No. of Recommendations: 1
moving to a higher mix of consumables as a strategic goal for a long time, despite the lower margins. They have been allocating more and more square footage to it. The goal there is increasing footfall and frequency of visits: a larger fraction of the population visits, and those who visit do so more often, and (b) they buy some higher margin stuff as well some of the time. Like a loss leader, but without the loss. Within that, there will be cyclical variation as well. Sometimes the pop sells better, sometimes the bottle openers.
Ok, I don't doubt that it's probably the right strategy, but it doesn't seem to be working. If it were, you would expect more consumables sales, with their lower margins, but at least slightly increasing non-consumables because of the increased traffic.
Non-consumables were $3.6b in the first 2 quarters of 2023 ($19.1b-$15.5b) and $3.5b ($20.1b-$16.6b) in the same periods in 2024; i.e. consumables were up by $1b, but non-consumables were actually down. Or over the last 3 years, consumables up from $26.3b to $31.3, but non-consumables actually dropped from $8.1b to $7.3b.
Thanks for the pop, and no, I don't need another bottle-opener?
