mr. randy chandler directorate of sales june 20, 2007
TRANSCRIPT
Mr. Randy ChandlerMr. Randy ChandlerDirectorate of SalesDirectorate of Sales
June 20, 2007 June 20, 2007
The Military Shopper
Randy Chandler
Directorate of Sales
June 20, 2007
DemographicsDemographics
Commissary & ExchangeShopper
Commissary & ExchangeShopper
Who is the Military Shopper?Who is the Military Shopper?
HHLD Income $40K+HHLD Income $40K+ Female Head Age 55+Female Head Age 55+ Affluent Suburban SpreadsAffluent Suburban Spreads Younger Bustling FamiliesYounger Bustling Families Empty Nest Couples Empty Nest Couples Senior CouplesSenior Couples Not in Work ForceNot in Work Force African AmericanAfrican American AsianAsian Non-CaucasianNon-Caucasian
Who is the Military Shopper?Who is the Military Shopper?Who is the Military Shopper?Who is the Military Shopper?
HHLD Income $40K+HHLD Income $40K+ Female Head Age 55+Female Head Age 55+ Affluent Suburban SpreadsAffluent Suburban Spreads Younger Bustling FamiliesYounger Bustling Families Empty Nest CouplesEmpty Nest Couples Senior CouplesSenior Couples Not In Work ForceNot In Work Force African AmericanAfrican American AsianAsian Non-CaucasianNon-Caucasian
Demographics of the Average Military Shopper
HHLD Income $40K+HHLD Income $40K+ Female Head Age Under 35Female Head Age Under 35 Female Head Age 65+Female Head Age 65+ 2 Member Household2 Member Household 3 – 4 Member Household3 – 4 Member Household Affluent Suburban SpreadsAffluent Suburban Spreads Younger Bustling FamiliesYounger Bustling Families Empty Nest CouplesEmpty Nest Couples Senior CouplesSenior Couples Not In Work ForceNot In Work Force African AmericanAfrican American AsianAsian Non-CaucasianNon-Caucasian
Demographics of the HEAVY Military Shopper
Your Most Important Shoppers
Heavy Military Shoppers Top 33% of TotalHeavy Military Shoppers Top 33% of Total• Spend nearly 9X more than light shopperSpend nearly 9X more than light shopper• Purchase in Military outlets nearly every weekPurchase in Military outlets nearly every week• Drive purchase size for channel at nearly $67 per trip.Drive purchase size for channel at nearly $67 per trip.
Heavy Military Shoppers Fiercely LoyalHeavy Military Shoppers Fiercely Loyal• 7X that of the light consumer; double the average7X that of the light consumer; double the average• More likely to purchase in commissary than competitionMore likely to purchase in commissary than competition
The Heavy Shopper Impact!The Heavy Shopper Impact!
Annual 2006% of
ShoppersBuying
RatePurchase
FrequencyPurchase
Size Outlet
Loyalty
Average Shopper 100% $1,291.7 20.8 $62.24 17.4HEAVY Shopper 33% $3,191.2 48.0 $66.52 35.2Light Shopper 67% $342.7 7.2 $47.89 5.2
Military Shoppers Spend Less of Wallet in Channel
12.9%
7.8%
1.2%
33.6%
15.9%
2.4%
1.4%7.2%
17.7% MILITARY
GROCERY
DRUG
MASS MERCH
SUPERCENTERS
CLUB
CONV/GAS
DOLLAR
ALL OTHER
Source: ACNielsen Homescan
Pt Chg vs MY
05
-0.7
-0.6
-0.1
-1.4
+0.3
+0.1
+0.3
-0.3
+2.3
Driven by the On-line Channel
% of All Outlet Loyalty - Mid-Year 2006 % of All Outlet Loyalty - Mid-Year 2006
41.1%1.4%
3.0%
12.6%
1.0%
6.4%25.2%
8.5%
0.8%
MILITARY
GROCERY
DRUG
MASS MERCH
SUPERCENTERS
CLUB
CONV/GAS
DOLLAR
ALL OTHER
Source: ACNielsen Homescan
Pt Chg vs MY
05
-1.2
-1.4
-0.1
-0.1
+0.7
+0.3
+0.2
-0.1
+1.7
Military Shoppers Spend Less of Food & Beverage Wallet in Channel
% of All Outlet Loyalty - Mid-Year 2006 % of All Outlet Loyalty - Mid-Year 2006
Roughly 40% of Military Shop Military Monthly for Food, HBC or GM - drives lower share of wallet
Source: ACNielsen Homescan
MILITARY SHOPPERS PENETRATION (% of Military HHs Purchasing in...)
