While our Easter Egg sales were okay and card sales increased more than 10%, it was not until we discounted our Easter Egg range on the Tuesday before Easter that we started to move the volume of eggs we had hoped and planned for.
Our Easter Egg range was excellent. We had it located in prime position for a month prior to Easter. The display itself was compelling – colourful and pitched at various shoppers. Our price policy was competitive, a tad under RRP.
What hurt us was the majors in the shopping centre discounting their Easter Eggs 20% and more … and considerably earlier than usual – one even three weeks before the season. Another was discounting by 50% a full week before Easter. These are discounts off a better buy price base -the negotiating power of a mass merchant is much better than any newsagent or newsagency group but I do not begrudge them that.
They were supporting their discounting with catalogues and, in some cases, ads in the local newspaper – probably paid for by their suppliers. I do not begrudge them that either.
Given that it is just about impossible for us to carry Easter Eggs where the products themselves are the point of difference, we either accept that we will not sell the stock or we join in. So, we joined in on the Tuesday afternoon prior to Easter. It was like we flicked a switch. Customers were spending $50 and even $100 at a time.
Talking with one customer who was in the centre daily, they knew that we would have to drop our price. Their backup was to shop at a major. While the major did not have exactly what they wanted, it would do … because all the kids are going to do is eat it in a day.
For newsagents, Easter Eggs, like everything we sell, are about margin. We need the margin because our our business model. For mass merchants, Easter Eggs are about volume. They want the traffic generation. Also, they make money outside of the actual margin from the sale at the register.
My view is that mass merchants have killed what was a golden egg at Easter for all retailers. Their lust for low margin volume has hurt all retailers including themselves. While shoppers will like this, invariably fewer retailers will carry Easter eggs and this is when margin will creep up and shoppers pay the price, once again.
My concern about Easter Eggs has a magazine connection. Every bundle of current issue high volume titles priced at a discount educates shoppers to look for these deals. I hope that publishers pull back rather than increase their discounting commitment. However, they appear to be ramping this up this year.
It’s interesting how the majors are killing big calender events, I noticed how the Christmas discounting last year was well underway in the middle of December.
I was thinking of this when I read this morning that Bernie Brooks has just finished negotiations with one of the biggest Chinese suppliers for Myer house brand items – which won’t really help Myer differentiate itself from Big W, Target and K-Mart.
It’s hard not think that the major retail chains have seriously lost the plot.
Lost the plot Paul? or is there bigger fish to fry????
Mark I am doing my MBA with a focus on retail trends. What you have written about the majors and Easter (and other seasons) greatly interests me. I would like to explore this further with you and maybe get some more data from you if that is okay.
I think that the Wesfarmers, Coles, Woolworths and Myer groups will look back on some of their recent pricing moves around major seasons with regret.
Thank you for eloquently adding to this discussion.
Just a tip for your MBA Sam. Wesfarmers own Coles. Good luck
No worries Sam you can reach me on 0418 321 338
Mass merchants have broken the Easter Egg and just about every other major retail season. They don;t compete on service so they go with what they know, price and bugger everyone who gets in their way. This is why we have to do things so differently so we are not compared. But that is the billion dollar question.
I’d like to share our Easter. I purchased candy eggs with a little chicken in them (like in the olden days when I was a girl). A friend makes them and we sold them out of gorgeous satin lined baskets and had a sign saying that all proceeds would go to the Church to support water in Africa.
We did NOT put any margin on them at all but gave all the money to my friend who goes to the Church.
HOWEVER—- THE GOODWILL GENERATED FROM THESE EGGS (WE SOLD 200 @ $10 EA)
MEANT THAT WE GOT TO SELL ALL OF OUR PRODUCT WHICH WE PURCHASED AS GIFTS FOR EASTER E.G. PETER RABBIT PLATES AND CUPS AND MUGS AND EGGCUPS WHICH WE PUT AROUND THE BASKET OF LARGE CANDY EGGS, TOGETHER WITH FLUFFY
BUNNIES AND DUCKLINGS
It caused a lot of comment and an awful lot of goodwill and we sold buckets of gifts with excellent margins.
My way of thinking outside the square.