Consumer habits are changing, with the large weekly shop in decline and 90% of UK shoppers now visiting a convenience store several times a week (HIM).
As a result, the convenience market – and the many wholesalers that provide them – is thriving, with annual sales topping £38bn in 2018.
Value for money is a big driver behind this growth, making price marked packs (PMPs) a major tool for retailers to give a perception of value, and of course, to grow sales.
For years retailers have had mixed opinions on PMPs. Some swear by their value in growing sales, while others prefer to set their own prices.
Now most wholesalers and retailers, even in London, realise that PMPs can work in their favour, and that to compete with supermarkets they need to set an attractive price proposition alongside convenience.
Meanwhile, large manufacturers, across a diverse range of categories including drinks, confectionery, snacks and alcohol, have been investing more and more resources in introducing PMPs to the market.
They clearly believe they are an excellent aid in driving purchase, as confirmed by Amy Burgess, Senior Trade Communications Manager at Coca-Cola European Partners (CCEP): “Wholesalers are at the heart of our price-marking strategy.
“PMPs are provided at a price that offers a fair and competitive margin, which helps to increase consumer appeal by offering a great perception of value, whilst allowing our customers to reap the full benefits of increased sales.”
PMPs can also have the added benefit of assuring customers trailing a new product.
“More than a third of shoppers (35%) agree that they are more likely to purchase a new brand in a price-marked pack,” says Amy.
No surprise then, that CCE’s latest product – Reign Total Body Fuel – comes in both plain and PMP versions.
The new drink from Monster Energy is the brand’s first foray into the performance energy drinks sector, engineered to fuel optimum performance for workouts and strength training.
Reign Total Body Fuel is designed to be consumed pre and post workout and contains 200mg of natural caffeine extracted from green coffee beans.
It is available in four flavoured variants – Melon Mania, Razzle Berry, Lemon Hdz and Sour Apple. Each 500ml can is adorned with distinctive and eye-catching warrior-themed packaging and is available in plain and price-marked packs.
The Ready-to-Drink coffee sector is set to more than double over the next ten years according to Nielsen and in March 2019, Monster Energy unveiled its first range of RTD coffee drinks. Available in a premium ‘touch ink’ black 250ml can from March, Espresso Monster is a blend of real brewed coffee and Monster energy that was designed to appeal to coffee lovers and energy drink fans alike.
PMP variants of new launches are always a welcome addition in the wholesale channel as it gives consumers extra assurance on price about that the new product they are trying.
They are also useful in creating in-depot theatre around a new product, helping to drive those crucial early sales. something that Matt Gouldsmith – Channel Director, Wholesale at Lucozade Ribena Suntory (LRS), agrees with.
He said: “Including price-marked packs of the latest innovation can help retailers and wholesalers to encourage impulse sales and drive incremental purchases.”
For example, last year, Lucozade Energy launched its latest flavour: Watermelon & Strawberry Cooler in 380ml PMPs and initial results have been strong.
Well known retailer Atul Sodha stated: “For a new product it’s selling incredibly, and the impact has been amazing. Sales across the first month put it into my top 30 value sellers across the entire shop, and into the top 5 soft drinks sellers instantly.”
Another move from LRS that includes a PMP was Ribena entering the enhanced and flavoured water category for the first time. Ribena Frusion is unique in the soft drink category as it uses blackcurrant water that has been naturally infused with real fruit.
In the alcohol section, RTDs arguably have the biggest impact when it comes to PMPs.
For example, by choosing to stock price marked student favourite VK, from Global Brands, in areas with large student populations, wholesalers and independent retailers are likely to see a rise in revenue generated from the category.
VK is available in a 70cl price marked bottle at £2.49, while RTS canned cocktail brand Flare – also part of Global Brands’ price-marked portfolio at £1.29 per can – is exclusive to independent retailers, giving the wholesale channel a unique opportunity.
When asked how wholesalers can maximise sales of PMPs, Christian Sarginson, Brand Controller at Global Brands answered, “[by] merchandising them to the best of their abilities”.
“PMPs already stand out on shelves, but placing them at eye-level heightens this, and grabs the immediate attention of retailers,” says Christian.
Rustlers, from Kepak Consumer Foods, recognises the importance of PMPs and offers each of its top-selling SKUs as £2 PMPs; including the Rustlers Quarter Pounder, the best-selling micro-snack in the UK.
