The inFlux oF summer tourism isa boon for many c-store operators.That’s why adjusting merchandiseto meet vacationers’ last minute needs has proved to be a winning strategy.
One area that has proved to be especially profitable is health and beauty care(HBC). Retailers report that while categorysales typically hold its own for the first partof the year, it spikes in profitability duringthe spring and summer.
Looking back, Greenville, S.C.-basedSpinx Co. saw an overall increase of 15%to 18% inside sales from January throughSeptember 2006. HBC accounted for aportion of that increase, with its seasonalproducts and brand extensions.
“Regular everyday folks are getting outmore this time of year,” said Terry Taylor,director of marketing for Spinx. “Trafficcounts pick up and we have more opportunities to sell.”
Location, location, location
Canastota, N.Y.-based Nice N EasyGrocery Shoppes make sure to carry summer items for customers visiting nearbylakes or beaches. A summer essential, sunscreen, is expanded with counter units orsecondary displays to accommodate theincreased demand.
“We are not so much introducingseasonal items as we are increasing the inventory on the items purchased more frequently and in greater quantity during thesummer,” said Jared K. Sturtevant, buyerfor Nice N Easy.
Retailers along the East Coast areparticularly susceptible to summer traffic, with mountain and beach destinationspots readily accessible. With the warmerweather comes a “pile it high and watch itfly” mentality, according to Sturtevant.
Because of Nice N Easy’s upstate NewYork location, they “are greatly impactedby the weather. When summer comes, weare well-prepared and have the sales to justify the inventory,” said Sturtevant.
Stores situated in warmer year-roundclimates, such as Spinx, see more interstateand local travelers than beach-goers. Taylornotes his stores’ HBC category relies heavily on customers who pick up single dosesof aspirin or allergy medicine, while suntan lotion is in less demand.
“We have the same customer base during the summer but pick up additionaltraffic from vacationing travelers,” saidTaylor. “It varies immensely depending onthe location of the store.”
Anticipating increased traffic is key.Retailers report they are prominently positioning more “hot” seasonal items from thegeneral merchandise and beverage categories since they tend to carry higher margins.Picnic supplies, beach toys and water canintroduce a seasonal mix, launching warmweather promotions.
Increased promotions from other categories can boost sales of HBC products.When customers come in to buy waterfor the beach, they may realize they’ve forgotten sunglasses or lotion, thus increasingthe potential for add-on HBC sales.
“While we ramp up our inventoryof Gatorade, ice and multi-packsoft drinks, our customers willstop by the HBC section to pick up an essential item or two,”said Taylor. “All seasonal promotions go with boosting othercategories’ sales.”
Nice N Easy relies on past sales datato determine which brand extensions and promotions to run. Tanning lotions, foamcoolers and bug repellants are ordered on abi-weekly basis after an initial distributionto make sure stores are stocked. Categorymerchandisers, managers and supplierswork together to perfect the summer product mix, and watch for slower-movingand non-guarantee items that may needto be marked down after summer starts slipping away.
A matter of convenience
Nice N Easy gains about 10% of its floorspace back after removing winter items.That floor space becomes invaluable whenits overall inventory increases by 20-25%to accommodate the more specific needs ofvacation traffic.
“There are bulky winter items, suchas snow shovels and rock salt, that areremoved so we have the space needed forsummer seasonals,” said Sturtevant.
Families may need beach toys, waterguns or souvenirs. These items are specificby store location, as one store near a beachmay carry them, while a mountain storemay focus on fishing gear. Retailers needto be prepared for these situations the sameas they would regular customer needs.
“Our customers satisfy their summerneeds at a reasonable price with outstanding service,” said Sturtevant. “That’s theadvantage of shopping at a c-store.”