“Some customers come in every day to get a 12.5g pack of tobacco and often buy something else to go with it,” reports Marc Jones, at Siop Hoffnant Stores in Brynhoffnant, Wales. “But when the pack sizes go up I expect we’ll see these people a bit less.”
Jones’s concern is shared by other retailers, who are waiting to feel the impact of next month’s Tobacco Products Directive, particularly as tobacco companies like to cite research that smokers visit stores more frequently than non-smokers and spend more while they’re there. But cigarettes isn’t the only category to take a hit. These days, many shoppers are no longer picking up newspapers and lottery tickets in their local c-store; newspaper sales are in long-term decline while gambling is moving online – two categories which have traditionally helped to drive footfall and impulse spending.
“Younger people have migrated online to read news and play the Lottery and that will continue to happen, to the detriment of c-stores, particularly in rural areas where they would have relied on those as footfall drivers,” explains Nick Carroll, retail analyst at Mintel.
Siddington Convenience Store near Cirencester is already feeling the pinch. “Newspaper sales are in decline and I’m planning to open an hour later than we used to – at 7am – because of this,” says owner Peter Gibbons.
So what can rural retailers do to draw people in and get them spending? Services such as ATMs, the Lottery, PayPoint and Post Office can do the trick, according to the companies themselves. Camelot reports that when a rural store fits a National Lottery terminal, footfall and sales immediately begin to increase. It points to IGD research which shows that a National Lottery player spends, on average, £8.46 more than those whose who don’t play. And according to PayPoint, whilst traditional shoppers visit 3.8 times a week, a PayPoint shopper visits 4.6 times and spend £7.70 per shop items compared with £6.39 spent by traditional shoppers.
It sounds great, but not all retailers are convinced. Gibbons, at Siddington reckons it’s difficult to get Post Office customers and lottery ticket buyers to spend more, while Colin Woods, of Amberley Village Stores in West Sussex, is subsidising his Post Office by about £40 a week – although having the Lottery does make up for the shortfall. “I wonder whether we’ll even have it in future as there’s so few things we can get commission on now,” he muses, “We could just put in PayPoint and an ATM instead.” Other stores are acting as a collection point for home delivery services although this can be a logistical nightmare, particularly at key times such as Christmas, with big parcels taking up valuable storage space, according to Mintel’s Carroll.
So what else can encourage shoppers to come in and fill their baskets? According to him! research & consulting research, only 10% of Lottery shoppers have three items in their baskets, while those buying food-to-go, crisps and snacks and in-store bakery are the most likely to have three items (28%, 23% and 22% respectively).It’s certainly the experience of Jones at Siop Hoffnant Stores, who reckons his in-store bakery is a big draw, with some customers popping in two or three times a day to get breakfast food, sandwiches or hot snacks – and then making impulse purchases on top. Says Jones: “They often then pick up crisps, soft drinks or chocolate for lunch and maybe a paper – it’s a very successful part of the business and I think it’s only going to grow.”
Today’s Retail Director John Kinney suggests another two categories that could provide opportunities for more spend: pet food and baby. “They would suggest a larger household yet they are probably two categories not considered key by many retailers,” he says. He points to fresh food, food-to-go and wines and spirits as categories where a good product range will help retailers create a destination store. Indeed, Mintel research has revealed that the alcoholic drinks category isn’t currently being exploited fully by small retailers. Younger people in particular looking to drink at home rather than in pubs and it suggests that making the alcohol section more appealing can really encourage impulse buys. As many rural retailers are already doing, it recommends that retailers do not just sell Fosters and budget bottles of wine, but also stock up on local beers. “We’re getting more people coming in the evening, buying beers and wine and ready meals – alcohol is a growing market,” agrees Gibbons, at Siddington Convenience Store.
And when someone’s coming in specifically to buy cigarettes, for example, the challenge is to interrupt their shopping trip – so the counter top is vital for impulse purchases.
Woods at Amberley Village Stores also reckons it helps to have niche products your customers can’t get in supermarkets. He always stocks about 50 local cheeses, sourdough bread from a local bakery, and makes fresh sandwiches which customers will come in for specifically.
And let’s not forget the value of good value when it comes to pulling in the punters. Regular customers at Siddington Convenience Store will actively look for offers and Gibbons was surprised when a recent promotion saw some buying two or three nine-roll packs of toilet rolls. He adds: “It’s good for us, but we just need to get them to buy other things while they’re here.”
The overall message is that retailers cannot rely on traditional footfall drivers continuing to work as well in the future as they have done in the past. Convenience will always encourage people to shop locally, but retailers do need to provide that key point of difference in-store that will keep them coming back time and time again.
By Helen Gregory