The new Rustlers Moroccan Vegetarian Burger is also available to the convenience channel as a £2 PMP.
Available from January, the first ever vegetarian burger from the Rustlers brand will meet the growing demand for meat free products.
“PMPs have a key role to play, particularly at a time of economic uncertainty, and that’s why our price-marked packs are available at accessible price points, helping to attract new customers and encouraging repeat purchase from brand loyalists and impulse shoppers,” says Monisha Singh, Shopper Marketing Manager at Kepak Consumer Foods.
Following the introduction of the Rustlers All Day Breakfast Sausage Muffin, which is price-marked at £1.50, Rustlers now features in the key consumption occasions of breakfast, lunch and dinner, with a major presence in three of the key shopper missions; food to go, meal for tonight and top up.
The sharing occasion in particular is a huge area within PMPs, currently worth £198m and growing +12% year-on-year (Nielsen).
Sharing and snacks giant, KP Snacks, is committed to helping retailers succeed with this occasion and now offer 21 PMPs across the KP family.
This includes their biggest brands McCoy’s and Hula Hoops, as well as favourites Discos, Wheat Crunchies, Nik Naks and Skips.
As a category champion, the firm takes a lot of insights and learnings from their retailer partners, as Matt Collins, Trading Director at KP Snacks explains.
“Our SnacKPartners Ambassadors Forum provides a fantastic platform for us to collaborate with some of the country’s best in class retailers…we use quarterly meetings to discuss the latest market developments and hot topics within the sector.”
As a result, at the end of 2018 KP Snacks launched larger cases across their £1 PMP range to help retailers better manage demand for the best-selling format.
“Rising from 12 to 16 packs, the larger new cases will not only make stock last longer but have been redesigned to be stackable and also include a punch hole for easy set-up and maintenance of secondary displays,” says Matt.
They are available across Skips, Nik Naks, Space Raiders, Big Hoops, McCoy’s, McCoy’s Chips and the new Roysters PMP.
Another category leader in PMPs is Mondelez, who now offer their widest ever range of PMPs across all categories, which includes a number of bestsellers.
Alongside its Cadbury 55p PMP singles bars and £1 PMP tablets, Mondelez introduced two new price-marked packs to the core range in 2018.
£1 chocolate bags (95g) are now available across bestsellers in the segment including Cadbury Dairy Milk Giant Buttons, Cadbury Dairy Milk Caramel Nibbles, Cadbury Twirl Bites, Cadbury Bitsa Wispa and Terry’s Chocolate Orange Minis.
Cadbury’s most notable heritage brand, Bournville, launched a PMP variant in January, with a pack design that has been specially designed to ensure stand-out on shelf.
PMPs in biscuits is important for shops which offer a varied biscuit range, as the category generates a higher basket spend – with the average basket spend of a biscuit category shopper more than double the average food to go shopper, says Sital Parmar, Marketing Controller at Burton’s Biscuit Company.
Burton’s range of PMPs includes: Jammie Dodgers Raspberry (89P PMP), Wagon Wheels Original (£1 PMP), Wagon Wheels Jammie (£1 PMP), Maryland Choc Chip (99P PMP) and Maryland Big & Chunky (£1.39 PMP)
With more people frequently choosing to have a cosy night in with family and friends over going out, value-for-money confectionery continues to be a hugely popular choice for shoppers seeking a tasty sweet treat.
“So stocking PMPs – particularly from popular brands – can be hugely effective in boosting sales,” says Mark Walker, Sales Director at Swizzels.
Swizzels has a range of best-selling price marked hanging bags which are recognisable to retailers and shoppers alike, such as Swizzels’ Squashies.
“Squashies original flavour has the highest rate of sale out of all £1 price marked sugar confectionery packs in the market, 22% above the next nearest competitor (IRI),” says Mark.
For those customers seeking a single portion sweet treat for on the go consumption, the range is also available in 45g bags with a price marked 3 for £1 multi-buy across the Original Raspberry & Milk, Sour Cherry & Apple and Bubblegum flavours.
To promote the Swizzels range of value for money sharing confectionery, the brand has launched a Big Night In campaign.
The trade element of the campaign will be activated by Wholesalers and will include promotional pricing and a competition allowing retailers to win TV’s and streaming vouchers if they buy three cases and upload their receipt to the Swizzels website.