How HFSS regulations will impact store layouts

HFSS regulations to Impact Store Layouts

As part of the Child Obesity Plan (June 2018) the government is introducing the HFSS regulations to control the price-promotion and location of high fat sugar & salt products in store by the end of 2022.

The HFSS regulations will see the end to buy one get one free’ promotions and featured sections such as gondola ends and checkout points. This will cause a legal requirement to replan store layouts, and as store planning experts, we are already helping clients in the process.

The HFSS regulations are currently up for debate between industry figures because of the impact of the regulations concerning the effect on earnings and brand visibility. According to an article by the Retail Times, ‘IRI’s analysis of retail sales data shows that the potential impact of the new restrictions on products high in sugar, salt and fat is just over £3 billion in value sales, which typically would come from off-shelf promotions. Categories usually rely on promotional displays to generate anywhere between 8% and 25% volume over the course of a year.

Controlling HFSS promotions near checkouts and gondola ends

Checkouts and gondola ends are the focus of the controlled locations. These include till points or self-checkout areas and the two-metre surrounding floor space as well as the queuing space which leads to the checkout area. In addition ends of aisles or separate units next to the ends of shelf rows such as island bin displays along with store entrances will be restricted from running promotions on HFSS products.

HFSS regulations specify location of high fat sugar and salt products in stores

HFSS regulations to Impact Store Layouts

Small stores and specialist retailers are exempt from the location HFSS controls.

Not all stores will be affected however. The ban will apply to stores over 2,000 square feet, retailers with more than 50 employees or symbol group franchisees where there are more than 50 employees operating under that business name. Both small businesses with less than 50 employees, and specialist retailers that only sell one category of product (eg chocolatier) with small stores (less than 2,000 square feet) are exempt from the ban on location promotions. These HFSS regulations will require drastic changes within store and many retailers are concerned about the loss of earnings from prominent promotional locations.

HFSS promotional bans will result in lost retail earnings

While the location controls are focused on larger retailers, all stores will be affected by the regulation on promotional offers. The banned promotions include ‘buy one get one free’, multi-buy, ‘extra-free’ and free refills of sugar-sweetened drinks popular for convenience customers. Although not all promotions are banned, temporary price cuts and meal deals will still be permitted.

The HFSS band covers a wide scope of products which retailers must ensure can be relocated when replanning stores to meet the HFSS requirements. In addition to soft drinks with added sugar that are covered by the soft drinks industry levy.

HFSS regulations to Impact Store Layouts

CADS provides a retail planning resource for retailers needing to explore changes in store layouts and peripheral areas. Please get in touch if you would like to find out more about how we can help.

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