Supermarket Sales Data Reveals P-O-P Power Players

Ever wonder which vendors are the biggest users of P-O-P in supermarkets? As a rule, you should look to the market-share leader in a given category, according to new data provided exclusively to P-O-P Times by Information Resources Inc.In most cases, the company with the biggest share of total sales in a particular category proved to be the heaviest user of P-O-P. In fact, they typically registered an even larger share of the category's sales that are generated through display activity.During the summer of 1994, the editors of P-O-P Times asked IRI, a Chicago-based research company, to conduct several customized searches of the company's tracking data service. The goal was to ascertain which categories and vendors generate the most dollars through display activity.In recent years, P-O-P Times has published several reports using IRI data that shows the positive effect display has on sales. However, this is the first to report actual dollars generated as well as the display activity of specific companies.Category MagicIRI's InfoScan Supermarket Review encompasses nearly 250 product categories grouped into eight departments: Bakery, Dairy, Deli, Edible Grocery, Frozen Foods, Health & Beauty, Non-edible and General Merchandise.The company uses checkout scanner data to track price, price changes and distribution at 2,700 supermarkets with annual sales of $2 million or more. These 2,700 stores comprise a projectable sample that represents 87 percent of chain All Commodity Value -- or ACV -- in the United States.IRI also reports on the percentage of a category's total sales that can be attributed to display activity and feature ad support. IRI auditors collect this information by location on a weekly basis.In IRI's parlance, displays are defined as secondary locations that are separate from a product's normal shelf space. All off-shelf locations are counted as displays, including special baskets, end-aisle and free-standing units. IRI's methodology includes long-term secondary locations for seasonal items as display, but does not include permanent displays. IRI auditors visit the stores regularly to track the use and movement of displays.Feature ads are defined by IRI as advertisements for single products in advertising sections that are either distributed to homes or are available to shoppers in the store. Shelf talkers are not included as ad features. The IRI staff monitors daily newspapers and in-store fliers, transferring that data to the company's computerized data base.The first custom search was run on all of IRI's supermarket categories. It reported the total sales generated in each category for a one-year period ending June 19, 1994.In addition, two key data breakouts were added: (1) the percentage of total dollar sales attributable to display only; and (2) the percentage of total dollar sales attributable to feature ad & display activity. These two figures were then combined to produce a new index, percent of sales generated via displays. The charts titled "Sales Generators" and "Display Driven" show the results of this initial search, including this new index.Peak TimeThe Sales Generators chart lists, in descending order, the 40 product categories that derive the most dollars from display activity. This list was compiled by multiplying the category's total sales by the new index, percent of sales generated via displays.The Carbonated Beverages category, which annually generates more than $5 billion through display-related sales in supermarkets, topped this list. The heavy use of P-O-P (52 percent of sales are produced via displays) reflects just how competitive the soft-drink category has become. While brand loyalty and heavy media advertising is regularly noted in soft drink marketing, it is clear that securing highly visible secondary display positions is just as critical in the market share wars. Soft drinks may be on the customer's shopping list, but a particular brand must be seen to regularly make its way into the shopping cart.Indeed, a review of the categories topping the Sales Generators list reveals a definite pattern. Most of these products are driven by discretionary spending and can be classified as leisure-time foods:Carbonated Beverages ($5.2 billion in sales produced by displays);Chips & Snacks ($1.6 billion);Beer & Ale ($1.1 billion);Cookies ($769 million);Candy/Mints ($703 million);Crackers ($627 million).While some shoppers might consider some or all of these products to be staples, the high dollar volume generated via display reinforces a basic message: P-O-P is one of the most important tools in the overall marketing arsenal for capturing a shopper's discretionary sales dollar.The Display Driven chart lists, in descending order, the 40 product categories in which marketers are the most aggressive users of display for generating sales. Again, leisure-time foods, which have a high degree of impulse in shopping patterns, dominate the list:Carbonated Beverages (52 percent of sales are produced via displays);Chips & Snacks (30.2 percent);Candy/Mints (26 percent);Beer & Ale (22.9 percent);Ice Cream Cones (22.5 percent);Marshmallows (22.4 percent);Crackers (22 percent);Cookies (21.4 percent).However, another dynamic also comes into play: seasonality. The list is led by Suntan Products, a category in which more than 53 percent of annual sales are generated via display. Obviously, suntan lotion must be given prominent positioning during a peak season, the summer months. Other heavily displayed categories in this list also feature a high degree of seasonality. These include:Stuffing (25 