costs increasing by 3.9% , there has never been a more important time for retailers to maximize sales and profitability. One key factor for convenience stores is pricing. This needs to be competitive to guarantee financial success whilst remaining enticing to customers to ensure repeat visits.
How easy is it to find the right balance between price and promotions?
Retailer Advisory Panel member Ramesh Shingadia, owner of two Budgens Stores in Surrey, uses a mixture of price tiering within product ranges and promotions to attract shoppers. Ramesh also runs several promotions in-store including “2 for 1 and long term everyday low prices as these are important to make sure that the margins are right and that customers feel that they are getting additional value for money.”
Location, local competition and customer affluence are important factors to consider when it comes to pricing versus promotion. Kay Patel who owns and operates four stores in East London, where competition is truly on his door step, strives to ensure that his prices are competitive as this is essential to the success of his business. On top of the Best One and Booker promotions, Kay runs additional promotions which are specifically tailored to his customer base. “We have a lot of student and office workers nearby, so we run impulse purchase offers a well as promotions at the back of the store to encourage them to shop the whole store. This is a great way of getting incremental sales.”
Mandeep Singh, of Singh’s Premier in Sheffield regularly runs promotions as these are a great way to encourage additional sales, whether they be incremental sales or buying larger packs on offer. In addition, he ensures that the range offered in-store comprises of the best-selling brands, mid-level and value products which offers his customers a range of pricing to cater for all his customers affluence levels for each category. Mandeep also highlights in-store promotions through a combination of POS and signage as well as through Social Media. “We use Social Media to communicate with our customers with giveaways and promotions but we focus on branded products as opposed to own brand as they generate better engagement.”
And whilst promotions are a great way to attract customers, it is important not to de-value the store’s offerings by running too many promotions. Jonathan James, whose business is price led convenience, believes that “it is better to run good promotions occasionally, as opposed to running constant promotions.”
David Charman, owner of Parkfoot Garage, an award-winning retailer in an affluent village in Kent, puts less emphasis on promotions as he believes that his customers benefit from additional value through the customer service and range of products he offers. He does however stock Spar own brand products, which are price marked, and therefore re-assures his customers that they are getting good value when shopping in his store.
Tell us how you found the right balance for your store and how it has helped your business…