Small but powerful

Price-marked packs are still crucial to convenience as inflationary pressures persist across the economy.

The current economic uncertainty means consumers are savvier than ever before, which places price-marked packs (PMPs) in an unrivalled position within convenience.

Sold in smaller formats, they can have a positive effect on customer loyalty, offering both size and value for money. “Having surveyed both retailers and consumers, it was clear how important the £1 price-point is to both groups. Independent retailers can really come into their own, where they can offer great value for money,” Matt Smith, Marketing Director for Tayto Group, explains.

“Instead of raising the headline price of our £1 PMPs, we have given retailers and customers what they want – and kept with the £1 price point – to demonstrate our commitment to delivering great consumer value whilst offering strong retailer margins. And 64% of consumers are willing to switch brands for a lower price, so value for money is key,” he adds.

Clearly a balance of making margins for retailers work and keeping sales robust is a priority for brands. Bobby’s Foods notes: “In the dynamic landscape of retail, where every purchase is scrutinised, PMPs have emerged as a beacon of value, offering a straightforward and impactful means for retailers to resonate with budget-conscious consumers.

“The PMP opportunity for Scottish local retailers is substantial. It serves as a direct communication tool with consumers, conveying transparent pricing that aligns with their expectations.”

Snacks and confectionery

PMPs tend to shine particularly bright in the snacks, sweets and cakes categories, as these thrive on impulse purchases. “This commitment to £1 has been instrumental in Golden Wonder’s success with Transform-A-Snack £1 PMPs growing at 15.1% – and the recent launch of Pickled Bikers boosting the Fun Snacks £1 PMP range to deliver 24.9% growth,” Smith explains.

Kathryn Hague, Head of Marketing at Hancocks, adds: “PMPs work best in impulsive categories, including snacks and confectionery. This is because they’re sold in smaller formats and therefore they can have attractive prices.

“Sweets, chocolate, crisps, soft drinks and snacks can all benefit from having pricing clearly marked on them for customers.”

Soft drinks win

“More than ever, price-marked packs are a key way of helping shoppers to navigate the soft drink aisle in convenience where 35% of soft drinks are bought on impulse and shoppers are accustomed to seeing price-marked packs in stores,” Red Bull explains.

According to Lumina Intelligence, one in three shoppers are more likely to buy soft drinks if they are in PMPs, while 75% of convenience shoppers are more inclined to buy PMPs. “In this instance, price-marked packs can be a purchase driver, helping to deliver a perception of value to the shopper, therefore retailers can support customers and make their decisions in store easier by supplying price-marked pack options,” Red Bull adds.

Meanwhile, Britvic is also looking at targeted measures to support retailers, including with PMPs. Parker says: “Across our range the profit on return percentage (POR %) will be maintained so that as the price-marked packs increase in price, the cash margin grows.

“On a selection of our core price-marked pack lines including our 500ml formats of Pepsi Max and Lipton Ice Tea, as well as Fruit Shoot, we will look to increase the price-marked pack in line with inflationary pressures as well as the POR %, to create more shared margin and an even stronger translation to cash margin.”

Milk shakes is also a popular category, continuing to grow in demand, supported by the trend for premiumisation in flavoured milks. Katie Chadd, Business Unit Controller at FrieslandCampina, notes: “Chocomel, introduced an inaugural price marked pack value offer for its 250ml Chocomel cans (£1.69) last year.

“Additionally, Yazoo offers permanent PMP variants of all core flavours as well as across its limited-edition flavours, meaning the range can be tailored to whatever best suits the store.” The company has also made its new Yazoo Thick ‘N’ Creamy launch available nationwide as a £1.49 PMP, representing the first permanent NPD from the brand since 2016.