When it comes to running a profitable store, focusing on the iconic brands that do the business for you day in day out is a vital strategy.
A lot of advice is handed out to retailers on the intricacies of running a profitable modern convenience store but when it comes right down to it, the basics of managing a store well are pretty simple. One of the most fundamental planks of a successful store strategy is getting the right range on the shelves – and that means focusing time, effort and shelf space to the biggest and most iconic brands in the business.
These are the brands that customers know, trust and very often love – and ensuring that they are highly visible and always in stock is the first step to driving sales and profits.
In Scotland, there are quite a few brands that fall into that category, but possibly the best-loved of all is Irn-Bru. The debate over whether Irn-Bru or Coca-Cola is bigger in Scotland has rumbled on for many a long year, muddied (on purpose) by the way that sales are recorded and collated, but whatever the answer is to that question, ‘your other national drink’ remains a standout brand in Scotland’s local retailing community.
With annual sales of almost £80m in Scotland [IRI, Sep 2017], Irn-Bru lays claim to being the number one Scottish grocery brand [Kantar, May 2016], accounting for almost 60% of flavoured carbonates’ sales in convenience [IRI, Sep 2017] and currently growing strongly at 10%. [IRI, Sep 2017].
That’s a lot of statistics in a single paragraph, but they all tell the same story: Irn-Bru is a must-stock par excellence.
Ian Johnstone, Scotland Impulse Controller at AG Barr, recommends that retailers stock all three Irn-Bru variants as an increasing number of shoppers continue to look for a choice of regular, low and zero sugar products.
He says: “Irn-Bru sugar-free is Scotland’s leading low calorie flavoured carbonate while recently-launched Irn-Bru Xtra provides the same great taste as Irn-Bru regular but with zero sugar. Irn-Bru Xtra has generated nearly £8m worth of additional sales for retailers in its first year [IRI, Sep 2017].
“In recent work with SLR retailers, the overwhelming message is that by giving the total Irn-Bru brand more prominence in your store, all three variants will benefit and drive your category sales.”
To support that growth, Irn-Bru is being been backed by a heavyweight £5m brand investment throughout 2017 across a number of platforms, including national TV advertising, digital and social media.
As well as continuing its partnership with the Scottish Challenge Cup and The Football League, Irn-Bru has strengthened its association with grass roots football by teaming up with Sky Sports’ flagship Saturday football programme, Soccer AM.
“The marketing support is reinforcing Irn-Bru’s position as the brand one in every two Scots drinks most often, with research confirming that Irn-Bru makes 89% of Scots feel proud to be Scottish. [LVQ Ad Tracking],” says Johnstone.
While not quite reaching the dizzying heights of Irn-Bru, AG Barr’s broader range of products have all established themselves as must-stocks in convenience in Scotland.
With soft drinks being the second-highest bought category in Scottish convenience after newspapers [HIM, 2017], the AG Barr range is a great way to drive rate of sale as well as profits.
The £44m Barr Family range is Scotland’s most popular range of flavours [IRI, Sep 2017], appealing to a wide consumer base, with 14 different flavours offering great value for money. The Barr brand has an important role to play on the soft drinks fixture, currently accounting for 13% of flavoured carbonate sales in convenience and growing strongly at 9% [IRI, Sep 2017].
Also firmly established is the Rockstar range of energy drinks from AG Barr. Energy is worth around £71m in Scottish convenience and accounts for nearly one in three soft drinks purchases [IRI, Sep 2017]. Within this, big can formats are driving this expansion at +13%, with flavoured variants continuing to show significant growth [IRI, Sep 2017].
Rockstar is currently growing at +14% in Scottish convenience and the top two flavoured big cans are Rockstar variants, in order – Punched Guava and Xdurance [IRI, Sep 2017]. Rockstar’s wide range of 11 flavours is also the biggest in the energy drinks category.
On top of that, AG Barr’s Strathmore Scottish Spring Water range and its expanding Rubicon range are also now firm favourites in Scottish convenience with Rubicon Spring, launched in June last year, delivering over £1.6m of additional sales to Scottish retailers [IRI, Sep 2017].
That growth has been driven by a £5m brand investment throughout 2017, including national TV advertising, outdoor posters, social media and sampling.
In the off-trade, the iconic product for Scots is surely Tennent’s Lager. After many years of being the biggest beer brand in Scotland by a mile, Tennent’s has recently secured its iconic status with the news that it is now Scotland’s favourite alcohol brand of any description, according to the latest Kantar data.
Countless attempts by UK and global brands to make a dent in Tennent’s status have largely proved fruitless and the brand continues to be the number one must-stock brand in beer.
The brand that Tennent’s knocked off the top of Kantar’s list, Glen’s Vodka, also has justifiable claims to icon status, and in our own Woodlands Local store, for instance, outsells its competitors in the vodkas category by a factor of 10 to one, a situation that is likely to be replicated in stores across the country.
Perhaps less glamorous but possibly more traditional, Hamlyns of Scotland has earned itself a place in the hearts of consumers across Scotland over the years too. Alan Meikle, Managing Director, says: “We know that consumers like local, regional and nationally sourced products. At Hamlyns of Scotland, we have always promoted the fact that we’re the only major brand of Scottish Porridge Oats and Oatmeal that can claim to be 100% Scottish from field to mill to finished product.
“We work closely with a network of Scottish farmers, many of whom have supplied us for several generations. We believe it’s important to shout about this in our marketing, and we’ve just added a new section to our website focusing on one of our farmer suppliers, so our customers have a full understanding of where our oats come from.”
Meikle highlights to local retailers that it’s critically important how they merchandise iconic Scottish brands in-store if they wish to maximise sales and profits.
“The multiple retailers have been really clever at merchandising big Scottish brands over the past few years, with eye-catching displays of a wide variety of products, not just to increase sales, but also to show how their support for the Scottish economy through local suppliers,” he comments.
“While space restrictions make it difficult for smaller stores to do something on that scale, it’s definitely worth having occasional Scottish displays around key dates like Burns Night and St Andrew’s Day. For the rest of the year Scottish products can be highlighted with Scottish saltire-branded shelf tickets. Where retailers have space, engaging suppliers in sampling activities can really help to encourage trial and purchase of iconic Scottish products.”
Remember however that there are regional differences even within Scotland. Hamlyns Scottish Oatmeal may be Scotland’s best-selling oatmeal by far, and Hamlyns Scottish Porridge Oats may be one of the fastest-growing brands in the competitive hot cereals market, but regional differences make choosing the right range for your store an important task.
Meikle explains: “Oatmeal sales are particularly strong north of Perth, where a high number of consumers use oatmeal to make porridge, whereas in central and southern Scotland porridge oats are much more popular for porridge making, so space should be planned accordingly.”