MANAGING A CATEGORY'S ATTRACTIVE UPSIDE PROFIT POTENTIAL

David Merrefield

Suppose there were a product category that had the potential to produce twice the profit per square foot as many others in a supermarket and that still had a big consumer upside. Would you go for it?

According to one expert quoted in a news article on Page 46 of this week's SN, there is such a category and it is florals. There can be little doubt that at many supermarkets, florals get short shrift despite the potential they hold. He spoke at the Produce Marketing Association's meeting.

Further to that potential: Our expert tells us that some 33% of all floral sales emanate from supermarkets, and in many instances, are growing in supermarkets despite the fact that they are seldom seen as sales stars there. By contrast, sales at stand-alone floral shops, where they are the core of the enterprise, are in decline.

Consider this too: The per capita spending on flowers in this country is $70. In many European countries, that spending is seven times larger. The total value of the category in this country is about $19 billion. (For more on how that sales level is achieved, by variety, see "The SN List" on Page 26.)

The relative neglect, or worse, of florals in supermarkets seems a bit reminiscent of the now-wilted Meal Solutions initiative. The concept was great, and many supermarkets have done well with fresh-prepared offerings. But at many others, it remains a category that's seen to be outside the core of what supermarkets do, and is poorly executed or not done at all.

What can be done to lift supermarket florals from such a fate and bring the category to its potential? Here are a few tips from our expert:

Staffing: It's axiomatic that a great staff is needed to produce a good department, but where to find good staffers? Don't look to floral shops. After all, they're in decline. Look to someone who knows how supermarkets operate and who can relate well to customers. Distribution: Involve the distribution system. Too many florals perish at the warehouse and in the distribution system. Be sure they are afforded careful handing and that temperatures are well maintained, just as for any perishable product.

Right price: Be sure to price the product at a level that will produce an attractive margin. Don't price off competitors. After all, consumers are likely to buy flowers on impulse at a supermarket and are not likely to have any idea of how much they should cost.

Right look: Be sure the in-store department is well maintained every day. The day after peak holiday selling periods, the department should look as good as before the holiday. Florals can be sold every day.

Let's move now from colorful floral departments to another color concept. Many SN readers will have noticed by now that a new color scheme has been applied to these pages.

Each SN section has been assigned a color that appears on its opening page and that's continued through the section by means of a color bar across each page. The colors should be considered navigation bars of sorts that will help guide your reading of SN each week, making it even easier to identify SN's various news and product sections.