Healthy checkouts: impuse buys

07/01/2013 09:40:00 AM
Lynn Morely

click image to zoomhealthy checkout supermarketArteaga's Food CenterArteaga's Food Center offers fresh and dried fruit, nuts, water, yogurt and granola bars in its healthy checkout pilot for the Network for a Healthy California retail program. There’s no doubt about it: Increasing sales of fruits and vegetables is no longer just a matter of increasing consumption for the benefits of the nutrients they provide. Obesity rates are at an all-time high and are only increasing. These days, the need for produce marketing is essential, because Generation X is the first generation that is not predicted to achieve a greater life expectancy than their parents.

“Generation X was blindsided in its formative years by suddenly time-starved parents who no longer had time to cook balanced meals,” says Chuck Underwood, president of The Generational Imperative, which consults and trains organizations in various generational strategies. “So GenX kids began the epidemic youth obesity. It continues to this day with Millennials, but parents and schools are starting to push back, so we should begin to see different health core values in a few years.”

Although produce marketing is getting savvier, it has yet to capitalize on impulse purchases at the checkout stand. Nine out of 10 shoppers make impulse purchases, according to a recent survey by “The Checkout,” an ongoing series of shopper-behavior reports published by the retail branding firm The Integer Group.

“That’s an opportunity where people can make a difference,” says Carlos Torres, retail manager for the San Francisco Bay Area for the Network for a Healthy California. The organization’s retail program is designed to help retailers increase fresh produce sales and promote a healthy lifestyle. One such initiative is the Healthy Checkout Lane.

“Produce is particularly profitable for retailers,” says Elizabeth Pivonka, president and CEO of the Produce for Better Health Foundation, Hockessin, Del. “And people are more likely to pick it up if it’s in the checkout lane.”

According to PBH research of primary shoppers in 2012, supermarket flyers, newspaper ads, and signs on supermarket displays rank higher than television, radio, Internet advertisements, billboards and social media as the communication methods shoppers find most effective when it comes to making a food decision.

 

 

Profit loss, or profitability?

 

 

Lupe Lopez, owner of Arteaga’s Food Center, a small chain of 10 stores in the San Francisco Bay Area, points out that produce has a bigger profit margin than the candy. Arteaga’s Food Center is one of the pilot stores for the Network for a Healthy California retail program. When she was approached by the network, Lopez says she didn’t have to think twice. She knew it was a winning idea.

Dave Worst, manager for Foodland in Parkersburg, W. Va., says, “My business is about turns. Candy bars turn, but I get $3.99 for a package of trail mix. How many candy bars do you have to sell for a $4 ring?” Worst’s Foodland designated a “Healthy Options Aisle” at the encouragement of the Mid-Ohio Valley Health Department. With a grant from the national Centers for Disease Control and Prevention’s Communities Putting Prevention to Work program, the Mid-Ohio Valley secured the commitment of several Foodland and Wal-Mart stores to implement the Eat-Well-Play-Well pledge. The retailers agreed to create a health-centered checkout aisle, which included food items with high nutritional value and toys that promote physical activity.

“The first day, I was actually shocked at the amount of products we sold that we changed out,” Worst says. “The banana chips, the dried fruit and the individual prunes were a real big seller. I was kind of amazed it was actually working.”

Three Bentonville, Ark.-based Wal-Mart Stores Inc. locations accepted the challenge, as well. Store manager Kevin Ohse reported triple sales for some items.

It was the first time Wal-Mart had opened healthy checkout lanes at multiple stores in one area, says Rebecca Payne, who directs the CDC’s Communities Putting Prevention to Work campaign. “The response has been very, very solid from the West Virginia customers,” she says.

In Virginia, Martin’s Food Markets, a banner of Giant Food Stores LLC, Carlisle, Pa., followed suit with the Healthy Ideas checkout lane as part of a test project supported by a grant to Greater Richmond Fit4Kids and the Richmond City Health District from the Virginia Department of Health. Of the 23 Martin’s stores throughout the Richmond area, eight were selected to participate and dedicate two lanes as Healthy Ideas lanes.

