Case Study
Leading Grocery Chain Increases Traffic with Differentiated Selection of Fresh Products
How High-Quality Fudge Increased Margins And Shopper Loyalty
The Need
A regional grocery chain of 200 stores has traditionally established its supermarkets in communities under-served by larger chains. However, the encroaching competition of larger established chains and other digital behemoths now offering online grocery shopping experiences is driving the company to expand the services it offers to shoppers and to employ aggressive marketing techniques to retain its loyal following.
The multibillion-dollar supermarket chain has been in business since 1963 and credits the combination of service, product quality, wide selection and strategic footprint with its continued success.
Value in Fresh Products
The business-savvy leadership team realized that internet shopping was a new type of competition. While online channels have been eroding other types of retail for many years, the encroachment on grocery is a newer phenomenon. The company sought to build up the selection of fresh products it offers as a way to stay relevant and keep shoppers walking through the doors.
Packaged Can Be Fresh
While evaluating the hundreds of fresh items sold, it became clear that the quality of the fudge carried in store could not compete with small retail shops that sold fresh fudge made on-site.
The grocery chain needed to find a partner who could provide private-label fudge just as delectable as that found at the local general store or specialty candy store. This would be a key differentiator for the business in a marketplace experiencing significant change.
Vice President of Bakery
The Solution
Through networking, the Vice President of Bakery learned about Calico Cottage as the gold standard in the fudge industry from an expertise and product quality perspective.
He approached Calico’s management team and requested that Calico come up with a solution that would allow him to sell high-quality fresh fudge packaged in his stores, under his store’s brand. He knew if the product quality was there, that it would be a reliable item in his bakery sections.
Calico crafted a program to supply fresh fudge for all the bakery departments within the grocery chain. With over 50 years of fresh-fudge experience, Calico provides its retail partners with everything they need to succeed, including branded product packaging, marketing materials (signage and promotional ideas) and sales best practices. Given several options, the chain decided to participate in the Made to Order Bulk Fudge program, where they received full, freshly made slabs of fudge that they cut and packaged themselves.
Calico Provided:
Several suggestions of how to maximize volume and profit results leveraging its prior success with retail programs for grocery and supermarkets
Recommendations of specific, focused flavor assortment throughout the year, which increased the turns for the item (based on understanding the region and seasons)
Training on how best to merchandise the product to drive sell-through
The faster turns driven by quality, selection and merchandising yielded virtually no shrink – an important consideration (unheard of in the bakery section!).
The Results
With The Switch To Calico, This Chain Doubled Its Sales In Units Over The Fudge They Were Carrying Previously.
This is extremely impressive because they also increased the price from $3.99 for 10 oz. to $5.99 for 8 oz. The Calico Fudge Retail Program is still going strong after four years, representing one of the highest margin items in the bakery at more than 50 percent. The Vice President of Bakery states, “It’s delicious – the best thing by far in the bakery.” Annual sales are north of $1 million. The VP of Bakery knows the success stems from the right selection, the right type of merchandising and the highest quality product available. He said, “I just saw two shoppers walk by the fudge display and grab a package, without hesitation, as part of their shopping routine. When I see that, I know I have them.”
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