Forecourt Trader - 30 years at the heart of the fuel retailing community

Hot ticket

01 December, 2004
There's never been a better time for forecourts to get into home entertainment
Page 43 
If you go down to your local cinema today you’re in for a big surprise – especially if you haven’t been there for some time. That’s because cinemas are buzzing. They’ve never been so popular – each week some 3.5 million people go to see a film and that’s the highest audience number since 1954.
Some might think that’s bad news for home entertainment but it seems quite the reverse is true. People like to see a film on the big screen then savour it all over again when it comes out on video or DVD, but this time in the comfort of their own home. They may rent it but if they really enjoyed it, they’ll buy it.Video and DVD rental is an option for the forecourt operator but there are certain provisos. Location and customer base are the key to whether rental will work. Richard Whalley, operations director at Video Box Office (VBO), explains: “We have a number of successful rental installations in forecourt sites – these are typically in villages, small towns or conurbations where the forecourt also acts as the local c-store and serves the local community. Forecourts on major roads are less likely to be successful at rental because their customer base is from a much wider area.”However he says video and DVD sales are a dead cert for all forecourt sites.Entertainment is bought for two main reasons from forecourts. Firstly as an impulse purchase for the personal use of the customer, either for immediate use in the car (most often the case for CDs but increasingly for DVDs as more and more cars have players fitted to keep the kids occupied) or for use at home later. The second reason is as a gift in the same way flowers or chocolates are purchased on the way home or on the way out to friends and family.Mr Whalley says that in both cases it is the quality of the range of products on offer, and of course the price, that are the important factors.There’s no doubt that in the past price has been a barrier to entertainment sales in forecourts, however that’s all changing.Nick Lloyd, director of retail at Roadchef, explains how he’s addressed this: “About a year ago we were selling chart CDs for £16.99 which was too much. We looked at the high street and found the average selling price was £13.99 so we’ve now reduced our chart CDs to this. With our supplier Ozmo, we’ve reduced our margin so our whole range is now competitively priced to bring value to the consumer.” Mr Lloyd says his customers particularly like promotions: “DVDs sell well especially when they are on offer – ‘£7.99 each or two for £15’, for example.”Mr Lloyd says Roadchef has done well with spoken word CDs. “Obviously spoken word is big business for us. We recently ran a ‘buy one get one free’ offer on the top titles that retail for £11.99-£12.99. It did phenomenally well – sales doubled.”Richard Whalley at VBO reckons forecourts should eschew new releases for a quality budget offering. “New releases are used as loss leaders in the major supermarkets so they often end up looking significantly over-priced in forecourts. While business can be done on new releases, forecourt operators have to buy into discounts and low margins at this end of the market.“It’s the quality budget end of the market that presents a much greater opportunity. We are currently selling in product such as The Last Samurai, Matrix Revolutions and the first two Harry Potter movies on DVD at a retail price of £9.99. We also have all the Bond movies on DVD at £5.99 each plus a range of CDs including artists such as Bon Jovi, Will Young, Justin Timberlake and Kylie Minogue at between £5.99 and £9.99.“We present these in a range of merchandising options including counter stands and spinners which enable the forecourt operator to give entertainment product good visibility in the minimum amount of space.“Our advice to any forecourt operator thinking about entering the entertainment market is to go for quality product – recent titles with well-known stars and artists – and to position it as best you can for impulse sales.”



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