100.0 98.0
81.990.7
62.3 60.349.5
72.1
58.049.7
69.569.6
86.380.4
97.9100.0
MILITARY GROCERY DRUG MASSMERCH
SUPERS CLUB CONV/GAS DOLLAR
Mid Year 2005 Mid Year 2006
Source: ACNielsen Homescan Total US
More Military Households Shop Supers
Frequency Declining in all Channels
FREQUENCY(Average Trips Per Household)
68.3
15.219.4
10.914.5 13.5
10.914.5 12.4
27.023.6
25.6
16.714.0
61.5
21.4
MILITARY GROCERY DRUG MASS MERCH SUPERS CLUB CONV/GAS DOLLAR
Mid Year 2005 Mid Year 2006
Source: ACNielsen Homescan
MILITARY SHOPPERSFREQUENCY
55.8
13.4
18.2
11.415.0
12.411.0
15.2
10.6
30.3
23.626.9
15.812.1
51.2
21.4
MILITARY GROCERY DRUG MASSMERCH
SUPERS CLUB CONV/GAS DOLLAR
Mid Year 2005 Mid Year 2006
Source: ACNielsen Homescan
Military Shopper Frequency Also Declining EverywhereMilitary Shopper Frequency Also Declining EverywhereOnly Convenience/Gas Trips per Shopper Maintained Only Convenience/Gas Trips per Shopper Maintained
Military Households Stock Up More - Make Less Trips
MILITARY SHOPPERSBASKET SIZE
$70.90
$10.60 $11.20
$20.90
$38.90
$15.70
$46.50
$54.00
$11.80$13.70
$83.20
$51.10
$42.50
$18.00$23.40
$61.00
MILITARY GROCERY DRUG MASS MERCH SUPERS CLUB CONV/GAS DOLLAR
Mid Year 2005 Mid Year 2006
Source: ACNielsen Homescan
Grocery Loyalty Driven by Convenience Trips
Military Shoppers % of channel dollars by trip type
9
13
19
29
41
62
68
70
21
21
26
27
28
17
19
34
32
30
26
21
10
11
37
34
24
18
10
3
5
1
26 9
Warehouse Clubs
Military
Supercenters
Mass Merch
Grocery
Drug
C-Stores
$ Stores
Immediate Fill In Routine Stock-up
Total US—ACNielsen Homescan Shopper Missions, 52wk end 7/2/05
Military Shoppers Decrease Buying Rate @ Most Other Grocers
Dollars Per Military Shopper
$1,275
$1,450
$288
$129
$146
$583
$392
$1,035
$400
$441
$932
$309
$129
$161
$648
$364
$1,161
$516
$436
$907
$1,306
$1,388
MILITARY
WALMART-SC
TARGET
WALGREENS
KMART
SAM'S
SAFEWAY
COSTCO
KROGER
FOOD LION
H-E-B
Mid Year 2005
Mid Year 2006
Source: ACNielsen Homescan
MILITARY CHANNELBUYER CONVERSION
46.5
66.9
43.3
63.6
71.7
42.4
65.8 67.2
54.6
47.3
57.350.6
79.9
69.3
48.253.6
45.8
60.156.0
79.8
DRYGROCERY
FROZEN DAIRY DELI MEAT FRESHPRODUCE
NON-FOOD ALCOHOLICBEV
GENERALMERCH
HEALTH &BEAUTY
Mid Year 2005 Mid Year 2006
Source: ACNielsen Homescan
Military Dry Grocery & Non-Food StrongHighest Conversion Rates in Market
DeCA provides benefit to diverse Patron Base
Patrons come from varied social and economic backgroundsSome are willing to pay a little more for qualitySome live payday to payday, looking for the best priceSome are just looking for the best value
All are looking to the “Commissary Benefit” to meet their needs
•Activity Duty–Officer–Enlisted
•Guard/Reserve
•Retiree•Single•Married•Families
Food StampFood Stamp WIC WIC
RegionRegion $ Value$ Value $ Value $ Value
DeCA East 16,360,013 6,845,557
DeCA West 9,865,423 15,363,330
DeCA Europe NA 6,657,761
Totals 23,225,436 28,866,648
RegionRegion QuantityQuantity $ Value$ Value
DeCA East 68,362,260 50,243,402
DeCA West 54,751,283 40,410,609
