Retailers reap benefits of Nestlé category management

Michael Eaton

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Aldeasa’s outlet at Madrid Barajas terminal four and World Duty Free’s store in London Heathrow terminal three are among those to benefit from the supplier’s strategy

Nestlé International Travel Retail (NITR) is stepping up the pace with its category management partnerships after demonstrating to retailers that sales at outlets using category management are growing ahead of the total travel-retail market and ahead of the confectionery category. The company claimed that outlets where category management initiatives had been implemented had achieved growth of 17.7% in 2005 compared with the previous year, as opposed to growth of 10.3% for travel-retail and 13.2% for confectionery, according to figures from NITR and Swedish analyst Generation.

NITR marketing manager Iain Harrison revealed that the confectionery section at Aldeasa’s store in Madrid Barajas airport’s terminal four satellite, which is used by BA and Iberia flights, has just been completely relaid to full category management.

“Operators have seen what we are doing and want to talk,” he said. Next on the agenda is World Duty Free with London Heathrow terminal three, where again we are planning a full category treatment.”

NITR has created what it calls an “initiative matrix” and is confident that totally committed retail partners, who take on board all its recommendations, can achieve sales growth of more than 20%. It claims that its category management philosophy embraces flexibility, proven results, clear guidance, and structure.

Harrison added: “We are working more and more with category management. If retailers are nervous about making wholesale alterations initially, we will just change the bars, for example, or a sub-category like children’s lines. We provide insights on consumer needs and how they shop; and look at the range and its performance.”

Individual sub-categories can achieve even more impressive percentage gains, according to NITR. Category management of premium gifting can deliver a 27% sales uplift and children’s gifting 22%. The full matrix covers range and space management; display management and promotional initiatives and covers a number of “essential” products, said NITR.