Meijer's Masterful Candy Merchandising
July 1, 2007
Meijer’s Masterful Candy Merchandising
By Mary Ellen Kuhn
Confectioner’s Retailer of the Year nod goes to this one-stop-shopping powerhouse with an enviable ability to serve up consumer-focused retailing solutions.
Few would argue that the best retailers are the ones that recognize this essential truth: It’s about the consumer.
That’s the way it is for Confectioner’s 2007 Retailer of the Year, Grand Rapids, Mich.-based Meijer Inc. — which, of course, has a lot to do with why Meijer clinched our annual award.
The team that leads this chain of 179 supercenter stores spanning five Midwestern states excels at figuring out what matters most to consumers and serving it up to them. That’s why as gasoline prices headed to distressingly high levels this summer, Meijer gasoline purchasers reaped the benefit of pump prices five to seven percent lower than most competitors. The chain has experimented with text messaging loyal consumers to alert them when a gasoline price increase is imminent. There’s also a fuel rewards program that offers shoppers discounts at the pump based on specific product purchases. Last year the chain even began offering Meijer patrons some of the most commonly prescribed antibiotics at absolutely no charge.
“It all goes back to listening to the customer, identifying how they shop and meeting their needs,” says Bruce Efird, executive vice president of merchandising.
“One of our primary goals is to listen to our customers and react to the feedback as quickly as possible,” seconds candy category buyer/merchandiser Teresa Gunst-Spicer.
Clearly the approach is working. Ray Jones, managing partner of Northbrook, Ill.-based consulting firm Dechert-Hampe & Co. and an architect of the National Confectioners Association’s “best practices” candy merchandising research, has these words of praise for the chain.
“Meijer is really dedicated to merchandising to the consumer and doing it in a way that makes sense,” says Jones. “They’re more of a merchant than most retailers, particularly other big box retailers.”
Retailer of the Year scorecard
It’s not hard to come up with a list of additional factors that played into the decision to recognize Meijer. Other attributes for which Meijer was cited by candy manufacturers and industry watchers include:
A commitment to candy as evidenced by a broad assortment and ample secondary candy placements with display shippers, endcaps and clip strips located throughout its supercenters.
Consistently creative, solution-oriented merchandising tactics.
Solid vendor relations; Meijer enjoys an enviable reputation for treating vendors with respect and creatively partnering with them.
Strong seasonal candy presentations.
A well-conceived, well-executed focus on front-end candy and gum merchandising that isn’t limited to the top 10 or 15 brands.
All in all, it’s no wonder that the confectionery category is a strong performer for Meijer. The retailer treats candy with the respect it deserves, recognizing its potential to grow sales.
“We see candy as one of the ultimate, expandable consumable categories, in that the more you buy, the more it’s consumed,” says Efird.
Of all of the ways in which Meijer excels, perhaps the most noteworthy is its focus on solution-oriented merchandising. What this translates to is figuring out ways to help consumers addresses their shopping needs.
The chain’s presentation of gift box chocolates in the greeting card/party goods aisle is a perfect example. “This provides our customers a gift-giving solution while shopping greeting cards,” says Gunst-Spicer.
The selection is broad and includes brands such as Ferrero Rocher, Hershey’s Pot of Gold, Lindt, Jelly Belly, Brown & Haley and Zachary. A Meijer store Confectioner visited featured a handsome, wood-grain end-aisle fixture showcasing Russell Stover and Whitman’s boxed chocolates.
This sort of approach is precisely the kind of merchandising tactic that NCA’s best practices research recommends, says Jones, adding that Meijer was an early adopter of the approach.
The confections assortment in Meijer stores is expansive, as befits a supercenter retailer. Candy planograms are generated at corporate headquarters, but requests for regional favorites can be incorporated into the sets where it’s appropriate.
