Targeting the snack offer in your pub can be an easy route to greater profits. Simon Creasey reports
At first glance, WH Smith may seem an unlikely role model for the pub trade, but the high-street operator's upselling tactics provide a great example for all sales-driven industry sectors.
The retailer's concept is breath-takingly simple and astonishingly effective. A customer pops into their local branch of the store to buy a magazine and at the till the cashier offers them the opportunity to purchase a chocolate bar for half its normal retail price.
The majority of customers go into the shop solely focused on a magazine purchase yet when faced with the opportunity to increase their spend, a surprisingly large number take advantage of the offer.
What might happen if licensees were to adopt the same sales technique, tweak it slightly, and get staff to ask the question: "Would you like a snack with your drinks?" Industry experts believe that those few words could help to generate hundreds of pounds of additional revenue per annum and turn an ailing enterprise into a thriving business. This is just one example of how the pub trade can drive the growth of snack sales.
However, far too many licensees neglect this profit stream, with bar snacks frequently pushed away out of sight (if indeed they manage to keep on top of stock levels in the first place). It's a lost opportunity that is causing them to miss out on hundreds of pounds in revenue, according to Nick Stuart, commercial manager of United Biscuits UK, who says: "A lot of licensees haven't made the most of the opportunity offered by selling snacks over the years — if people can't see, they don't ask."
Stuart argues that a little bit of upselling — a polite enquiry as to whether or not the punter desires a snack, delivered with a smile — could make a valuable difference.
As the aforementioned example shows, making money selling snacks isn't very difficult. At a time when the after-effects of the smoking ban and a general downturn in sales are severely hitting some pubs' takings, there has never been a better time to review existing snacking offers and look at new ways to drive sales growth.
According to experts, the golden rule to bear in mind when it comes to selling snacks is to consider the pub's demographic. You have to stock the right range for customers that frequent the establishment. If it's a swirly-carpeted country pub frequented by OAPs then cheddar cheese and burgundy flavoured crisps or sea salt and peppercorn, are not going to go down too well with the punters — traditional favourites, such as cheese and onion and salt and vinegar, would be a safer bet.
If the pub is child-friendly then it makes sense to sell a range of snacks that would be popular with kids. "Children are not going to be keen on red-hot chilli nuts, but Hula Hoops, Skips and Nik Naks will be much more relevant," explains Stuart.
With the smoking ban seeing more and more women frequenting pubs, it's also important to stock a range that appeals to them, with healthier, lighter options such as baked rather than roasted nuts, being a good alternative.
In addition to stocking well-targeted snacks, you should also ensure that you keep the range relatively small — perhaps two types of nuts (salted and dry roasted are the most popular) and then maybe three to four different flavours of crisps.
The other message coming through loud and clear from the experts is "don't just fall into the trap of thinking that snacks are bagged nuts and crisps". Modern consumers are willing to try all manner of different things — this extends from new twists on old favourites, such as wasabi peanuts or Japanese rice crackers, which are increasingly popular, through to simple, hot sharing platters.
Licensees are more willing than ever to experiment with the range of snacks on offer (see hot-food feature on page 40) and this diversification into different food groups is a trend that is expected to gather pace.
A further trend that's anticipated to grow is provenance, with consumers showing more of an interest in where the food that they eat comes from and how it has been prepared. To address this demand, Faye Reeves, national account marketing manager at 3663, says that her firm is working on offering a local product range of snacks. "We've already got half of the UK covered. For example, in Herefordshire, we might offer Tyrrells crisps, which are made locally." Reeves says that the firm intends to eventually roll out a regional offer nationwide.
Coupled with a demand for provenance is a desire for more premium snacking solutions (see box below). "We are seeing greater movement towards a more stylish type of offer as pubs are increasingly frequented by more upmarket profile customers," explains Ashley Cairns from CGA Strategy.
Cairns says that pubs are offering increasing numbers of premium bag snacks and expects more upmarket crisp lines such as Tyrrells to make more of an impact in the future, following the firm's purchase earlier this year by private equity firm Langholm Capital for £40m.
But regardless of whether or not you sell pork scratchings or upmarket snacks, the crucial element of making the most of the opportunity comes back to asking the question in the first place.
Walkers' Childs says that he has witnessed first hand how important a tool upselling can be for the pub trade. "A year or so ago one of our key customers got his staff to upsell during a shift and they sold twice as many crisps as they normally did by just having them on display."
Getting behind a snack offer can really make a difference to the increased costs and falling revenues that pubs are experiencing, and the key message from the manufacturers of snacks is that all pubs can make money from selling them if they go about it in the right manner.
The first bite is with the eye
Another thing to consider is whether or not the pub's clientele changes throughout the day.
For instance, do you get more office-worker customers in at lunchtime, and then in the evening is it full of local lads? What about on a weekend — do you get a football crowd in on Saturday, but on Sunday it's more family-orientated? If this is the case then it's worth considering rotating the snacks throughout the day — or the week — putting some in the store cupboard and others on display when relevant.
Prominently displaying snacks that are on sale is also an important and oft-neglected factor. Space is always at a premium and a lot of snacks come in bulky boxes, which is why, all too often, they get pushed underneath the bar, out of the way and out of sight.
This reduces the chances of impulse purchases — only the most dedicated consumer will ask the question "do you sell snacks?" — but it can be got around by pinning a selection of snacks on the back bar, or by putting them into baskets and placing them more prominently.
Suppliers are only too happy to provide marketing tips to licensees to ensure that their snacks are promoted in the most effective manner possible, according to Phil Childs, customer business manager for the licensed channel at Walkers Snacks. "We have a wealth of knowledge around the right range of snacks to stock and we can show them the right way to display them to help improve sales of crisps in pubs."
In addition to prominent displays of snacks, Childs advises that licensees implement simple but effective measures to ensure customers are aware of the range available through advertising on beer mats or posters.
Another opportunity for sales growth is through providing sharing solutions. According to research by CGA Strategy, two thirds of all snacks in pubs are bought to share — a statistic that has not gone unnoticed by the major snack manufacturers.
Walkers' Childs says that the firm has some "fantastic sharing lines" and that it is speaking to customers about maximising