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Retalier Margin - Snacks

Discussion in 'General Business Forum' started by Jack37, Oct 19, 2017.

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  1. Jack37

    Jack37 UKBF Newcomer Free Member

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    Hello everyone,
    I was wondering if anyone could help me identify the profit margins retailers seek in the snacking isles i.e. crisps isle?
    I am responsible developing the market for a snack brand therefore, I need to find out the margins retailers need in order to build up my pricing.
    Thanks!
    J
     
    Posted: Oct 19, 2017 By: Jack37 Member since: Oct 19, 2017
    #1
  2. Mr D

    Mr D UKBF Legend Free Member

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    Is it crisps in particular, if so what size bag?
     
    Posted: Oct 19, 2017 By: Mr D Member since: Feb 12, 2017
    #2
  3. The Byre

    The Byre UKBF Ace Free Member

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    Nothing about that statement makes sense.

    Snack brands require huge launch budgets and above-all, very experienced marketing people.
     
    Posted: Oct 19, 2017 By: The Byre Member since: Aug 13, 2013
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  4. Jack37

    Jack37 UKBF Newcomer Free Member

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    Thanks for your reply. It is a kind of multi grain crisps and its pack size is 85g. The product will be VAT'able in the UK.
    The Byre - I am trying to find out what is the average profit margin in a snacking isle. I need this to in order to come up with a RRP. It may not make sense to you because you did not read the question properly.
     
    Posted: Oct 19, 2017 By: Jack37 Member since: Oct 19, 2017
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  5. The Byre

    The Byre UKBF Ace Free Member

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    Heavens to Betsy!

    I was (obviously not directly enough) implying that you might like to revise your position here, as marketing person for a bag of alternative crisps. Impulse buys enjoy what is known as a 'mixed calculation' - i.e. some have a massive mark-up, some are linked to high- or low-mark-up products and some are sold as loss leaders.

    This is not just true for snacks, but right across the whole grocery business. Right now, all the supermarkets are selling dairy products at a loss, some sell some veg at a loss and in Summer, it is normal to sell strawberries at a loss.

    Sometimes, certain products that appeal to key demographics are sold at a loss to get them in the shop to buy high-mark-up items (e.g. WD40 cans for £1 to get men in to see tools and whisky, which have high mark-ups). The week that Lidl had a great offer on luxury Belgium chocolates, they were selling sewing machines and other 'female' items.

    A subscription to The Grocer might be in order.
     
    Posted: Oct 19, 2017 By: The Byre Member since: Aug 13, 2013
    #5
  6. Mr D

    Mr D UKBF Legend Free Member

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    Asked the owner of my local corner shop, his answer 45p.
     
    Posted: Oct 19, 2017 By: Mr D Member since: Feb 12, 2017
    #6
  7. Jack37

    Jack37 UKBF Newcomer Free Member

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    The Byre - In order for me to position my self I need to come up with an rsp. Based on the retailers margin, which will hold the lions share in our pricing, we will then be able to determine whether we can incorporate any marketing supprort into the pricing or offer a competitive price all the time instead and run limited promotions.

    I assume you know that in the crisps or snacks isle 80% of sales come from promotional items. So brands with huge mark-ups can build very little marketing budget when selling at full price.

    So for us it is important to know what is the category average profit margins are for crisps/snacks. It will make a huge difference if the category average is 30% or 40%

    Thanks
    J
     
    Posted: Oct 19, 2017 By: Jack37 Member since: Oct 19, 2017
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  8. The Byre

    The Byre UKBF Ace Free Member

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    And to answer your question, there just is no answer. What do I say? -50% +100%? And at what volume? 1m, 2m, 20m? What?
     
    Posted: Oct 19, 2017 By: The Byre Member since: Aug 13, 2013
    #8
  9. Jack37

    Jack37 UKBF Newcomer Free Member

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    Thanks for trying to help... But coming from an fmcg bacground, I know for a fact thay every category category has an average Profit margin. Many thanks
     
    Posted: Oct 19, 2017 By: Jack37 Member since: Oct 19, 2017
    #9
  10. The Byre

    The Byre UKBF Ace Free Member

    9,803 3,970
    The days of looking at the crisps and coke isle and stating that it has a specified average mark-up are over.
     
    Posted: Oct 19, 2017 By: The Byre Member since: Aug 13, 2013
    #10
  11. Mark T Jones

    Mark T Jones UKBF Big Shot Free Member

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    You come from an FMCG background but don’t know this
     
    Posted: Oct 19, 2017 By: Mark T Jones Member since: Nov 4, 2015
    #11
  12. GTL

    GTL UKBF Regular Free Member

    182 31
    Work on 40 percent . 3 x promo per year margin maintained.
     
    Posted: Oct 19, 2017 By: GTL Member since: Sep 18, 2017
    #12
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