The customer base among supercenter retailers tends to skew toward younger, larger families, and Meijer merchandisers have created a novelty/kids candy set with lots of appeal to both kids and parents. There’s plenty of product and price point variety. One of Confectioner’s suburban Chicago store visits showed offerings with price points of 25 cents, 62 cents, 69 cents, $1.89 and $2.29, among others. The price structure also encouraged multiple purchases, with offers such as 3/$4 and 4/$5.
“They do a very, very good job with children’s products,” says consultant Jones. Stores also feature a large assortment of bulk snacks and candy, both wrapped and unwrapped.
A strong mainstream shopper focus hasn’t prevented Meijer from staying contemporary with its assortment. The chain is expanding its presence across the board in organic products, and that has included candy.
In general, Efird reports, “We are seeing an interest from our customers in the better-for-you products, and we’re doing everything we can to ensure that we have the right mix.” He adds that both dark chocolate and sugar-free products are growing segments within the category.
Gunst-Spicer reports that the chain has expanded its assortment of premium bars and pouches in response to increasing consumer interest in more upscale confections.
Meijer takes full advantage of the opportunity to make a strong candy and gum pitch to shoppers as they move toward the checkout. “We focus a lot of time and energy on the front-end,” says Efird modestly.
“Our current front-end fixture was introduced a couple of years ago,” Gunst-Spicer states. “From a confection’s standpoint, this new configuration allows us to better merchandise gum/mints and expand our offerings to include both standard bars and king-size bars.
“We also merchandise nostalgic candy on our front-ends, which includes a variety of old-time candy favorites,” she adds.
But Meijer’s front-end focus doesn’t stop there. Distinctively shaped “arrowhead” merchandising fixtures that face the store at the start of the checkout lane provide the retailer with an opportunity to target shoppers right before it’s time to begin unloading the grocery cart.
“Our arrowhead displays currently offer theater box candy on one side, premium chocolate bars on the other side and gum/mint items at the tip of the arrowhead,” says Gunst-Spicer.
Meijer’s front-ends are exceptionally well managed, observes Jones. He adds that the chain includes some kids’ candy at the checkout, which is something that many retailers neglect.
Tackling the seasons
The Michigan-based mega-retailer also gets kudos for its commitment to seasonal candy sales. “They do a wonderful job with seasonal merchandising,” says Jones. “When you go into a Meijer store at Christmas time,” for example, “it’s really Christmas-y.”
“We really get behind our seasonal candy offerings,” concurs Janet Emerson, Meijer’s executive vice president of operations. “Seasonal candy gets high visibility.”
It’s displayed in the center aisle of the supercenter grocery section, and “typically receives a robust level of space,” says Gunst-Spicer. In addition, she continues, “We also have a seasonal aisle in many of our remodeled stores. This area acts as a secondary location for seasonal candy during our key seasons and provides our stores the ability to offer a broader variety to our customers.”
And Meijer doesn’t limit its occasion-based candy marketing to a “big four” candy holiday focus. For Mother’s Day this past year, Meijer cross-merchandised confectionery items in the jewelry department. Candy and snacks also are included among other products with strong kid appeal that are featured in a summertime “kids’ week” special event.
These sorts of themed events really help set Meijer apart from many other big box retailers, Jones notes.
The Meijer organization is conscientious about the fact that candy needs some close attention from an operational perspective.
“It is a very high-turning product,” says Emerson. “We really recognize that at store level, we need to work to ensure that the department stays full and well-presented and in-stock. The process includes conducting detailed post-season analyses to maintain an optimal flow of product into the stores during seasonal periods.
Meijer also racks up points in the area of vendor relations, and, in fact, was nominated for Retailer of the Year recognition by a leading candy manufacturer.
Consultant David Biernbaum, who has worked with Meijer buyers and marketers, praises members of the retail team for their ability to think outside the box.
