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How to identify high-growth categories

The Better Retailing team finds out which categories are showing strong growth in convenience stores and how retailers are driving it further

In the midst of these challenging times, retailers are looking for new categories to introduce that will bolster sales or keeping an eye out for slow-sellers that need to be removed from shelves and replaced. But it’s also important to monitor and look out for products and categories that are thriving, growing sales and footfall on their own merits and demanding greater attention, ranging and space within the store.

The biggest story, mentioned by all four retailers Better Retailing spoke to, is vapes, which have been seen as something of a lifeline for independent convenience stores. But to fully take advantage of this growing demand, there is more that retailers can be doing.

The sheer variety and changeability of this category, particularly when it comes to disposables, means that retailers need to be on the ball, introducing new flavours and brands as they arise and ensuring they have the right range to cater to all their customers’ needs.

“It’s been a really great seller for us,” says Imtiyaz Mamode, from Wych Lane Premier in Gosport, Hampshire. “We started out with 15-20 lines of Elf Bar, but now we have 25 lines in Elf Bar, almost 30 lines in Gold Bar and 40 lines in Crystal Bar. We started small, but we’ve started to do more as demand has increased, and this is attracting more customers.”

Retailers can study what is missing from their community’s supply chain and look to offer that, with greetings cards cited as a growing category by Trudy Davies, from Woosnam & Davies News in Llanidloes, Powys.

“The personalised ones – to mum, dad or a special person – they’re the ones people go for rather than more generic birthday cards, so make sure you’ve got a good range,” she says. “They’ve also got a very high margin.”

Regardless of category, value-led options are taking up more space in Faraz Iqbal’s Premier Linktown Local store in Kirkcaldy, Fife to cater to a growing demand.

“We have increased the amount of own-brand products in our store as a result of customer demand,” he says. “That’s been across every product category, but within grocery it’s especially key.”

Disposable recycling

Although sales of disposables appear to be plateauing slightly with concerns around changes in the law and the products’ general environmental unfriendliness, Imtiyaz Mamode, from Wych Lane Premier in Gosport, Hampshire, is making almost £6,000 a week from vape sales, up from £1,500 last year.

By selling at the recommended price rather than pushing for higher margins, he keeps his customers coming back to him, but he also offers a disposable take back recycling service, where people returning a used disposable get 25p off their next purchase.

“They can bring four back at a time, but it’s good for the environment and it’s attracting customers back into the store. They buy milk and bread as well as disposables when they come to us.”

All of this has contributed to greater growth in an already high growth category for Mamode who is expanding his range still further.

Refills on the charge

With costs everywhere on the rise and a growing desire to reduce wastage and live more sustainably, Trudy Davies introduced refill sections into her store Woosnam & Davies News in Llanidloes, Powys. The first four months were slow as people got their heads around the concept. But it has gone from strength to strength, attracting loyal customers and seeing 50% growth in the past six months.

“It started slowly and was perceived to be more expensive as a concept, but they work out cheaper for the customer and the retailer,” she says. “It proves you care about wastage and the community, and there are good margins in it as well.”

Davies recommends starting out small with popular lines like rice, pasta, porridge and muesli. She has grown her offer to include washing powders, washing liquids, anti-bacterial spray, shampoo and more. “People bring their own bottles and refill them,” she says.

The value of new products

Faraz Iqbal has seen something of a decline in his vape sales recently and instead the two in-demand categories he has focused on recently at Premier Linktown Local in Kirkcaldy, Fife, are value options and new launches.

“When it comes to new launches, what usually works best for me is impulsive products like snacks and crisps,” he says. “Spirits have also been very good for me. I can get good volume on a new spirit if I promote it right, with vodka the main spirit at the moment for launches.”

Iqbal cites the importance of getting ahead of bandwagons to gain that point of difference.

“You have to be first to have it,” he says. “Then you need to shout about it. There’s no point having something new that nobody knows about. That comes down to how you display it and social media. Facebook is very big for me.”

Ready to drink

Nathalie Fullerton, from One Stop Partick in Glasgow, has noticed a significant uplift in alcohol sales recently. As her store is on a high street near to a station, she’s seen the greatest surge in demand come from people looking for a drink they can easily grab and drink on the go.

“Within the alcoholic side of things, we’re up about 9%-10% on normal sales. These premixed cans of gin and tonic or vodka and cola are the most popular, and we’ve increased our range to accommodate the demand,” she says. “We went from having four to 21 varieties. We’ve introduced a diet cola and Smirnoff to go with the normal one, and have brought in Jack Daniel’s and Coke, Malibu and Coke. We seem to have become the destination store in the area for it.”

Fullerton has also introduced a vape-recycling bin outside her store, which has brought more customers back to her.

Read more advice for independent convenience retailers

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