It s a Retail Jungle Out There

Transcription

1 It s a Retail Jungle Out There Unpacking your Private Brands Survival Kit EXPO 2015 PRIVATE BRANDS SEMINAR David Young, Vice President Private Brands

2 It s a Retail Jungle Out There.... Competing feels a bit like Guerrilla tactics. Agenda Global & Domestic Competitive Trends Consumer Trends Private Brands Portfolio Private Brands Strategy

3 Global & Domestic Competitive Trends: ASSESSING THE GROCERY BATTLEFIELD

4 The Grocery Battlefield is Changing. Competition for market share is tougher than ever.

5 Domestic Competition is Heating Up.

6 Regional and Local Competition is Stiff.

7 Alternate Channels are Waging War.

8 Specialty, Small & Big Box are Taking Aim.

9 Dollar & Deep Discount are in the Fight.

10 Organic & Specialty are Gaining Ground.

11 Over 38,000 Stores, Raging for More Share.

12 And Another, Bigger Threat is Coming Soon. 6 th Largest grocery retailer in the world 11,000 stores in 28 countries in Europe Estimated $98.3B Sales 2014 US Market in 2018 SOURCE: SOURCE:

13 Lidl Compared to Other Global Competition SOURCE:

14 Mergers, Acquisitions and Collaboration Who s next? SOURCE: SOURCE:

15 Who Will Survive the Battle in the Next 5 Years?

16 Consumer Trends: UNDERSTANDING THE TRUE CHALLENGE

17 Competition is Only Part of the Battle. The greatest retail challenge is not the competition, but rather the evolving consumer.

18 Consumer Dynamics are changing. Understanding and adapting to: Emerging Trends Changing needs Evolving habits Shifting values Aging population New priorities

19 Baby Boomers: The Aging Population

20 Millennials: New, Emerging Decision-Makers SOURCE:

21 Baby Boomer traditional shopping patterns Weekly shopping trips One Primary Grocery Store Limited alternate channels 1X/ wk 1X/ mth 1X/ mth

22 Baby Boomer changing shopping patterns Strategic shopper Increased shopping trips Multiple stops per trip Numerous preferred stores Multiple alternate channels 1X/ wk 1X/ wk 1X/ wk 2X/ mth 1X/ mth 1X/ mth

23 Millennial complex shopping patterns Social & media savvy shopper Frequent meal shopping trips Multiple stops per trip Numerous preferred stores Multiple alternate channels Frequent restaurant dining 2X/ wk 2X/ wk 1X/ wk 1X/ mth 1X/ mth 3X/ wk 3X/ wk

24 GenX ers fall somewhere in the middle. Hipper than their Boomer parents Label-conscious consumers Family shopping & stock-up Multiple stops per trip Multiple alternate channels Regular family restaurant dining 2X/ wk 1X/ wk 2X/ mth 2X/ mth 1X/ mth 2X/ wk 2X/ wk

25 Private Brands Portfolio: WINNING WITH PRIVATE BRANDS

26 4 Ways American Grocery Shopping Is Changing Forever Multiple Channels Private Brands popularity Specialty format stores Fresh Produce SOURCE:

27 The US Market is Worth Fighting For. Total 2014 US Supermarket Sales = $638.3 billion Total # of Supermarkets = 37,716 ($2 million or more in 2014 annual sales) SOURCE:

28 Private Brands is Pivotal in the Battle. Store Brands Growth 2014 Total US Private Label Sales = $115.3 billion Store Brands outpaces National Brands

29 Building a Strong Portfolio of Brands *Estimated Total FY15 Private Brands Retail Sales = $2.13 Billion Essential Everyday Wild Harvest Super Chill Equaline Culinary Circle Shoppers Value $1.32 Billion $79.9 Million $72.5 Million $66.7 Million $65.9 Million $95.9 Million *Estimated Retail Sales based on Wholesale Sales x Average Retail Mark-up

30 How do Independents Survive the Onslaught? Private Brands provides a competitive advantage.

31 The Myth of Category Penetration Winning with Private Brands is no longer just about penetration or having your own version of cereal 30% cheaper than the National Brand. It s much more than that. It s more strategic. SOURCE: Christopher Durham, VP of Retail Brands, Theory House

32 Strategic Private Brands Execution: Brand Identity = Store Identity More profitable sales Customer loyalty & trust Store differentiation Better perceived value Strategic product assortment

33 Private Brands Strategy: IMPLEMENTING THE BATTLE PLAN

34 What s the Battle Plan? 5 Keys to Winning with Private Brands 1. Make our brands YOUR brands. 2. Grow your Private Brands culture. 3. Diversify your portfolio. 4. DRIVE Private Brands. 5. Use us as your Private Brands resource.

35 1. Make Our Brands YOUR Brands. Confidence in our Portfolio 1. Demanding Quality Standards Equal to or Better than the National Brand On-trend and innovative flavor profiles Responsibly sourced products Destination brands that your shoppers Seek, Love, & Trust.

36 2. Grow Your Private Brands Culture. Merchandising 1. Product Assortment Advertising & Marketing Signage Scripted End Caps Pricing and Profitability Single-brand Solutions Departmental Voids Store Personnel

37 3. Diversify Your Portfolio. 1. Essential Everyday is a mega-brand that shoppers SEEK, LOVE & TRUST. EQUALINE is a HUGE health and beauty opportunity. Wild Harvest is the healthy, affordable option your shoppers want. Culinary Circle, redesigned, builds your premium-brand selection.

38 4. DRIVE Private Brands Strategy. Execute an aggressive Private Brands ad strategy 25% Ad Penetration Your Private Brands First! Private Brands Shippers and Displays EQUALINE Shippers and Displays Seasonal Displays and Holiday Gift Center

39 5. Use Us as Your Private Brands Resource. We value your partnership with us in Private Brands. Our goal is to help you grow your Private Brands sales. How can we support you? Private Brands Sales Contacts: WEST Region Contact: Paul Poliachik Cell: Office: EAST Region Contact: Austin Tomlin Cell: Office: WEST Corporate Contact: Joe Meurer Cell: Office: EAST Corporate Contact: Mike Steffens Cell: Office:

40 We re in the Fight Together. We appreciate your business. Thanks for your support of our Private Brands!