Your sales people need to be in the stores
Watch for changes and new direction
Your sales people need to be great at selling your products. They also need to be students of your customers. They should be in the stores as much as possible and trying to understand where the retailer is focused and how your business can be a part of the journey. As frustrating as it is when they think they have it figured out, it will probably change!
That is part of the job. You want them to represent the customer to your business. Make sure they are helping your business understand what is important and why the retailer is doing what they are doing. Your sales people can learn some of this in meetings and interaction with their key point of contact. They also need to spend time in the stores to see what is happening.
Last week we shared some insights from store visits to Toronto. Always great to get into stores like Eataly, Whole Foods, Longo’s and some of the other speciality stores. They can be great options for some products. We also spent time in Loblaw. They have the largest share in Canada and it is important to see where they are going and understand why.
It just happened that Loblaw was talking about their recently renovated store on The Kingsway in Etobicoke. The press release said “Humbertown, get ready to experience your Loblaws like never before! On Friday, April 24, at 7:45 AM, visit us at 270 The Kingsway, Etobicoke, ON for the opening ceremony to discover a fully redesigned store offering 34,000 square feet of elevated food experiences. The refreshed Loblaws features a new layout, updated signage, and additional service offerings designed to elevate the everyday grocery experience for the Humbertown community.”
I was not in this store before, but their definition of elevated food experiences is different than mine. Overall, I would say they have made changes to reduce expenses with less staff and less inventory. Departments like Natural Food are an aisle and prepared foods seemed to be cut back. I get it. Conventional stores are losing share to discount. Retailers need to reduce expenses and allow them to get prices down or at least closer to discount. It was interesting to see the changes. I also visited the Loblaw City market store at the corner of Yonge and Lawrence to get some comparisons. It really doesn’t matter if I like the new changes or not, that is where Loblaw is going. The important thing is to understand them and help people we work with understand the impact on them.
1. Loblaw are moving to a lot of tray pack and case ready merchandising
It was interesting to see the amount of product merchandised in tear away cases and trays that are shipped inside the master case. No doubt, this is more efficient for Loblaw. Paying people to take cans out of a box and stack them on the shelf is not really value added. One practiced movement to take the top of the case and put the tray on the shelf is much faster.
Suppliers with Loblaw need to be moving in this direction. They are definitely putting this type of product in their conventional stores. In the past this was something more common in discount and definitely a requirement for Costco.
Labour is the largest controllable expense for a retailer. This type of initiative will help reduce this cost. It seems odd to see so much of it in a conventional store but if it helps reduce retails consumers will be fine with it. It will be interesting to see if it really does get reflected in pricing.
2. Private label merchandised in blocks
A big change that we had not seen before was the merchandising of private label in one section and national brand in the next. When I was at Loblaw the practice was usually to merchandise the President’s Choice product beside the leading national brand. If consumers came in looking for Ritz crackers, they would see the President’s Choice option and perhaps switch to private label.
If shelf space allocation is done based on volume this might be an indication Loblaw private label penetration is increasing. If they are allocating 50% of the space to their own brands this would be higher than we would expect.
If you are in some of the categories where they are making these changes it is important to confirm your product is still in the new line up. There are examples where the #3 or #4 brand in the category could be taken out of the plan o gram because there is not room.
3. Natural Food is an aisle, not a department
We know the Natural Food department has been expanding rapidly with a lot of new SKUS. Big players trying to capture this shelf space and more and more innovation bringing new products to the market. It was surprising to see Loblaw eliminate the separate department look for an aisle opposite produce. To be honest we looked for these products for a while before we found them.
The signage is probably more detailed than it used to be. Almost every electronic shelf label (esl) had a sign attached that highlighted why this was a natural food. Not sure if it is because I am colour blind or not but I did not even notice these signs at first. Once I did see them it was apparent what they were doing but I definitely did not see it first time through the store.
There was talk of integrating natural food into the regular grocery plan o grams. A 4’ section of gluten free pasta with conventional products. This might be a step this direction. If you were hoping to get space in the natural food department it is now an aisle. Probably less inventory which is another move to save some money.
4. Significant amount of case ready meat
Meat looked very different in this store. There was a service case but it seemed most of the product was coming to the store packaged. You can see the poultry product in the photo that just needs to be taken out of the re-useable tote and put on the shelf.