“Basically, I think Meijer is in an enviable position because the retail chain is large enough to be important to suppliers, customers and vendors, and yet the chain remains independent, agile, and regional enough to be very entrepreneurial and responsive to do the extras,” says Biernbaum, senior sales/marketing consultant, David Biernbaum Associates, St. Louis. “As a supplier-vendor and consultant it is relatively easy for me to work with Meijer’s marketing department and procurement people to make special events happen that are very productive for Meijer, the branded suppliers, and its loyal customers.”
Meijer has been busy of late unveiling new prototype stores and remodeling existing ones. The new format does even more to foster consumer convenience with logical department locations and adjacencies that make the shopping process easier. Jewelry, greeting cards and floral, for example, have been moved up close to the front end to address consumers’ need for one-stop gift shopping.
The Michigan-based retailer has identified suburban Chicago as a key target market for new stores. There are currently nine stores in the Chicago area, including one that made its debut in the suburb of Oswego earlier this summer.
With the long-established Albertsons-owned Jewel and Safeway’s Dominick’s dominating the market, Chicago is a tough area for a grocery retailer to crack. Consultant Biernbaum forecasts a continued successful expansion in metro Chicago, however, “because they tend to be situating themselves in younger suburban neighborhoods.
“Also, Chicagoland is part of the same Midwestern region, not far from the concentration in Michigan, Indiana and Ohio,” Biernbaum adds.
Meijer’s overall expansion agenda includes a total of five new stores this year, with seven additional stores planned for 2008.
True to its roots
One of the things that many industry watchers — and consumers as well — appreciate about Meijer is its strong grocery orientation, which can be traced back to its origins. Founder Henrik Meijer started as a grocer in 1934, and today the grocery strengths are a very central part of Meijer’s place in the marketplace.
“They have not lost sight of the fact that the consumer is coming into the store first and foremost for food items,” says Jones, who likes to think of the supercenters as “groceries plus” despite their massive footprints.
He sees that as a key advantage in the many markets where Meijer goes head-to-head with Wal-Mart.
“They use their food items to lead the store,” says Jones, adding that this is not the case with Wal-Mart supercenters.
“My belief is that they [Meijer] have carved out a place in the marketplace that is fairly unique,” Jones observes.
Meijer Fast Facts
Origins: First store opened in Michigan in 1934
Headquarters: Grand Rapids, Mich.
Ownership: Privately held, owned by the Meijer Family
Annual Sales: $14 billion*
Number of Stores: 179
Size of New Stores: 210,000 square feet
States of Operation: Michigan, Ohio, Indiana, Illinois and Kentucky
How Meijer Defines Value
Meijer’s frequently touted tagline — “higher standards, lower prices” — does a good job of communicating its positioning in the marketplace. The chain’s prices tend to be lower than most supermarkets, but a bit higher than Wal-Mart. It’s important to note, however, that value at Meijer is not just about price, but also about product quality and convenient consumer shopping solutions.
Meijer gets its price/value message out to consumers via a “Weekly One Stop” advertising circular. In addition, about a year ago, the company rolled out an ambitious price-cutting initiative — its “Price Drop” program of unadvertised specials. Price Drop features price reductions on a rotating assortment of roughly 5,000 products. New items are added to and dropped from this special sale assortment on a weekly basis.
To keep the program front and center in consumers’ consciousness, price drop items are flagged at the shelf level, with aisle signage and with floor graphics. It’s an interesting approach, industry observers note, because it allows the retailer to reap some of the benefits of both EDLP and high-low pricing strategies.
A visit to a Chicago area Meijer store this summer revealed plenty of promotional activity in the candy aisle. Price Drop specials, for example, included such candy bargains as 5/$5 Tootsie-Roll brand theater boxes, a six-pack of Snickers bars for $1.99 and Nestlé Treasures Gold Bars priced at 2/$3. Candy-loving shoppers also had the option of scooping up two Hershey laydown bags in order to get two free.
Meijer’s marketing, advertising and merchandising tactics aren’t limited to traditional approaches. The chain also is aggressively focused on the digital marketing arena. The Meijer Web site is localized by store and has the capacity to offer visitors to the site customized promotions.