Keep candy in the aisles - studies indicate importance of merchandising products in store checkout areas

American Demographics, July, 1998 by Marcia Mogelonsky

For most shoppers, the checkout lane is the final hurdle-choosing the right lane and getting out of the store quickly is a major objective. Retailers, however, view the checkout lane as a "last chance" area-the place to sell impulse items such as candy and magazines, as well as small, but profitable, necessities such as batteries and razor blades.

Stores have been experimenting with checkout configurations over the past five years. Some retailers bared the front end, thinking that a clean checkout would satisfy the consumer's desire to complete their shopping transactions quickly. Others tried changing the product mix. Some tried to entice consumers to "shop" the front end by alternating confectionery with non-foods, hoping that a shopper would choose a checkout lane based on its displays rather than line length. Still others established "candy" and "no candy" lanes for parents shopping with children.

Last year, the LifeSavers Company developed a category-management strategy with Meridian Consulting Group of Westport, Connecticut. "This was the first study to demonstrate the importance of the front end as a sales area of the store. It showed retailers what customers want, and it also provided the measures retailers needed to make viable decisions about the front end," says Michael P. Shinall, managing director of Meridian Consulting Group.

The results showed that 1 percent of total store sales-an estimated $4.2 billion annual store volume-was generated by front-end sales. On a per-square-foot basis, the front end accounted for eight times the total of all weekly store sales. Candy and magazines were the most profitable items, both in retailer gross-profit dollars and consumer impulse, with candy alone accounting for more weekly sales per store than all other categories combined.

A second study, commissioned by M&M/Mars, Inc., of Hackettstown, New Jersey, and Time Distribution Services (TDS) of New York City, and undertaken by Dechert-Hampe & Co. of Mission Viejo, California, confirms the results. This study analyzed retail audits of 500 stores and conducted more than 500 in-depth shopper interviews, and found that the front end represents a $5 billion opportunity. Gum or mints, candy, and magazines are the three most popular checkout items. Almost two-thirds of shoppers purchase gum or mints at the checkout once a month or more, 56 percent purchase candy, and 48 percent buy magazines. Overall, the Mars/TDS survey concludes that 46 percent of all shoppers make checkout-line purchases at least once a week.

More than two-thirds of consumers agree that the checkout lane contains a lot of products they don't need. To maximize the potential of the front end, both these surveys agree-keep the candy and gum up front.