If you are in this category with Loblaw it would be a good thing to understand are they looking for more of this and how are they managing the case ready vs more bulk through the supply chain.
Meat was also displayed in clear plastic trays. We are used to seeing it on the white Styrofoam trays. Not sure if this is better for the environment, less expensive or for the ‘look’. Perhaps a combination of these? It was different.
5. Less focus on Canadian
In a recently renovated store we would expect to see the most up to date signage package. There was very little focus on Canadian. The shelf labels did have a maple leaf but there was not much else and we did not see any overhead signage.
This is disappointing. Consumers still want to know and this is still the biggest opportunity for Canadian food and beverage. We are just coming into the free trade negotiations and we believe the rhetoric will be ratcheted up again.
Perhaps retailers are leery after being fined for some wrong signs. It is very unfortunate if we have regulated ourselves out of this opportunity. I appreciate people cheer when the big retailers are fined and they should have robust processes. I still do not believe they were trying to mislead anyone and now it looks like we have lost the focus at retail which is worth so much to suppliers.
Challenge your sales people to get out to the stores and look for changes. You might not always like what you see but at least you will know what is going on.
I do have travel coming up to Toronto, Vancouver, Edmonton, Guelph and Winnipeg so if you want to connect or have an event in any of these locations give me a call or send me an email.
Peter
SKUFood Recipes for Success Podcast
In this episode of SKUFood Recipes for Success, we sit down with Emily O’Brien, founder of Comeback Snacks, whose journey from incarceration to building a purpose driven brand is redefining what it means to make a comeback. Her story is a powerful example that your past does not define your future, and that resilience can be the foundation for something much bigger.
Emily shares how she transformed adversity into opportunity, starting Comeback Snacks from her favourite snack, popcorn, while in prison and building it from the ground up. Rooted in a mission of redemption, her work extends beyond her own story by creating meaningful employment opportunities for individuals with criminal backgrounds. From early challenges to gaining traction in the competitive CPG space, she offers an honest look at what it takes to start over and build a brand with purpose.
We also explore the intersection of purpose and profitability, and how businesses can create real change while scaling. Emily’s story is a reminder that second chances aren’t just personal, they can be a powerful driver of innovation, connection, and long-term success.
If you would like to be a guest send us a note. We are always working on the upcoming episodes.
Food and Beverage Atlantic Supply Chain Showcase
The Supply Chain Showcase is a curated, high-impact marketplace designed to connect Atlantic Canadian food and beverage manufacturers with the suppliers, service providers, and experts they need to scale.
This one-day experience brings processors and solution providers together in a structured format built for meaningful conversations and measurable outcomes. For more information check out the details here:
Mentorship Industry Program Virtual Workshop
This Session is a 2 hour virtual-workshop as an immersive learning experience, with a deep dive into the topic of Channel Partners. It will cover how to find channel partners, what they cost and how to integrate them into your team.
It is not always realistic for producers and processors to do everything. We will also explore the requirements from the customer's perspective and the channel partners they could work with such as brokers, distributors, and retail coverage. These are costs to do business, but getting on the shelf is only worth it when they have the team in place to get the products into the shopping cart.
Loblaw releases results
As each retailer release their results it is a good thing to watch the same store sales numbers. Loblaw reported +2.4% but also said in recently renovated or opened discount stores the same store sales number was double digits.
The discount segment continues to outpace conventional stores. If you back out inflation Loblaw sales are not up much, if at all. With slower population growth any positive comparable sales number is a good one.
Opportunity with Invest NS
Invest Nova Scotia is recruiting for an Export Development Executive (EDE) position, with a focus on the food and beverage sector. This looks like a great opportunity with Invest Nova Scotia. If you like food and beverage, bringing people together and travel this is very interesting. Good to see the support for the industry.
With the focus on Canadian food and beverage we wanted to share a program we have developed with Alain Bosse, the Kilted Chef. We partner to share insights about Canadian food and beverage at conferences and events. We talk about where products come from, share insights about some hidden gems and of course Chef Alain has great tips for using the products at home. This is designed to be entertaining and engaging. Not just for food industry audiences, it works for everyone.