A friend of my parents used to tell a cautionary tale about his great-great (or something) grandfather, B.A. Branagan. In 1883, Branagan and a partner opened a food store in downtown Cincinnati, the Great Western Tea Company.
The store was a success, but they had some difficult times. The store’s horse was killed and its delivery wagon destroyed at a train crossing (Branagan, who was driving the wagon, was thrown clear). The Ohio River flooded, destroying all of their inventory.
As often happens, the two partners had a disagreement about how the store should be run. Branagan sold his share back to his partner at a profit and went on to other things. His partner continued to run the store. His name was Barney Kroger.
That story came to mind recently when I read an article about grocery stores written by Michael Moss of the New York Times. As you may know, the grocery business is exceedingly tough, operating on a profit margin often reported to be as little as 1 percent. The stores have to do whatever they can to get your interest, attract your attention, tempt you to buy something else.
According to the article, most stores put the items that tend to be most popular at eye level, and in the middle of the aisles. That’s where we spend the most time, that’s where our eyes linger. If we see something we like there — and especially if that something happens to be sweet — that something is more likely to find its way into our cart.
But that is not the only place in the store that is a strong driver of sales. Perhaps you have noticed the prominence of displays at the ends of each aisle. Those displays draw a lot of our dollars, particularly for soft drinks. One study by the Coca-Cola Retailing Research Council indicates that the soft-drink companies make 45 percent of their grocery-store sales at those aisle-end displays.
And if you have noticed that a number of items keep popping up at different places within the same stores, such as at the aisle-end displays and in their regular locations on the shelves, there is a reason for that, too. The theory is that if we see the same product several times, we will think about it more and will be more inclined to buy it.
Research has even gone into the path we take through a store. Apparently, we tend to walk counterclockwise through a grocery store (though I know I habitually head in whichever direction has the produce and proceed in that same direction throughout the store). Additional research shows, however, that if there are large arrows pointing in a different direction, that is the way we will go nine times out of 10.
We also usually walk down the aisles from the rear of the store to the front, and we tend to buy items mostly on the shelves to our left. So stores often place the most tempting items on the shelves on the left as you walk from the back of the store.
One chain in El Paso, Lowe’s Pay and Serve, has been experimenting with the cart itself. In an effort to get people to eat more healthy foods, they put placards in the carts showing how much produce is bought by the average customer — five items per visit — and which fruits and vegetables were the biggest sellers (bananas, limes, and avocados — remember, it’s El Paso).
Knowing what is considered to be normal and common, customers increased their purchases of produce by 10 percent, and participants in a government nutrition program increased theirs by 91 percent.
Even so, the customers wound up spending the same amount of money at the store. The food they are eating is healthier, but the stores are not increasing their sales.
But don’t worry. The produce department at most stores, along with the meat department, yield the highest amount of profit for the retailers. It’s win-win; everybody benefits.
Contact Daniel Neman at email@example.com or 419-724-6155.