Recent potato shortages will drive up the cost of core Walkers products, RN has been told.
Information seen by RN showed that supplier PepsiCo is recommending wholesalers set promotional pricing for Walkers 12-packs and 20-packs at £2.50 and £3.50 respectively. Pricing from Bestway as RN went to print was £2.15 on a 12-pack and £2.75 for a 20-pack.
Promotional support on wholesale boxes is also being removed until 2019, while there will be no deals on Stax until November. PepsiCo said the changes were a result of farmers charging more per tonne for potatoes to recoup for crop shortages caused by the recent heatwave. Availability of Walkers products should remain normal due to stock reserves.
Dee Bee Wholesale trading director Andy Morrison said: “In terms of its impact on the trade, customers will still buy crisps, so we should see some category growth.”
Ramsey Hasaballa, of Premier Speke Town Lane in Liverpool, said: “Price increases are never good, and snacks are an important product for my stores. However, crisps are an impulse product… customers will still buy them if you communicate why there is a price increase.”
Thomas Brereton, retail associate analyst at GlobalData, recommends retailers focus on other products to offset potential losses. He said: “Prices at wholesale level look set to increase ahead of the shortage itself, and the difficulty for retailers is to what extent that is passed on to the customer.
“Given the younger generation’s preference for convenience, coupled with their lack of interest in potato-based products, convenience stores should have already been adapting product mixes and lowering space dedicated to potato-based products.”
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