Selecting the Products for the Hotel Pantry: Five Points to Consider
By Janine Roberts, Director of Sales and Marketing, Tradavo
The pantry is a welcome amenity that meets the needs of your guests when they are in a pinch for a light snack, quick meal or convenient headache reliever. This popular hotel retail offering has become a brand standard for many hotel brands including Marriott International's highly successful "The Market" and Hilton's well planned "Pantry Pavilion" and "Suite Shop." These pantries, though often very small, bring in a substantial source of revenue when properly supplied and managed.
But how does a manager choose what products and categories to offer in the pantry to meet the guests' needs and earn a profit that makes the offering worthwhile? It is not as difficult as one might think so long as you keep a few important points in mind when sitting down to plan your hotel pantry assortment. Whenever possible, start with your brand's recommended planograms to plan your pantry assortment. Both Hilton and Marriott brands have a well defined planogram of recommended categories that include the core pantry necessities: Sweet Snacks, Salty Snacks, Healthy Snacks, Quick Meals, Ice Cream, Frozen Dinners, and Travel Size Amenities. Within each category, they also recommend top selling products like Snickers candy bars for the Sweet Snacks group and Doritos for the Salty Snacks - best sellers in any market regardless of region or demographic.
These planograms are rarely based on personal preferences of the F&B or Retail team. They are, in most cases, carefully developed recommendation based on market research and taking several important areas into consideration including:
- national best sellers from each major manufacturer like Mars, Nestle and Frito Lay
- the quality level that best supports the brand image (premium, standard or economy)
- a desire to offer a variety of categories and products that effectively meet the majority of guest needs regardless of region or demographic.
However, if you do not have a national pantry program that offers standards and guidelines, then be sure to follow the basic concepts that all major planograms are based upon.
1) Stick With What You Know...
There is a reason why major brands are major brands. It is because everyone knows the name and the product, and a brand loyalty has been established making certain products favorites in any region for any demographic. It is important to offer the popular products that your guests seek when entering a pantry. Some hotels want to differentiate themselves by offering only regional items or only natural or organic products. And, while there are specialty products that will sell well in certain markets, national brands typically outsell specialty items 4 to 1.
Sales data clearly shows that guests - particularly families and business travelers - prefer comfort foods from well known manufacturers when traveling. They want a product that they are familiar with when making a purchase from a pantry - especially when they anticipate that the markup on the product will be considerably higher than when they purchase the same product in a grocery store. No one wants to shell out dollars on a product they are unfamiliar with only to find it wasn't what they wanted. Offering best sellers that guests are familiar with will increase sales and guest satisfaction meeting both of your retail goals.
2) Use Room Rates as Budget Indicators
Typically, the room rate of a guest's chosen hotel is indicative of their travel budget and should be considered a factor when selecting the assortment offered. For example, a guest who is willing to pay $200/night to stay at a Courtyard is most likely also willing to pay $7 for a pint of premium ice cream like Ben & Jerry's or Haagen Dazs. Whereas, a guest who sought out an economy hotel at a $49/night rate is more likely to be looking for an economy level ice cream product in the $3-4 range like Klondike or Good Humor novelties.
Studies also show that guests at any price range do NOT prefer ultra low budget or generic products as they are typically associated with low quality as well as low price. It is better to offer a standard level offering and be slightly above budget for your brand than to offer all economy products and be too low on quality. These products do not move as quickly even when the price seems right.
3) Bigger IS Better
For better or for worse, America answered the fast food question "would you like that supersized?" with a resounding YES! And it has never been more so than on the shelves of the hotel pantry. Guests across the country opt for the 20oz sodas, the King Sized chocolate bar, and the large "grab bag" chips. These products not only sell better and faster but also display better and allow for a much larger profit opportunity. Market retail analysis of over 400 Marriott Markets shows that King Size beverages, candy bars, and potato chips outsell their "Regular" size counterpart across all categories where a king size alternative is offered.
For example, the small, single serve 1oz bag of Lays Regular can be purchased from your food service company for about $.35 each (depending on your negotiated price) and can be reasonably sold in the pantry for $1.00. That's about a 200% markup and $.65 profit per bag. However, a king size or grab bag size (2.25oz) Lays Regular sells wholesale for about $.65 and can easily retail in a hotel pantry for $2.00 or more. That's about a 225% markup and $1.35 profit per bag.
4) Variety is King
Guests want to feel like they have a choice - not just in the number of products that are offered, but in the categories as well. Barring any blatantly unusual requests, a guest should be able to walk into the pantry and find a satisfying solution to whatever they are craving. That means if a guest comes in looking to satisfy a sweet tooth, they should have several choices to choose from including chocolate, cookies, and candy. If they come in desperately trying to stick to their diet, they should be able to select from a variety of healthy products like energy bars, beef jerky, Lean Cuisine meals and trail mixes.
Some hotel managers are convinced that the only products that will sell at their hotel are chocolate and chips. And. while these ARE the two best selling categories which lead some to believe they are the only categories worth selling, it is important to remember that many guests are looking for a healthy alternative or a more substantial meal - especially in a down economy! Those guests will often leave the property to find what they are looking for, and will likely end up spending their dollars somewhere else. For this reason, it is always important to keep a variety of categories available including quick meals and healthy snacks.
5) The Forgotten Category
Travel size sundries and single serve over-the-counter medicines are incredibly popular sellers. These peggable, blister pack products sold by companies like Convenience Valet (www.cvalet.com) display well and meet the needs of the guest that ran out of their favorite pain reliever or need to replace a forgotten bottle of contact solution. This allows you to satisfy the needs of your guests AND earn a healthy profit as most wholesale for well under a dollar and can sell for $2.00 or more.
Unfortunately, many managers overlook this category all together because they lack the display space or they opt for the hard-to-merchandise tear packs provided by a broadliner. When properly supplied and merchandised, amenity assortments rank in the top 5 for all pantry category offerings. With an enclosed amenity cabinet or a small, framed slatwall placed on an empty wall, a highly profitable assortment can be added to your pantry offering with little expense. It is well worth the effort and your guests will thank you for it. No matter what region your hotel is in or what core guest profile you are serving, the convenience of a well supplied onsite market or pantry is a golden opportunity to improve guest loyalty and increase Sales Per Occupied Room at your hotel. Selecting the right products to offer is the first step towards your hotel retail success.
Still not sure where to start? Send me an email, and I would be happy to provide you with the top sellers list for all pantry categories.
All recommendations contained herein are based on sales data for over 2,000 Select Service and Extended Stay hotel pantries.
Janine Roberts, Director of Sales and Marketing for Tradavo, a retail services company specializing in design, optimization and supply needs of the industry. She works to improve retail profits and the automate management of hotel lobby shops. Janine developed and implemented the Retail Services element of Tradavo to provide hotels assistance in selecting, merchandising and effectively pricing inventory. She also created the highly successful Grand Opening Program to help general managers preparing for a grand opening and to launch their retail operation. Ms. Roberts can be contacted at 303-883-2335 or email@example.com Extended Bio...
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