Late last month, Nestle USA, Glendale, Calif., and eCandy.com Inc., Los Angeles, formed a partnership to sell candy over the Internet.
On-line, the Nestle USA Web site, located at www.NestleUSA.com, in addition to its brand sites -- Perugina.com; Wonka.com; Butterfinger.com and Wonderball.com -- will promote eCandy as the site to hit if a visitor is interested in purchasing a product. Brands that may be purchased via eCandy.com include Butterfinger, Crunch, Baby Ruth, Raisinets, Nerds, Pixy Stix, Gobstoppers, Lik-M-Aid Fun Dip, Perugina, After Eight and Quality Street.
Moreover, consumers and retailers who contact Nestle's customer-service department will be directed to the eCandy Web site to order their desired product. How might the supermarket industry be affected by such news?
SN took a poll to find out.
Most respondents agreed that there might be some sales effect from such competition, albeit minor, because of the impulse nature of confections. Plus, several on-line grocery shopping sites already exist, as Mike Ortiz, sales manager of candy, pet and store supplies at Unified Western Grocers, Los Angeles, noted.
"There will be a certain percentage of people who use those services, but traditionally a lot of our stores cater to ethnic shoppers. So, there's not a significant impact at this time," Ortiz added.
At Copps Corp., the Stevens Point, Wis., wholesaler, an unidentified source held a similar notion: "In our market, I don't know what percentage of people are on-line at home, so I'm not sure how it will affect us.
"It could hurt our business if more and more people shop on-line. Of course, that impulse is going to be taken away. There's something to be said for touching and feeling and handling the product," the source added.
Which is most often the case with candy -- 85% of all candy purchases are made on impulse. The shopper sees it, picks it up and buys it, all with very little premeditation.
"Some of the Web sites are said to take about 11% of sales, so if they want to take 11% or 15%, it's not very much," said Randy Slentz, grocery buyer/merchandiser at Save Mart Supermarkets, Modesto, Calif.
"I think it will take sales away from club stores, where people buy cases. For instance, the Little League might buy a couple cases of snack bars. Instead of going to a club store, they can go to the Internet," Slentz added.
Another retailer saw himself being affected in a similar way. "It could impact retail sales because if someone buys a 24-, 36- or 48-count of Baby Ruth bars [on-line], they won't be back in the stores buying it," said Chuck Jones, senior buyer at Scolari's Food & Drug, Sparks, Nev.
The anonymous Copps representative showed some compassion for fellow suppliers. "Seems like it might hurt those who use a smaller distributor. I would like to see what kind of price Nestle is selling those things on-line. How do they deal with credit, turnaround time and those kinds of things? Will Nestle still do promotions? Are they going to upcharge?"