---
title: "Declining Terminal Sales, Wasted Expenses: FMCG Manufacturers Are Being Dragged Down by 'Store Efficiency'"
description: "Store efficiency for FMCG manufacturers refers to the sales efficiency and operational effectiveness at terminal stores, serving as a key indicator of market performance. Those who effectively improve store efficiency gain a competitive advantage. This article discusses three key metrics for improving store efficiency: store efficiency = area efficiency + personnel efficiency + cost efficiency. It provides methods for improving area efficiency, such as understanding store capacity and share, adjusting product assortment, optimizing displays, and implementing promotions."
author: "高级研究员 海游"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2025-09-07"
categories: "Distribution & Channels"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/eU1X_XFe1m8JGlhEx_5ITg"
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citation: "高级研究员 海游. “Declining Terminal Sales, Wasted Expenses: FMCG Manufacturers Are Being Dragged Down by 'Store Efficiency'.” New Distribution, 2025-09-07. https://xinjignxiao.com/en/articles/declining-terminal-sales-wasted-expenses-fmcg-manufacturers-are-being-dr-d59ca808/"
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---

# Declining Terminal Sales, Wasted Expenses: FMCG Manufacturers Are Being Dragged Down by 'Store Efficiency'

> Store efficiency for FMCG manufacturers refers to the sales efficiency and operational effectiveness at terminal stores, serving as a key indicator of market performance. Those who effectively improve store efficiency gain a competitive advantage. This article discusses three key metrics for improving store efficiency: store efficiency = area efficiency + personnel efficiency + cost efficiency. It provides methods for improving area efficiency, such as understanding store capacity and share, adjusting product assortment, optimizing displays, and implementing promotions.

