As 2016 draws to a close, we will take this month to review the many exciting opportunities and challenges Pinnacle responded to this year and what we have to look forward to in the coming year.
At NACS State of the Industry, the prevailing wisdom was to move away from tobacco- and into more lucrative profit-margin rich areas such as foodservice. Foodservice accounted for 20.8% of in-store dollars, and 33.7% of gross profit dollars in 2015. Tobacco products contributed 35.9% of in-store dollars, though only 16.8% of gross profit dollars. “It’s no surprise that the top quartile does about two times the business of the bottom quartile does in most core merchandise categories.” Andy Jones, president and CEO of Sprint Food Stores, Augusta, GA said. “But food and dispensed beverage is where the top quartile has a vast difference over the bottom quartile. The gap between the top and bottom quartile is over five times in hot dispensed beverage and almost four times that in prepared food. In a nutshell: The top quartile companies in this room are killing it in foodservice.”
Retailers are faced with the challenge of keeping store shelves replenished not only with the correct products but also the correct amount of products. In no other product category is that more true than tobacco. Mismanaged store inventory can be a serious problem for retailers: often the wrong products are being ordered, higher quantities than needed are ordered on slow moving products, and low quantities are ordered on those with high demand. Overstocks and out-of-stocks can cause major problems; sending customers to competitors when the item they need is crowded out from slow moving stale merchandise.
Convenience store retailers navigate a complex inventory terrain on a daily basis. Managing time-sensitive merchandise, increasing variety, age-restricted inventories, rebates and more; managers need access to business information quickly and easily. They also need an effective system to utilize that data in ways that grow profit margins, decrease shrink and gain a true competitive advantage.