The strong growth of the Core Sets program, NCG’s comprehensive category management solution, reflects the effectiveness of centralizing category strategy — including assortment, merchandising, pricing and promotions — for common consumer needs across all member co-ops.
Since launching in April 2021, the categories that have been reviewed and reset as part of the Core Sets program have collectively increased in dollar sales by 5% and in unit sales by 1%. Focusing in on only the Core Sets assortment within those categories, those products grew 13% in dollar sales and 9% in unit sales, while sales generated by promotions in these categories grew by 35%.
That performance comes despite a member adoption rate for Core Sets products of just 61%. The C set assortment, which is our “all store” assortment encompassing the best of the best, has slightly higher adoption rates of 70%. To illustrate how much unrealized potential Core Sets holds: If all participating members opted into all C set assortment products, we could generate an additional $47 million in sales for the system annually. That would give member co-ops more leverage with brands and distributors, which would put more investments into NCG promotions and Core Sets Cost Supports — investments that wouldn’t be going to co-ops’ competitors — and would create more value for co-op shoppers at a time when value is needed as much as ever.
To wit: Vendor trade budget investments — the amount of money a brand allocates to promoting their products— in NCG programs are up a staggering 75% in the 19 categories reviewed in 2022. These investments have been put toward deeper and more frequent promotions, Core Sets Cost Supports, free-fill and reset fees — all of which fuel the strong sales growth at participating co-ops’ stores. And, importantly, these trade dollars are not available to drive sales at your competitors.
Our category managers review exhaustive data and insights to understand how customers engage the products within the categories and identify all the needs consumers have. From there, category managers set strategies for each of the four “Ps” — product, placement, pricing and promotions — to meet as many of those consumer needs present in the category as possible. They then engage with brands to understand how their products can support the strategies and leverage the might of all participating co-op volume to secure deep investments in promotional and pricing plans to drive category sales.
The program is chock-full of benefits for participating members including:
- access to Core Sets Costs Supports (vendors investing in members’ margins to have more competitive retail prices)
- vendor-funded reset support
- free fill at a value 2% greater than each co-op’s everyday cost-plus rate on products new to each location
- flexibility for co-ops to adapt the strategy set by NCG’s category managers to their specific shoppers
- and strong category sales growth.
If more locations adopt more of the recommended Core Sets products that address common consumer needs across co-ops, we’ll increase our leverage with brand partners and command a greater and greater share of their trade budgets, fueling sales at member co-ops and not your competitors.
Is your co-op interested in participating in Core Sets? Learn more about the benefits, eligibility requirements and how to enroll on the Core Sets page.
