Supermarkets
Supermarkets still have the biggest share of retail sales, and in Australia two supermarkets, Woolworths and Coles, dominate the market.
To maintain growth, the big supermarkets are extending the lines they carry into non-traditional areas. Examples include the move by Woolworths into petrol, and the sale of financial and telecommunications services through supermarkets.
You should think seriously about whether your business is ready to supply supermarkets and chain stores.
While significant money can be made from supplying larger retailers, they are particularly aggressive on pricing, and producers should expect to be squeezed for price cuts, volume discounts, promotional offers and extended terms of trade.
Larger retailers will generally expect significant contributions toward marketing costs, including in-store displays and sampling activity. Food producers who decide supermarkets are important to their distribution strategy should be prepared for the additional costs involved in gearing up for volume production and in marketing products.
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Sealing the deal
If you decide to target this supermarkets as your distribution channel, you can improve your prospects by ensuring that:
- your products are inherently attractive and appealing
- your products are appropriately packaged, bar coded and priced
- your production systems can assure consistent quality
- you are geared for volume production
- you are priced appropriately relative to substitute products
- your marketing information and business systems project quality and professionalism
- you have references who are willing to support your product and your ability to deliver
Find out who the buyer is, and send them a product sample, with a package of information including details of the full range and future plans, packaging sizes, wholesale prices, and your volume capability.
Follow up with a phone call. If this leads to a meeting, prepare thoroughly, and expect to make changes to accommodate buyer preferences. If you are not successful, leave the buyer alone until you have something new to announce or the buyer is replaced - then try again.
Point of sale (POS) material
Whether selling in your own retail outlet, through supermarkets, or setting up a display at a trade/consumer show, point of sale material is an important element of the visual display.
Point of sale material can include:
- Branded price cards
- Branded shelf talkers
- Branded information sheets
- Branded flyers and brochures
- Recipe suggestions
- Posters and banners
- Maps
- Racks and stands
- Other props (i.e. baskets, vases, flowers, greenery)
It is important for the point of sale area to be consistent, no matter where the display is. A simple way to deal with this is to get a visual display consultant to develop several options depending upon space available, type of event and needs of the customer.
Whilst developing your point of sale materials and kit, take time to look at others and see what works i.e. different levels of height in a display and different use of your brand colours.
How has the SA Food Centre helped others?
There SA Food Centre has South Australian food businesses with advice on product development for supermarket distribution.
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Who can I contact?
The SA Food Centre is experienced in helping food business establish relationships with supermarkets. In contacting us we can provide advice and assess your business needs.
- Page last modified: November 15, 2011, 5:52 pm
- Welcome URL is http://www.safoodcentre.com.au/
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