Store efficiency for FMCG manufacturers refers to the sales efficiency and operational effectiveness at terminal stores, serving as a key indicator of market performance. Therefore, whoever can effectively improve store efficiency will gain an advantage in market competition.
Today, we discuss three key metrics for improving store efficiency: store efficiency = area efficiency + personnel efficiency + cost efficiency.
Methods to Improve Area Efficiency
For FMCG manufacturers, area efficiency refers to the sales or benefits generated by each shelf group, each end cap, each floor display, etc.; it is an important indicator measuring the utilization efficiency of in-store display positions. Area efficiency is the first metric of store efficiency. How to improve area efficiency?
1. First, consider the capacity and share of the outlet.
For example, if you are a instant noodle manufacturer and choose a supermarket to improve area efficiency, first understand the total monthly sales of all instant noodle brands in that supermarket, and what is your brand's share?
This is capacity and share, the basic concept for improving area efficiency. If your share in this supermarket is low, there is significant room for improvement, and vice versa. This determines the difficulty and priority of improving area efficiency across all outlets in the market.
2. Second, product assortment adjustment.
'Selling the right products' is key to improving area efficiency. Offline shelves are limited, and each shelf layer's selling capability varies greatly. We need to place the best-selling products on the highest-selling shelves.
What are the best-selling products? The brand's main products. What are the highest-selling shelves? The 3rd or 4th layer from the bottom, which is at the optimal eye level for heights of 1.6-1.8 meters. Then match with main push products and secondary main products.
It is worth noting: in the era of growth, more SKUs meant more sales opportunities, so we displayed more products and focused on addition. In today's era of contraction, this approach no longer works. We must focus limited resources and energy on making the TOP 10 SKUs achieve optimal sales. We should streamline products and focus on subtraction.
3. Third, display adjustment.
The purpose of display is not to make products look better, but to make them sell better. I have summarized 13 display principles to share:
1. First-in, first-out principle; 2. Display position optimization; 3. Centralized display; 4. Vertical display; 5. Main sales shelf; 6. Main push shelf; 7. Shelf and floor display efficiency; 8. Main SKU management; 9. Matching advertising and products; 10. Competitive display; 11. Guided display; 12. Full-case A-shelf display (price tags); 13. Impulse display (to increase average transaction value).
4. Fourth, promotion adjustment.
For consumer promotions, we are accustomed to gift-with-purchase and discount promotions, but these are far from sufficient. Here are 10 promotion methods to share:
1. Discount promotion; 2. Gift promotion; 3. Discount card promotion; 4. Points promotion; 5. Lottery promotion; 6. Membership promotion; 7. Off-site promotion; 8. New product promotion; 9. Festival promotion; 10. Cross-industry promotion.
You can choose based on different outlets, festivals, and consumer groups. The purpose of promotions is to increase consumer purchase conversion rates. Adjusting promotion methods from time to time can activate new and existing customers.
5. Fifth, vividness adjustment.
This is not just about material-related elements, but more about building marketing scenarios: communication scenarios, consumer scenarios, transaction scenarios. The more scenarios, the more sales. Scenario layout is the future of area efficiency improvement.
Methods to Improve Personnel Efficiency
Personnel efficiency here refers to the in-store sales assistant system.
We know: in-store sales = foot traffic × conversion rate × average transaction value. What value do sales assistants bring?
1. First, foot traffic.
Outlet foot traffic is divided into three levels. The first level is the traffic passing by the store. Some enter, some don't; the entry rate is less than 100%. How do we intercept those who don't enter?
The second level is the traffic that enters the store. If you sell instant noodles, how many of the entering customers go to the instant noodle shelf area? The area flow rate is clearly less than 100%. How do we intercept those who don't go to the instant noodle area?
The third level is the traffic that reaches the instant noodle area. There are multiple brands of instant noodles, and the traffic that reaches your brand is clearly less than 100%. How do we intercept those who don't reach your brand? How to focus the funnel-shaped traffic on your brand is the first key to improving sales assistant efficiency.
2. Second, conversion rate.
How do we convert the three waves of traffic mentioned above? This involves the logic of 'people, goods, and place.' How do off-site activities improve the conversion rate of the first traffic wave? How do in-store activities improve the conversion rate of the second traffic wave? How do in-store shelf and floor display promotions improve the conversion rate of the third traffic wave?
The three have different 'places,' different 'people,' and different 'goods,' so the logic and methods for improving personnel efficiency also differ. For example, for the second traffic wave, my suggestion is for sales assistants to carry promotional items, use supermarket shopping carts with main products and main push products, and conduct in-store 'sweeping' during low-traffic periods, going to fresh produce, grain and oil areas to influence consumers who did not plan to purchase your product.
Key reminder: Sales assistants should shift from 'passive interception' to 'active interception.' We achieve this through three functions of sales assistants:
Product recommendation function (in-store/out-store sweeping: competitors with high investment are almost always squeezing at the logic level of 'people looking for goods'; head-on collision is not advisable. We should compete at the level of 'goods looking for people'), tasting experience function (on-site sampling), and product promotion function (promotional selling). Combine the three.
