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Full of beans

Most Premier retailers will be aware f the coffee to go opportunity, but, combine it with an effective loyalty mechanic and the profits can be positively perky.

Once known as a nation of tea drinkers, recent years have witnessed a dramatic shift in UK shoppers’ out of home hot drinks of choice, with caff eine cravers increasingly swapping bags for beans.

In fact, according to Kantar data from 2021, coff ee now accounts for more than half of total hot drinks category spend, overtaking tea and hot chocolate combined.

Out of home coff ee sales in the UK were also up 76% in the third quarter of 2021, with much of that growth having been delivered by retail outlet vending machines as shoppers reclaimed the high-streets following earlier lockdowns.

It’s a trend that’s all to familiar to Sheffi eld-based Premier retailer Mandeep Singh, for whom coff ee, and to be specifi c, specialty coff ee, such as ‘Latte Macchiatos’ and ‘Flat Whites’, have become a major footfall driver.

The quality cups created by the store’s unbranded barista-style coff ee machine is certainly a draw, but, as Mandeep explains,

{Coffee sales have rocketed. In the last eight weeks alone, they’ve quadrupled from where they were before, and this is still early days, the potential here is massive. }

it was the launch of a new coffee loyalty scheme towards the end of 2021, that has really helped to perk up sales.

“Loyalty is something that as independent retailers we really need to be taking more seriously now,” Mandeep says. “It’s the next key battleground. You can have the flashy store and all the latest products, but without a loyalty scheme of some sort, you’re never going to hit your true potential.” “We’ve entered the loyalty fray with one of our biggest footfall drivers: coffee to go and judging by the figures we’re already generating, it’s clear to see that the scope is huge.” “Unlike other schemes that force customers to repeatedly visit your store in order to get their tenth coffee for free, or such like, we simply offer our shoppers money off their coffee each time they use

{We still make 40% POR on each £1,00 cup so we’re not losing anything and certainly not when you consider how much footfall has climbed as a result. }

their ‘Singh’s Local Discount’ card. “In my opinion this type of loyalty scheme is far more eff ective, as shoppers receive instant gratifi cation. They get rewarded for their loyalty with a third off the price straight away, rather than feeling forced into visiting again in order to receive a reward later on down the line.

All of the store’s hot drinks to go, including coff ee, are priced at £1.49, however, shoppers with a ‘Singh’s Local Discount’ card can grab a cup for just £1. The response, Mandeep says, “has been phenomenal,” with coff ee sales having “quadrupled” in the eight weeks since launch.

“We promote the card via signage throughout the store but it’s at the till point where we really go to town on promotion, as in my opinion, this kind of mechanic is best explained as part of a conversation between staff and customers.

“Each time a customer comes to the till with a coff ee they plan to buy, our team members say: Would you like one of our loyalty cards? Take one and every time you come in and scan it, you’ll get your coff ee for just £1.

“Coff ee sales have rocketed. In the last eight weeks alone, they’ve quadrupled from where they were before, and this is still early days, the potential here is massive. “This particular loyalty mechanic makes the customer feel valued and happy that they have been rewarded with an instant saving. “We only launched it eight weeks ago and we’ve already got 400 shoppers actively using their cards with more and more taking up the cards every day. There’s no forms to fi ll in or anything to sign, they just scan, save and go. “The cards have defi nitely changed shoppers’ mindsets. Shoppers with the cards are far more inclined to visit us for a coff ee now, as well as getting a basket of goods, as opposed to paying £3.50 at the local coff ee shop. The promotional “pull” is also having an impact across the wider food to go zone, with Mandeep also witnessing “a signifi cant uptick across associated snacks and meals to go.” “I’d advise other retailers to defi nitely get on board with the loyalty concept,” he adds. “I honestly can’t think of a single reason not too, especially when you consider

HOW IT WORKS

All coffee to go customers are offered a ‘Singh’s Local Discount Card’ at the till point.

Cards feature perforations enabling them to be easily attached to key-rings as well as placed in wallets.

All loyalty card users receive an instant saving of 49p on their coffee.

Loyalty card users pay just £1 for a cup each time they use the card, as opposed to the regular price of £1.49.

Please speak with your RDM for further details.

that I’m still making 40% POR on a £1 coff ee. You can’t think of it as losing 49p, you’re not losing anything, you are gaining massively, and the repeat business says it all. You can’t argue with quadruple sales growth.” With stats like that, the proof, as they say, is certainly in the pudding, or in the Latte Macchiato.