John Cotter
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Is it a lottery for convenience stores?

Is it a lottery for convenience stores?

My client operates a convenience store in a rural area.

He is wondering whether installing a lottery machine could cause a loss of more profitable lines due to frustrated customers, queuing to pay for a bottle of wine losing their patience.

Also any idea of the expected commission revenue and increased footfall potential.

John

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28th Sep 2011 10:01

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A lottery point will bring customers in, particularly in a rural area.  Hopefully while buying their ticket they will buy other things too.

No idea how much the commission is.

 

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By Old Greying Accountant
28th Sep 2011 10:11

I think ...

... it is 5%, and they take their money weekly, less any prizes paid out.

Generally people in rural areas are less impatient and don't mind a queue and a chat, but that is for your client to guage, as is if there is demand for it, i.e. has he kept a note of people asking him why/when he will do the lottery.

In his favour, people will wait a few minutes rather than a long drive to the next store?

Most would just have it as an extra item on their shopping - do you foresee queues out the door of people popping in just for the lottery? 

The counter question is, would it draw people in for more profitable items as they don't have to schlep 10 miles up the road for their lottery ticket now?

EDIT: I must have been writing at the same time as Owain which is why we overlap a bit.

Just to make clear, your client will bank the money, the lottery will take what is due them by DD each week, i.e. gross receipts, less prizes, less commission.

 

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petersaxton
28th Sep 2011 10:17

Is it a lottery

Thank you for your thoughts and advice.

I agree with everything stated here, and it bears out my initial thoughts - it would generate greater footfall and therefore, increase sales.  And people being detained in a store for a little longer, can also generate increased sales.

No I do not foresee queues out the doors, and the operation of selling lottery tickets, even paying out occasionally, never seems to take more than a few seconds anyway.

 

John

 

 

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28th Sep 2011 13:04

but beware the peaks

there is usually a long queue for tickets in the local supermarket on the evening of a large roll over.  Might not be such a problem in a rural area

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The Practitioner
28th Sep 2011 13:20

3 or 4 people waiting and scanning the store for impulse buys...

How bad would that be?  Unless my client's fears are borne out and we lose more profitable trade.

I still feel it must be worth dipping the toe in.

 

Thanks Lusterramjet anyway.

 

John Cotter

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By Tosie
28th Sep 2011 18:39

go for it

Clients who have lotteries have all said that they  don't know how they could do without it now and the increase in sales has been amazing.

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28th Sep 2011 19:10

One draw back - counter space.

Earnings from the lottery itself are not a lot I would guess, but dont forget they will be expected to sell scratch cards etc etc as well, so enough counter space is a must. Reliable internet connection is also a must.

And yes, it will boost sales of sweets, cigarettes, etc.

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