As long as sales assistant efficiency is high enough (interception conversion rate greater than 60%), you can seize in-store share, competitors' share will inevitably decline, and their cost efficiency cannot sustain expenses, leading to a bleak outcome.
3. Third, average transaction value.
There are only two ways to increase average transaction value: one is 'selling more expensive,' for example, if a consumer plans to buy your best-selling product, recommend a premium product based on value and selling points; the other is 'selling more,' for example, if a consumer plans to buy one pack of tissues, recommend buying a month's or quarter's supply based on promotions and needs. Improving personnel efficiency is more about perfecting the promotion system and training basic sales scripts.
Methods to Improve Cost Efficiency
Cost efficiency is the benefit or value generated per unit of cost, i.e., the formula: Cost efficiency = Operating revenue ÷ Operating expenses. This indicator reflects the operating revenue generated per 1 yuan of cost invested, used to evaluate cost control and resource utilization efficiency. For example, the higher the cost efficiency, the stronger the ability to convert cost investment into revenue.
In reality, many times: outlets have been rectified, expenses have been increased, how to manage cost efficiency? According to the formula, to improve cost efficiency, either evaluate reducing cost investment or find ways to increase in-store sales.
First, when is it necessary to reduce cost investment? Often, frontline teams know the relationship between cost and output, but they don't understand that cost and output are not a simple linear relationship.
For example, in a supermarket, investing in 1 floor display increases sales by 1,000 yuan, 2 floor displays increase sales by 1,500 yuan, and 3 floor displays increase sales by 1,800 yuan. Although overall sales are increasing, cost efficiency is also declining sharply. We need to find the critical point of maximum value; below that point, we should reduce investment.
Now, how to increase in-store sales? That is, accelerate product sell-through, and the underlying logic of sell-through is consumer strategy matching.
The core of consumer strategy is simply three points: customer acquisition, repurchase, and average transaction value. In plain language: guide consumers to buy; drive consumers to buy again and repeatedly out of habit; find ways to increase the quantity or amount of consumer purchases.
1. Customer acquisition to increase sales
There are four core points for customer acquisition: acquisition, retention, activation, and conversion. We will explain how to do customer acquisition from three perspectives: product, market, and operations.
Product side: As the name implies, it is to achieve customer acquisition goals based on product differentiation attributes or product development methods. Common methods include: 1. Tasting experience; 2. Word-of-mouth; 3. One product, one code.
Market side: Refers to the marketing or sales department achieving acquisition targets through advertising, alliances, market activities, etc. Common methods include: 1. Advertising; 2. Brand alliances; 3. Offline activities.
Operations side: Refers to the operations department achieving targets through common methods like promotion and event planning. Common methods include: 1. Content seeding; 2. KOL, KOC fission; 3. Algorithmic recommendations.
2. Repurchase to increase sales
How to do repurchase well? Pay attention to the following four aspects.
Products have repurchase attributes: Good product selling points can be: good taste, health, convenience, addictive flavor, high cost-performance, strong product name communication, good packaging experience, distinct memory points. You can be an all-rounder with multiple selling points, or a specialist with one outstanding selling point.
Increase consumer stickiness: For example, the key to one product, one code is the 'code' and the 'coupon.' The 'code' mainly serves customer acquisition, while the 'coupon' mainly drives repurchase.
After the first purchase and scan, some coupons pop up, like second bottle half price, full reduction, points, etc. As long as the product is acceptable, some consumers will buy a second or third time for the coupon, forming a consumption habit.
3. Average transaction value to increase sales
Average transaction value is the total amount a customer pays for a one-time purchase. There are generally two ways to increase it: one is to make consumers buy more; the other is to make consumers buy more expensive.
For a single product, there is a negative correlation between purchase quantity and price: the higher the price, the fewer units customers buy; the lower the price, the more units they buy. Therefore, pursuing an appropriate price (considering profit) and the highest possible sales quantity becomes the main direction for increasing average transaction value.
'Buying more' is not repeated here. For 'buying more expensive,' a reminder: every consumer has a psychological account, i.e., an expected price for each product. This price is their psychological account. To increase average transaction value, you must find ways to raise their psychological account.
For example, chocolate is just a candy, but as a gift for courtship, it can be sold at a high price. Diamond is just a stone, but as a token of marriage, it can be sold at an astronomical price. So how to design added value is one of the important methods for selling products at high prices.


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## Citation metadata

- Publisher: New Distribution
- Author: 高级研究员 海游
- Published: 2025-09-07
- Canonical: https://xinjignxiao.com/en/articles/declining-terminal-sales-wasted-expenses-fmcg-manufacturers-are-being-dr-d59ca808/
- Original source: https://mp.weixin.qq.com/s/eU1X_XFe1m8JGlhEx_5ITg

## Copyright and AI use

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