Opinion: Making generic milk brands work for you

This article was written by Darren Park, CEO, United Convenience Buyers for the December/January issue of Convenience & Impulse Retailing magazine.

As a convenience retailer, you know that household staples such as milk are a popular choice for customers, as we make it easy for them to pick up essential items without the need to venture into a large grocery store.

A frequently purchased item such as milk is something that customers will always come back for. So, ensure you have plenty of stock day and night, and you will create loyal customers who consider your store a destination shop for this and other commodity items.

With so many customers shopping so often, white milk presents us with a unique margin growth opportunity, which will drive more profit into your stores – ranging and selling generic brands as an additional offer.

Generic versus branded milk

Did you know… Up to 85 per cent of total litres sold in most convenience stores is generic milk!

How much difference can there be between branded and generic products? There are many instances where the generic product is just as good, if not better than the brand name. Did you know, many generic brands of milk come from the same dairies as branded milk, they are proudly Australian owned and support Australian farmers.

While we all know that big brands are important, customers are shopping in our channel because of the convenience, store location and their ‘top-up shop’ mission.

As a low-priced household essential and with very little real brand differentiation, when it comes to milk, the brand is most often far less important for shoppers than the mission.

With majority of white milk sales coming from generic milk, this suggests that customers are happy to buy generic milk as often, if not more often than the big brands represented in this commodity category.

Generic milk = More margin for retailers

Generic brands are of a high quality and return more profit to you than branded white milk from a lower cost base while meeting the shopper need of the ‘top-up’ mission.

With more Australian shoppers choosing local and convenience stores as their destination of choice, we have seen an increase in the percentage of single unit versus multibuy purchases, which are now 55 per cent and 45 per cent respectively (Source: Provided by UCB Trade Partner).

What do we know about white milk shoppers?

While one-in-five shoppers at petrol and convenience stores (P&C) purchase white milk, only four per cent use the channel as their main store, same as small format supermarkets.

Currently, 26 per cent of shoppers across the P&C channel buy white milk, but only four per cent use our channel as their main source of purchase – these are similar numbers to small format supermarkets (Source: CMA White Milk August 2019 & Shopper Report August 2020).

So, what can you do to drive sales of white milk in your store, but especially generic white milk brands, to maximise your margin?

  • Demonstrate more value to your shoppers

Think about ways you can disrupt, attract, and inspire shoppers to buy more white milk from your store, while preferring generic brands – adding more value is a great way to do this.

Whether it’s cross-category bundling (eg. bread and milk or bread and eggs combo) or highlighting local and Australian made brands.

  • Remind shoppers about milk

As a staple product in most Australian households, milk is regularly bought in a supermarket shop, so why not show, and remind your shoppers that you sell it to?

Think about strong in-store signage or point of sale at key locations in planograms and throughout your store, to help remind shoppers.

  • Planogram for success

Place the range in prime shelf positions and/or close to complementary ranges, such as bread or eggs.

  • Recommend generic brands to your customers

Your milk shoppers are most likely locals who have young and older families and will most likely purchase milk with their bread. Make sure you let these shoppers know that you sell generic milk brands at great prices and great combos for them.

Being in stock day and night when your shopper needs milk will remind them of your offer and can inspire behaviours that will have them coming back for more!

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