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Deloitte: Sales in warehouse club stores to outpace other channels

BY Marianne Wilson

New York — Consumer products executives expect their highest growth to come from the warehouse club channel compared with any other retail sales channel over the next three years, including mass merchandise, grocery, and e-commerce, according to new research from Deloitte.

Nine-out-of-10 (89%) of consumer package goods (CPG) executives Deloitte surveyed expect their company’s sales through the warehouse club channel to increase during that time. This channel is outpacing grocery in CPG companies’ focus, as less than half (49%) expect grocery sales to increase during that three-year period, while one in six (18%) expect sales in the grocery channel to decline.

“Consumer products companies are responding to the increased sales and branding opportunities in the warehouse club channel, particularly in expanding segments traditionally dominated by grocery and mass merchandise channels,” said Pat Conroy, vice chairman and consumer products leader, Deloitte LLP. “Club retailers have been remodeling existing stores, including allocating more space for food – particularly organic, healthy and fresh offerings – and personal care products. These retailers also continue to provide a variety of services and benefits to members – whether it is for personal consumption or for the member’s business.”

Industry executives believe that club stores are increasing their appeal to a wider array of consumers. Most of the CPG executive respondents believe that warehouse club members are making more trips (77%), spending more at club stores (78%), and are finding these stores more appealing than just three years ago (63%).

Deloitte’s report also found that channel conflict with traditional grocery and mass merchandisers – left unmanaged – will rise. Most executives surveyed (71%) believe that pricing differences between warehouse club products increase channel conflict.

In addition to increased channel conflict, Deloitte’s study found that the warehouse club channel presents CPG companies with additional challenges, including club-channel-specific product and packaging, pricing and margin management, and supply chain.

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axelguns says:
May-20-2013 03:55 am

If this is the good news this can be a great help to the consumer like me... I hope this will continue in the long period of time. With lots of competition in the warehouse club store this can make the supply of very cheap. ------------------------------------------------------- http://www.timmccallan.net/

M.Donovan says:
Mar-05-2013 08:42 am

It is a good alternative and for sure many users will think the same. ostsee

M.Donovan says:
Mar-05-2013 08:42 am

It is a good alternative and for sure many users will think the same. ostsee

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Hot Topic CFO to resign

BY Staff Writer

City of Industry, Calif. — Hot Topic announced that its chief financial officer, Jim McGinty, has resigned, effective March 29. The company said that George Wehlitz, VP finance will serve as interim CFO.

McGinty had worked for Hot Topic Inc. for the past 12 years. His resignation is effective March 29.

Wehlitz became VP finance at Hot Topic in 2008. He previously served as CFO at motorcycle clothing and accessories company Cycle Gear Inc.

Before joining Cycle Gear, Wehlitz worked at Hot Topic from February 2002 through November 2005 serving as VP controller in 2002 and then as VP finance from August 2003 to November 2005.

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CPG industry expects highest growth in club channel

BY CSA STAFF

NEW YORK — Expect to see more consumer package goods on warehouse club shelves, as a new survey reveals this to be a high growth area for CPG companies.

According to new research from Deloitte, consumer products executives expect their highest growth to come from the warehouse club channel compared with any other retail sales channel over the next three years, including mass merchandise, grocery, and e-commerce.

Nine out of 10 (89%) of consumer package goods (CPG) executives Deloitte surveyed expect their company’s sales through the warehouse club channel to increase during that time. This channel is outpacing grocery in CPG companies’ focus, as less than half (49%) expect grocery sales to increase during that three-year period, while one in six (18%) expect sales in the grocery channel to decline.

Most CPG and retail executives surveyed expect warehouse clubs to increase the number of food, household goods, and personal care CPG SKUs (79%), expand their geographic presence (75%) and increase space allocated to health and wellness products (75%) in the next three years.

"Consumer products companies are responding to the increased sales and branding opportunities in the warehouse club channel, particularly in expanding segments traditionally dominated by grocery and mass merchandise channels," said Pat Conroy, vice chairman and consumer products leader, Deloitte LLP. "Club retailers have been remodeling existing stores, including allocating more space for food – particularly organic, healthy and fresh offerings – and personal care products. These retailers also continue to provide a variety of services and benefits to members – whether it is for personal consumption or for the member’s business."

Industry executives claim that the reason for the increased availability of CPG products at warehouse clubs is due to the clubs’ broader appeal and more frequent visits by consumers. Most of the CPG executive respondents believe that warehouse club members are making more trips (77%), spending more at club stores (78%), and are finding these stores more appealing than just three years ago (63%).

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