Floor displays key to profits: Diageo

15 June, 2007

Retailers, wholesalers and suppliers should share the costs of merchandising spirits on the shop floor instead of behind the counter, according to Diageo.

The drinks giant's senior category development manager Belinda Hughes said the investment would be rewarded by an uplift in sales of up to 37 per cent.

Speaking at the Drinksummit conference organised by the Federation of Wholesale Distributors, Hughes said 89 per cent of independent off-licences put spirits behind the counter, and only

1 per cent of shoppers were buying them.

Security measures would deter both casual and determined thieves, she said.

"We're suggesting using caps that can only be removed at the counter. If they're not, you have to break the bottle to get them off. We're preventing theft by under-agers or drunks or those who want to on-sell the product. It allows shoppers to make an educated decision about what brand they want."

Hughes said the cost of buying 50 security caps, a detacher and some merchandising would typically come to 205 and generate an annual revenue increase of 8,800, or 956 in profits.

She recommended placing 70cl and 1-litre bottles on open display and potentially double-facing fractional sizes behind the counter. Whyte & Mackay off-trade sales director Simon Oldham added that profits on smaller bottles could be "two or three times bigger".

Nielsen senior client manager Peter Reynolds echoed the message. He said that premium spirits such as Cognac, imported whiskey and malts were under-trading in independents.

Oldham also encouraged independents to back local products. "I think there is a huge opportunity for us all to find regional opportunities that provide a point of difference for the cash and carry and independent channel," he said.

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