When the economy slowed in 2008, and consumers reduced grocery spending overall and shifted toward less expensive and private-label products, premium-brand tortilla chip maker Truco began looking for ways to help Kroger grow bagged snack category sales and profits while also strengthening sales of Truco’s On The Border products. The company’s focus was on how to give Kroger shoppers a high-quality branded tortilla chip option at a competitive price while working within the constraints of available shelf space and distribution.
Truco implemented a new pallet-based in-store merchandising display and promotional program for its tortilla chips. Truco used Market6 in a three-pronged approach to drive better planning and execution on these pallet promotions:
- Before a promotion, to analyze store-level sales and recommend allocation of the right number of pallets for each store
- During a promotion, to monitor daily store-level sell-through so it could replenish stores and avoid sales voids
- After a promotion, to provide management with summary reports and benefit analysis
Truco’s pallet-based promotions have helped its grocery partner increase overall bagged snack dollar sales by 4.4% and gross margin by 2.6% in the past year.
During the same period, Truco has grown its own sales by 16.6% while also helping its grocery partner get more shoppers to purchase the category more frequently and with larger average basket sizes. Truco’s pallet promotions drive an average 3.3 times lift in dollar sales in Truco products. Additionally, Truco achieves an average 115% sell-through on pallet programs, minimizing residual inventory and improving exit strategies.