Swizzels has increased the prices of its price-marked packs (PMPs) for the first time in its history, citing increased production, packaging and transportation costs.
From the new year, the supplier’s hanging bag PMPs will be £1.15, up from £1.
Mark Walker, sales director at Swizzels, said: “We have placed huge value on our relationships with wholesalers and retailers for 95 years, so have thought long and hard about the next steps in the £1 PMP evolution. In order to protect, and in some cases increase retailers and wholesalers margins, we have taken the decision to break the £1 hanging bag PMP on sugar confectionery. The new range will have a PMP of £1.15 which will start to appear in wholesalers in the New Year.
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“We fully believe the £1.15 PMP offers value for money and will protect consumer trust in tough economic times, whilst at the same time protecting our valued wholesale partners and diligent retailers.”
Before introducing the changes, Swizzels said it had partnered with The Fed to conduct research among retailers about the importance of PMPs.
“The research proved invaluable and revealed that 74% of independent retailers view PMPs as extremely important to their business, not least because they are a tangible symbol of value to customers,” said Walker.
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“Of the retailers we surveyed, 44% said that the majority of suppliers across all categories had already moved above the £1 PMP. In fact, 75% stated that they saw slightly higher sales or no change, proving that moving above the £1 PMP is a low risk move.
“We also discovered that 60% of retailers were comfortable stocking a higher priced PMP, provided their margins were protected.”
Although more than half of consumers are reducing spending to help pay their bills, sugar confectionery sales grew 8.9% in the past 12 weeks.
“History has shown that in tough times, sweet sales tend to remain largely unaffected,” said Walker. “This is probably because consumers are looking for affordable ways to cheer themselves up. We are confident that the Swizzels brand has built up sufficient affection and goodwill over the years that sales will remain solid.”
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