Category management for frozens is generating extra profit dollars and promoting overall efficiency for Randalls Food Markets, Houston.
In vegetables, Kemp said, Randalls was able to fine-tune ads to target customer differences in both aisles, planogram freezer cases to yield greater profits and sharpen planning in relation to buying patterns in produce.
For example, Randalls is apt to advertise canned produce at the beginning of the month to attract a blue-collar customer, whereas in the past it might have featured both frozen and canned at the same time.
"Maybe I'll put the frozen items in the ads the rest of the month for my other customer with more disposable income," Kemp said. "You could be fighting for the same customer, too. So I can go for a [temporary price reduction] or an in-store reduced retail, mix and match my profitability, and drive cases in one category vs. another. This is how I can micromanage my business, going down another level, or microlevel, to look at the consumer who is picking up those items."
To extract more profit dollars from the frozen vegetable set, Kemp moved high-velocity but low-margined 10-ounce boxes to the top shelf, away from eye level.
"I put in meal starters, a growing category, and moved my 16-ounce polybags into the well," Kemp explained. He also set private label into the center of the frozen vegetable planogram.
Kemp said shopping patterns prove that higher produce prices do not automatically result in the purchase of frozen vegetables. Randalls customers will walk both fresh and frozen aisles, regardless, he found.
On the subject of cross-merchandising meal starters, Kemp said Randalls is talking with major vendors on sharing demos with makers of complementary products such as meat. "We would be getting a double bang for the buck and actually be able to do more demos," Kemp said.