Increase Sales in Center Store: Six Solutions
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1 Increase Sales in Center Store: Six Solutions Manda Johns: Senior Vice President Merchandising East Region Donna Banks-Ficcio: Vice President Center Store West Region Dan Magnuson: Director G/F/D West Region 1
2 Increase Sales in Center Store: Six Solutions Agenda 1. Dairy Reinvention 2. Frozen Reinvention 3. Specialty Foods 4. Take Back the Ends 5. Merchandising Solutions- New Items 6. Merchandising Solutions- Home Store 2
3 Dairy Aisle Reinvention DAIRY THE LAND OF OPPORTUNITY Dairy is 17% of total store profit in only 3% of space and accounts for 64 billion in sales Dairy provides $100 in profit per square foot versus grocery s $16 97% household penetration 65% of the purchased within dairy are planned 3
4 Dairy Aisle Reinvention Dairy is Critical Five Year Growth Projections +16.6% 4
5 Dairy Aisle Reinvention Optimize the Dairy Aisle Within Current Space 5
6 Dairy Aisle Reinvention 6
7 Retailer Success Story Results YTD through Pd 5 Increase: +$1.23M, +~93,368 cases +8% Stores that executed Dairy Aisle F16 Sales +7.97% Cases % All Other Independent Business Sales -.44% Cases +.74% 7
8 Dairy Aisle Reinvention Implementing at Your Store Contact Account Manager Assess proper space allocation and layout based on store sales Assess pricing and promotional plan Reset store 8
9 Frozen Aisle Reinvention 1.1 lost trips year over year Why Focus on Frozen 3 rd largest Department in total sales Over 99% Household penetration Evolving consumer preferences: value, convenience, taste, healthy alternatives Frozen Foods Department represents 8.6% of $ Sales for total SVU Opportunity gap potential in SVU Top 4 Categories contribute 66% to Department Dollar sales in SVU Shift in consumer demographics 9
10 Frozen Aisle Reinvention Implementing at Your Store Expo Education Session- Frozen Reinvention Room 6 11am-11:50 am 4 pm- 4:50 pm Contact Account Manager Assess proper space allocation and layout based on store sales Assess pricing and promotional plan Reset store 10
11 Retailer Success Story Results YTD through Pd 5 Increase: +$53k, +~5,700 cases +5.3% Stores that executed Frozen Aisle F16 Sales +5.28% Cases % All Other Independent Business Sales -1.92% Cases -2.08% 26 Week National Frozen Average Sales +0.07% Units -3.4% 11
12 Specialty Foods Organic and Free From Segments Organic and Free From sales are growing In 2014 sales reached $35.9 Billion Merchandising Tactics: Integration, Segregation, or a mix of both 12
13 Specialty Foods Shoppers Perception All Shoppers Gen Y Gen X Boomers Seniors Have Nots Haves Total 2, ,326 1,042 Does not contain harmful chemicals 65% 53% 65% 71% 79% 65% 66% Quality of organic food products is better 39% 45% 40% 35% 32% 38% 41% Supports local farms and producers 39% 34% 32% 45% 51% 41% 37% Safer than "regular" food 36% 34% 39% 34% 37% 34% 38% More nutricious than "regular" food 32% 36% 33% 28% 30% 34% 30% Better for the environment 25% 23% 21% 28% 29% 23% 27% Taste of organic food products is better 20% 22% 21% 21% 12% 22% 18% It's really no more expensive than nonorganic 12% 17% 11% 12% 6% 14% 10% Concern for animal welfare 12% 15% 10% 11% 11% 12% 11% Important for kids to eat organic foods 12% 17% 20% 3% 1% 9% 14% Other 9% 6% 8% 11% 12% 9% 9% Source: Kantar Retail ShopperScope, February 2015 Note: Shading idicates significantly greater percentage vs. all shoppers; border indicates significant lower percentage (95% confidence level) 13
14 Specialty Foods Supervalu Independent s Market Share Organic Growth Trends Total US AOC SV Independents - Dollar % Chg vs YAG Dollars $13.1B SV Independent 16.2% Dollar Chg vs YAG $1.8B RM Food 14.1% Dollar % Chg vs YAG 15.9% RM AOC 15.9% 14
15 Specialty How to Implement Item Selection Wild Harvest Expansion Kehe Program Merchandising Integration, Segregation, or a mix of both Promotional Strategy 15
16 Take Back the Ends Know your Competition 16
17 Take Back the Ends By the Numbers. *Source: Region store level measurements **Source: IRI Market Advantage Data 17
18 Take Back the Ends Customer Intercept 18
19 Take Back the Ends Three Pillars of BIC Display Resonate with Shopper, Retailer and are Store efficient Shopper Engagement Build Baskets Enhance Profitability Placement Less is More! Ease of Use / shopability Consumer relevant item Appealing product Signage New Items Meal Solutions Better for You Competitive pricing Seasonally appropriate Shift Customer shopping patterns Private Brand focus Incremental purchase Prebook Allowances Leverage Labor Source: Menasha Corporation, Packaging & POP Displays 19
20 Take Back the Ends Implementing at Your Store- Display Builders Program Retailer has to sign up for the scripted end cap display program Features 4-5 displays per month with minimum of 4 weeks of allowance. Most items have display builders only incremental funding or extended weeks of funding. Retailer agrees to auto-distribution of tie in items which are automatically loaded for the store. Retailer participation is optional for each display and distributions may be cancelled through SV Harbor prior to shipping. 20
21 Take Back the Ends 21
22 Take Back the Ends Expo Floor Pallets can be placed in fixed end locations as designated Many Shippers can be worked directly to the end Keeps seasonal relevance and consumer excitement Pre-booking items and additional Monster/Auction Buy allowances help to increase Gross Profit 22
23 Merchandising Solutions- New Items New Items Importance of Speed to Store New items create excitement for the consumer Helps to differentiates from the competition Capitalize on promotional allowances Capitalize on sales by increasing market basket purchase Top 200 new items generated 7.9B in sales according to IRI Speed to Store Programs Focused on key new item launches Supported via Home Store, Auto Distribution Program, and Shelf Tag Support Examples of recent new items can be found on the Expo Floor 23
24 Merchandising Solutions- Home Store Home Store Solutions New Item Cut In (NICI s) New item cut-ins selected based on item relevance Updating POG s prior to manufacturer s first ship Planogram Resets New Store Sets Layout Suggestions Flow/Adjacency Can be found on the Expo Floor in the Professional Services area 24
25 Increase Sales in Center Store: Six Solutions 1. Dairy Reinvention- Upper Wilkins Hall 2. Frozen Reinvention- Upper Wilkins Hall 3. Specialty Foods- Booths , Wild Harvest- Booths Take Back the Ends- Upper Wilkins Hall 5. Merchandising Solutions- New Items- Kellogg Lobby Hall 6. Merchandising Solutions- Home Store- Booths
26 Questions? 26
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