How a food retailer can reverse failing fortunes
As retail sales flatline in many markets, Brain & Poulter’s demographic analysis and data-driven approach is helping food retailers to recalibrate their offerings to meet today’s customer, says director Suzee Brain.
Retail is facing a ‘perfect storm’ of factors that are impeding, and in some cases shrinking, sales growth in retail food, Brain explains.
“Customers expect more than ever before, as they travel and access the internet and are able to see what is happening in other markets,” she says.
“When this is coupled with the failure of some retailers to adjust their concept, positioning and menu to respond to current market expectations, it’s easy to see why some food retailers are struggling.”
Using scientific analysis and hard-won experience, Brain & Poulter works with retailers – usually at the behest of shopping centre landlords – to recalibrate their offerings.
“In many cases, the trigger point may be a flatline in sales, but underlying that can sometimes be problems with long-term profitability or even failure to recognise changing demographics in their trade area,” she explains.
Brain & Poulter has identified seven customer touchpoints that influence a food retailer’s profitability: concept, signage, product and presentation, price points, merchandising methods, customer service and selling technique, and marketing.
The response is different for each retailer, Brain adds. She points to a long-term operator with a chain of grocery stores in outer Melbourne who was “starting to lose relevance” as the competitive environment and demographics changed.
Brain and her team helped the client understand its new customer, and reposition its offering in the market by identifying new products, improving communication and marketing. “We got sales up by 25 per cent over a period of six months, and sales are still rising,” she says.
A sandwich and salad bar in a food court in far north Queensland failed to understand how its offering aligned with the healthy food trend, Brain says. “We worked with them to modify their offering to fit their demographic, by adding more contemporary salads and juices.” Sales lifted by 20 per cent almost overnight, she adds.
Sales success in food retailing isn’t just about the menu, Brain explains. In fact, around 30 per cent of a store’s sales can be generated from first impressions and visual merchandising techniques. A further 10 per cent is driven by regular upselling.
“This means a retailer can lose at least 40 per cent of sales through poor counter displays and customer service alone.
“Many retailers are so busy with the day-to-day business that they don’t have time to do their research. But we do.”