 

Taking stock

 

 

 

You can look in almost any store and find a stand of bananas at the edge of the checkout lanes. That’s not what’s going to set you apart. You don’t want to neglect the bananas or the apples, but you do need to expand your thinking.

Your choices are actually more plentiful than the space you have to fill. Nuts, seeds, trail mix, dried fruit, granola, mandarin oranges — all of these items pose easy display possibilities. But you should also be thinking about what’s on ad, what your dietitian is promoting, what’s in season, and what’s locally grown — all with your store’s demographic in mind.

Lopez includes mango, guava, pineapple, cherries, and locally grown corn and chiles in Arteaga’s dedicated checkout lane.

“I can actually move a lot of fruit through that aisle,” Lopez says. “It’s not something you’re losing money on. It’s an opportunity to increase sales.”

The lanes at Martin’s Food Markets are stocked with fresh fruit, freeze-dried fruit, nuts, water and other healthy beverages, and packaged snacks meeting specific nutrition standards as determined by store dietitians. The magazine rack contains only health-related publications. One year later, the program is still going strong.

“These stores demonstrate that customers do want these items,” Payne says, “and they can prove with sales data that these products do move.”

 

Pricing

 

 

 

Interpreting sales data can be tricky, however. Unless you’re prepared to track the price with different SKUs, keep it simple and offer the same per-pound or per-each pricing you normally do. Lopez says she prices items in the healthy checkout lane by the unit. The key is to stock the aisle with same-size like items, so that the unit price can be made equivalent to the per-pound price. That way it doesn’t matter if the cashier rings the items up by the each or the pound, and customers aren’t wondering whether they’re getting a better deal on the small bananas or the large ones. Avoid this altogether by stocking just one size banana, and create separate baskets for large apples and kid-size apples.

Although Lopez says it’s been difficult to track the sales dollars generated from her healthy checkout lane, she knows it’s working for her. “I sold a pallet of strawberries in a weekend. That’s a lot of strawberries to sell in one weekend for one store.”

Lopez says produce at the checkout stand is so popular that in addition to her dedicated healthy checkout lane, she made room for a basket of produce by every register.

 

Anyone can do this

 

 

 

You don’t need in-store dietitians, the backing of government funding, or any other help to get started. In fact, if you’re really tight on resources, you can even start without signage.

If you stock the aisle well, it will be visible to your customers. All you need is a checkout lane, shelves and a beverage cooler. That’s right. The Coca-Cola or Pepsi cooler currently greeting customers as they enter the checkout lane could be your new produce reefer.

Lopez says she’s well within her contract to keep two shelves in the cooler stocked with anything she wants. (As for the rest of the cooler, she stocks only the beverage company’s bottled water.) Lopez often stocks the cooler with fresh-cut produce and yogurt.

If you do have an in-store dietitian, enlist his or her help in choosing healthy and appealing foods from around the store. It can be especially effective if the items are reflective of your ad that week. If it’s not on ad but the dietitian is promoting it for health reasons, be sure to include something from that promotion in your checkout lane. One benefit to partnering with store dietitians is that they measure the return on investment for everything they do, Pivonka says. So you can feel more at ease knowing their recommendations for your healthy checkout lane are in high demand.

If you’re still having reservations, hear this: Healthy checkout lanes do not garner complaints from customers. After all, the empty-calorie treats are just in the next aisle over. But if you have doubts about the lack of decadence in your aisle, turn to the candied nuts, such as glazed or cinnamon-coated. A popular choice for Arteaga’s Food Center is raspberry-honey almonds.

“I think I’m the only store in the area that has a healthy checkout lane,” Lopez says. “Some people think it’s a losing proposition, but it works. If you have more than three checkout lanes, (a dedicated lane) is doable.”

So what’s stopping you from transforming one checkout lane in at least one of your stores?



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