Price-marked pack margins need more attention, says head of Sugro

Price-marked packs present the independent convenience channel with the biggest challenge in the future, the managing director of Sugro has warned.

Philip Jenkins told Retail Express that the increasing amount of price-marked stock in the convenience market is putting too much pressure on retailers’ margins.

“We have to make sure there is sufficient margin structure within price-marks so the independent retailer can operate effectively,” he said. “I fully understand the reason why manufacturers would want to do it, but getting the margin right is also really important.

He said the problem with setting prices on PMPs is that there is often little understanding of the additional operational costs for wholesalers and retailers, such as picking up and delivery costs, the living wage and rates and rents.

“Is all of that being taken into account when a manufacturer sits down and says ‘this is how much margin a product should have?’” he said.

Jenkins called on suppliers to consider increasing their prices on PMPs so retailers do not suffer from price-marked pack margins.

“In some instances, just adding 3 or 4p to the retail price wouldn’t deteriorate the proposition, but it would make a substantial difference as far as the retailer is concerned,” he added.