Cashing In on Grocery and Dairy

New regulations affect product mix at Fabulous Freddy’s
groceries

Patsy Varpula, pricebook manager for eight-store chain Fabulous Freddy’s, Las Vegas, knows that the economy and the weather can upset a manager’s best-laid plans.

But another, rather unlikely factor recently reshaped the chain’s approach to the general merchandise category, as more stringent Supplemental Nutrition Assistance Program (SNAP) regulations forced Varpula to reduce her grocery and dairy product mix. She tells Convenience Store Products how it affected sales, as well as her forecast for the category in the year to come.

Q: What happened with the new SNAP regulations?

A: In the fall of 2015, we stopped accepting [Electronic Benefits Transfer] due to the new regulations impacting our chain to remain a SNAP-eligible store.

Q: And why did that affect your mix?

A: The increase in required items was something our stores would not be able to accommodate, so we started to eliminate some of the miscellaneous items we stocked to be EBT-compliant.

Q: On the new-product spectrum, any recent new offerings that proved to be a success?

A: We carry four varieties of Cheesewich in a reach-in cooler. It’s a wonderful snack and provides a protein boost without the carbs. People demand package transparency, and it comes in a see-through, vacuum-sealed package with a six-month shelf life.

Q: What type of year do you project for grocery and dairy in 2017?

A: Milk has seen roughly a 0.25% decrease, and I project the category will continue to decline as more people look for alternatives to dairy. We carry a few SKUs of almond milk, and another product I’d like to incorporate is coconut milk because coconut water is popular.

Q: Yogurt is often hindered in c-stores for being undermerchandised. How does packaged yogurt fare in your stores?

A: Our top yogurt is Yoplait Strawberry and is actually among the top 15 SKUs in our other dairy/deli category. Yogurt is not as diverse as other categories; we participate in Core-Mark’s Cooler Program and allow the distributor to manage the space. Another reason we can’t expand yogurt is simply because we lack refrigeration space.