PG Survey Shows Retailers Coping With Economic Hit

In the midst of a faltering economy, grocers are working to boost sales every way they can. That's the main finding of Progressive Grocer's recent State of Business Survey, in which a total of 60 food retailers took part.

Most of the survey participants operated multiple locations, with 30 percent reporting 201 or more stores, and 26.7 percent saying they run 11 to 50. A significant proportion, however, were single-store operators: 18.3 percent.

Among the marketing and merchandising tactics retailers employed to boost holiday sales at their stores, all survey respondents said they would make use of price promotions such as discounts and coupons on traditional holiday items. Other popular responses were to add new products/merchandise (46.6 percent), hold more in-store events such as cooking demonstrations and samplings (42 percent), and to increase local marketing via direct mail, radio and cable (31 percent).

Heading into the fourth quarter, these retailers were working hard at improving sales themselves and had plenty of recommendations for how suppliers could help in this endeavor. A whopping 73.1 percent said suppliers should provide more consumer marketing specific to their products, while 69.2 percent believed that they should lower their prices. Additional answers were for suppliers to provide more specials such as BOGOs (57.7 percent), offer in-store merchandising/marketing ideas for their product/category (44.4 percent) and extend other types of promotional support (11.1 percent).

When asked whether sales for the third quarter (July, August and September) compared with the same period last year, most respondents (62.5 percent) said they were higher than last year, although a full 25 percent noted they had decreased. Just 12.5 percent saw no change from last year.

The biggest hit to sales during the third quarter, cited by 57.1 percent of retailers surveyed, was lower transaction amounts, or, more simply put, shoppers buying less. Next came lower shopper traffic counts (42.9 percent), overall reduced sales (14.3 percent) and other (3.5 percent).

A seeming paradox between the mostly positive responses to third-quarter sales performance and the large percentage of respondents noting adverse economic effects during the same quarter may be the result of price increases taken earlier in the year and increase in volume, perhaps through more visits in exchange for smaller rings.
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