While the $100 grocery basket is melting as fast as the purchasing power of Quebecers, the war is intensifying at the grocery store so that we stretch our arms and buy more. Here’s how the big chains are doing it.
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“Nothing is left to chance at the grocery store. Space warfare is fierce”, the two specialists we spoke to will often repeat.
In fact, the supermarket does not sell food, but space to suppliers. “It’s a showcase,” summarizes Isabelle Marquis, nutritionist specializing in food marketing.
“It’s like real estate. Except that the space is very limited and that it plays hard”, adds Jordan LeBel, professor in food marketing with whom we visited a supermarket.
Space is sold by square foot and linear foot. In addition to these costs, each manufacturer will have to pay for their products to be in the grocery store (cost of listing) and will be responsible for promotional costs (for discounts in flyers).
A scientifically designed journey
In the aisles, everything is thought out to make your basket bigger, whether with pyramids of products, the smell of the bakery or the colors of the packaging.
The grocer’s bible for making us consume more than we want is the planogram. It’s the diagram of the grocery store, which traces the path that we want to take.
“The grocery store now competes with the restaurant. Right from the entrance, in renovated grocery stores, there is ready-to-eat, where the profits are a lot more interesting than in the center of the grocery store,” explains Jordan LeBel.
Even the sense of smell is solicited
It is not rare that in second place, before fruits and vegetables, we find the bakery.
“We bake bread during peak hours to make people more palatable,” notes Ms. Marquis.
Through it all, there are a few product pyramids placed prominently and paid high prices by vendors.
Because the consumer follows the circuit and must decide immediately whether he wants this product or not.
“The pyramids are there to make the basket bigger,” insists Jordan LeBel to the sound of Christmas music in the store.
There is also cross-marketing, which consists for example of putting salad dressings in the fridge near the vegetables. They will be sold more expensive than those on the shelves a little further.
“Everything that is practical has a price at the grocery store,” sums up the marketing professor.
The shelves in the center aisles of the grocery store have also been less frequented by consumers in recent years.
The perimeter is more so.
“We keep the pint of milk well at the back of the store, it’s not for nothing. You will have been bombarded with 10 tempting offers before you get there, ”says Jordan LeBel.
He often recommends that his students do the circuit upside down.
“If you come in through the exit, you’re going to see things you don’t normally see. Because we want you to do the circuit drawn in the planogram,” he advises.
Guided tour of a space where everything can be changed
“Many Canadians are unaware of the fact that in the food industry, suppliers have to pay grocers to do business,” food industry expert Sylvain Charlebois told MPs on the Standing Committee on Agriculture in Ottawa, Beginning of the month. Here’s how it works.
The displays
Photo Julien McEvoy
Each display like this costs the supplier a small fortune, an amount that is passed on to the customer via his invoice.
The success of Favorite Chocolates has opened doors for him. “When your product sells well, the grocery store makes more room for you,” says Jordan LeBel. Here, a display of chocolate fondue is set up right next to fresh cut fruit. A way like any other to increase sales, by suggesting the purchase. “Maybe it will lift and make your basket bigger,” says the expert. The display is on wheels and moves easily, which will happen if sales are not there.
Focus on impulsiveness
Photo Julien McEvoy
Open freezers are used to showcase products that you don’t buy often or may never have made it home.
Open freezers, or tombs, are an opportunity for grocers to place seasonal produce. Here, holiday cakes that will disappear in January. “You don’t buy it every week and not all households buy it,” summarizes Jordan LeBel. It is a product with low sales frequency and low penetration in households, a category on which we rely to increase the basket. “But we won’t stop there, it will take you candles, either those at $1.99 or those at $5.99,” adds the expert.
The linear foot sold expensive
Photo Julien McEvoy
Space at eye level on shelves is worth more than space near our feet. The price of the products found there reflects this.
There is no absolute number that determines the value of shelf space, argues Isabelle Marquis. The cost that a manufacturer will have to pay is negotiated on a piece-by-piece basis and determined according to a set of conditions. The anticipated sales volumes, as well as those of the brands already present in the coveted space, will influence, for example, the price requested by the merchant. Here, the aisle has five shelves. We notice that products at eye level are more expensive. It is also where the price per linear foot and square foot of shelf is the highest. It’s the same everywhere in the grocery store, whether it’s for meats or grains.
The pyramids
Photo Julien McEvoy
Product pyramids cost grocers next to nothing and are a great way to reach out to the consumer.
A manufacturer will have to pay the grocer to have its products sold in the store, in addition to paying for shelf space. A third important cost is added: that of promotions. “It’s not the grocer who reduces his margin when a product ends up on special, it’s the supplier,” sums up Isabelle Marquis. Promotional costs may also include special displays such as a product pyramid at the entrance to the grocery store. “When a category manager manages to charge a supplier for a pyramid, he is very happy,” adds Jordan LeBel. Here, several panettones of different brands gathered in the same place.
Ends of aisles
Photo Julien McEvoy
Beware of products at the end of the aisle, especially in the refrigerated area, because there are products with added value that will quickly inflate your bill.
In the center of the store, end-of-aisle displays have been around for a while and are worth more than the space in the aisle itself. But we’re starting to see them everywhere, even in the refrigerated aisles at the entrance. “They developed small shelves to sell more. We often put value-added products in it,” explains Jordan LeBel. Here on the right are resealable bags of olives for $5.69. Bulk olives would be sold much cheaper. Another way to “enlarge the basket”.
