Retailers express concern over PepsiCo’s new larger Walkers cases

Retailers have rejected PepsiCo’s claims that its case size increases on leading Walkers packs will benefit their stores.

The company is moving from cases of 15 to 18 on its 25 bestselling price-marked pack lines, a move it claims was planned in collaboration with stores to help retailers “make the most of PMPs”.

However, analysis by Better Retailing based on the top five bestselling lines affected from a leading wholesaler showed the change will add £2.95 to the average wholesale case price, while the new cases also carried a lower retailer margin, down from an average of 23.2% to 22.6%.

In a straw poll of 17 shop owners, 89% said the change was unwanted and would tie up more cash in stock, while 11% agreed that the move would improve their availability.

Explaining the move, PepsiCo head of wholesale Mike Chapman said: “By making our case sizes larger, retailers can not only avoid losing sales but also continue to meet shopper demand for PMPs. The new cases will roll out across best sellers from our core HERO 25 range, providing an excellent choice for stores looking for strong returns from well-loved brands that deliver on taste and enjoyment.”

Evidencing its collaboration with store owners, PepsiCo provided a quote from Sheffield retailer Mandeep Singh, stating: “The larger PMP cases will allow us to better manage our stock with the demand for PMPs we are seeing, without taking up valuable space in our stockroom.”

Chapman added: “Our latest initiative is just another example of how we continue to work with retailers to ensure the changes we are making have a positive impact on them and their community.  We will continue to work closely with retailers ahead of the rollout and stay close to them throughout the transition.”

PepsiCo added the move will help its attempts to cut the amount of packaging used, claiming the large packs will reduce green house gas emissions related to making the cases by 4%.

Discussing the change Jonathan Cobb BEM, owner of Miserden Village Stores near Stroud in Gloucestershire told Better Retailing: “Our very small shop would have minimally better stock management, and would have to buy Walkers slightly less frequently but that’s about it – from our point of view it equates to roughly two cases fewer per flavour bought per year. But my shop’s initial stock investment cost, and as a result time for the return on investment would increase by 3.6%, assuming walkers increase the price accordingly per case.This money is extremely important for small shops as available working capital is a key in how we work as businesses.

From Walkers’ point of view, it’s a win-win. Increased product per case would see a larger return on investment per unit. Packaging cost would be comparable to the previous box size (other than reworking tooling), but distribution costs would probably also decrease by up to 3.6%. Any wholesale fulfillment charges would also be comparable and remain the same per case.

Unless Walkers passed part of their savings on and increased margins (which I very much doubt they would), I can’t see any benefit to the smaller retailer or consumer. Benefits would be gained for larger shops and supermarkets only, with stock handling times and staff management on the larger case size.”