percent of sales produced via displays);Pest Control (24.7 percent);Instant Tea (21.5 percent);Cold/Allergy/Sinus Liquids (21.3 percent).Top PerformersAfter reviewing this first wave of data, P-O-P Times editors selected a number of categories for more rigorous analysis. The goal was to examine the P-O-P activity of specific marketers within categories that had high levels of display activity. (Detailed, vendor-level data on some top categories, such as Carbonated Beverages or Beer & Ale, was not available for reasons of client confidentiality.)Ultimately, eight categories were analyzed: Chips & Snacks; Cold/Allergy/Sinus Liquids & Powders; Cold & Sinus Tablets and Cough Drops; Cookies ;Drink Mixes; Pest Control; Ready-to-Drink Tea; and Suntan products. A new computer search was begun, covering a 52-week period ending Aug. 14, 1994. Depending on the category, data on three to six companies, plus an entry covering all private label product, was generated. This data included: (1) the percent of dollars generated through display only; (2) the percent of dollars generated through feature ad & display; and (3) the total dollar sales for the year.Again, the data in items No. 1 and No. 2 were combined to produce the new index, percent of sales generated via displays. This figure was then multiplied against the total dollar sales figure to produce the "total dollar sales from display" data seen on the charts in this report.For example, the total sales of the Chips & Snacks category was $5.45 billion. IRI reports that 22.7 percent of sales in the category are generated by display only, and another 7.4 percent are generated by feature ads & display. Thus, display-related activity category-wide is 30.1 percent. Multiplying that percentage against the total sales figure produced "Total Sales From Display: $1,640,450,000."Plano, Texas-based Frito-Lay Inc., the leader in the Chips & Snacks category, generated $2.566 billion in total sales. According to IRI, 36 percent of Frito-Lay sales in this category are generated through display meaning that $923,760,000 of those sales can be attributed to display activity. These dollar figures are shown on the charts presented throughout this report.Display LeadershipOne trend observed in the eight vendor activity charts was clear. With one exception, the company that was the category's overall sales leader was also the most active user of displays. In fact, in six out of eight cases, the market leader derived an even greater share of sales through display:Frito-Lay had $2.566 billion of the Chips & Snacks category's $5.45 billion total sales, a 47 percent share. But the company, which markets the Cheetos, Fritos and Doritos brands, accounted for $923.7 million of the category's $1.64 billion display-driven sales, a 56 percent share.Cincinnati-based Procter & Gamble Co. generated $66 million of the Cold/Allergy/Sinus Liquids & Powders category's $187 million total sales, a 35 percent share. But the company, which markets such well-known products as NyQuil and Formula 44, had more than $17 million of the category's $39.7 million display-driven sales, a 44 percent share.With names like Halls Metholyptus and Sinutab in its brand portfolio, Warner-Lambert Co., Morris Plains, N.J., logged $110.6 million of the Cold & Sinus Tablet/Cough Drops category's $783.6 million total sales, a 14 percent share. The company accounted for more than $19.2 million of the category's $105.8 million sales from display, an 18 percent share.Nabisco Foods Group, Parsippany, N.J., accounts for $1.4 billion of the Cookie category's $3.6 billion total sales, a 40 percent share. But the maker of Oreos and Chips Ahoy! generated more than $386.7 million of the category's $793.8 million sales from display, a 49 percent share.Spurred by such household names as Kool-Aid and Tang, Kraft General Foods of Northfield, Ill., had $557 million of the Drink Mix category's $678 million total sales, an 82 percent share. But the company produced more than $128.7 million of the category's $139.7 million display-driven sales, a 92 percent share.Racine, Wis.-based S.C. Johnson & Son Inc. accounted for $162.3 million of the Pest Control product category's $321.9 million total sales, a 51 percent share. But the company, which markets Raid and OFF!, generated more than $54 million of the category's $82 million display-driven sales, a 66 percent share.One exception to the trend occurred in the Ready-to-Drink Tea category, where Snapple Beverage Corp. and Thomas J. Lipton Inc. are in a close race. Valley Stream, N.Y.-based Snapple accounted for $99 million of the category's $307 million total sales, a 32 percent share. Snapple generated more than $14 million of the category's $50 million display-driven sales, a 28 percent share. Englewood Cliffs, N.J.-based Lipton, which had 30 percent of the Ready-to-Drink Tea category's total sales with $92.6 million, leapfrogged ahead of Snapple in the display-driven sales category, posting $17.4 million in sales from display, a 34 percent share.Ready-to-drink beverages is an extremely competitive category right now, with marketers scrambling to create new display opportunities such as checkout stand coolers and countertop refrigerated units. Thus, it is no surprise to find two market leaders running neck and neck in this category.Analysis of the data does pose a "chicken-and-egg" question: Does heavy use of P-O-P build market leadership, or does being the big dog in a category just make it easier to get display placement? The answer may be undeterminable. But this much is certain: marketing leadership and aggressive use of P-O-P clearly go hand-in-hand.