Top-performing retailers generate up to three times more apple category dollars even after equalizing for store size, according to a new analysis released by CMI. The report assesses the key differences between top- and bottom-performing retailers in U.S. markets, identifying strategies used by leading supermarket chains to drive sales and volume growth.
“We looked at three years of apple category performance data for retailers all over the U.S.,” Steve Lutz, vice president of marketing for CMI, said in a press release. “There are some fairly basic approaches used by top retailers to drive apple sales that the guys at the back of the pack miss. It appears that the specific tools consistently used by top supermarkets can be implemented by just about any retailer of any size, but are missed by low-performing supermarkets.”
Lutz said the study reveals how consumers follow retailer cues in making apple purchase decisions at the point of sale. “The research shows that when consumers reach the retail shelf they actively shop the category but ultimately purchase a single variety," he said. "Regular apple buyers are very cognizant of retail price promotions, which can actually create incentives to trade-down from a regular planned purchase at full price to a discounted item, reducing dollar performance.”
Lutz said the most successful retailers actually boost performance by strategically using variety selection, shelf position and merchandising to shift consumers away from low-priced varieties to higher-priced mainline and niche brands.
The study also shows that the most successful retail chains offer much more variety to consumers. “The data shows that the top-performing supermarkets carry an average of 40 unique apple SKUs every week, said Lutz. “That makes for a very dynamic category and allows retailers to mix the promotion and merchandising to drive sales. The low-performing chains averaged only 22 SKUs per week.”
The study results indicate that another key factor in driving apple category performance is how well the chain utilizes niche and branded apples. According to Lutz, the study shows retailers with the strongest apple category performance “maintain a larger assortment of niche and branded apples such as Ambrosia or Kiku, actively working to entice consumers to switch their purchases from lower priced segments into these more expensive but very flavorful apples.
“When you drill down on the store-specific data, it is very apparent that decisions made at the management level are influencing category sales success or even failure,” said Lutz. “One national chain had three banners in the bottom 10 nationally in apple performance primarily as a result of corporate directives in terms of assortment, pricing and promotion. With some fairly simple shifts, they could have an immediate positive impact on their apple sales performance.”
Lutz said that the report has been released and is being used now with CMI retail customers.