DeCA Europe 4,516,892 3,090,083
Totals 127,630,435 93,744,094
• Consumer segmentation affected by Consumer segmentation affected by
shifting consumption patternsshifting consumption patterns
– HealthHealth
– ConvenienceConvenience
– LifestyleLifestyle
• NewNew
• Consumer segmentation affected by Consumer segmentation affected by
shifting consumption patternsshifting consumption patterns
– HealthHealth
– ConvenienceConvenience
– LifestyleLifestyle
• NewNew
AgeAge
GenderGender
IncomeIncome
AgeAge
GenderGender
IncomeIncome
TraditionalTraditionalTraditionalTraditional
• This year sales stronger than initially anticipatedThis year sales stronger than initially anticipated
– Up $39M over last year (December a record @ $500M)Up $39M over last year (December a record @ $500M)
– Produce contribution has grown full point since 2001Produce contribution has grown full point since 2001
– Decline in center store contribution concentrated in Decline in center store contribution concentrated in
non-food (-2.1%) non-food (-2.1%)
– Aggressive new sales target of +$100M establishedAggressive new sales target of +$100M established
• Transaction count declining (but @ lesser rate)Transaction count declining (but @ lesser rate) – Last year’s decline more than double current year Last year’s decline more than double current year
result (-2.3% vs. -1.3%)result (-2.3% vs. -1.3%)
– Average sale @ $60.44 continues to grow (up 2.6%)Average sale @ $60.44 continues to grow (up 2.6%)
• This year sales stronger than initially anticipatedThis year sales stronger than initially anticipated
– Up $39M over last year (December a record @ $500M)Up $39M over last year (December a record @ $500M)
– Produce contribution has grown full point since 2001Produce contribution has grown full point since 2001
– Decline in center store contribution concentrated in Decline in center store contribution concentrated in
non-food (-2.1%) non-food (-2.1%)
– Aggressive new sales target of +$100M establishedAggressive new sales target of +$100M established
• Transaction count declining (but @ lesser rate)Transaction count declining (but @ lesser rate) – Last year’s decline more than double current year Last year’s decline more than double current year
result (-2.3% vs. -1.3%)result (-2.3% vs. -1.3%)
– Average sale @ $60.44 continues to grow (up 2.6%)Average sale @ $60.44 continues to grow (up 2.6%)
300
350
400
450
500
OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP
$ M
illio
ns
Cumulative YTD Sales
-0.8%+1.9%
+1.8%$3162 $3201
FY 2006 FY 2007 FY07 Project
FY 2007 YTD Sales Target: $3210 -$9 -0.3%
+1.7%
+$39
FY 2006 Vs. FY 2007
Commissary Sales - Total DeCA thru April 2007
+3.4%
+2.5%
+2.1%
-2.1%
6.000
6.500
7.000
7.500
8.000
8.500
OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP
FY 2006 FY 2007
Sales Per Transaction
Year Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep YTD
FY 06 $58.28 $59.22 $61.15 $58.06 $58.93 $58.01 $58.71 $57.04 $58.05 $57.60 $57.74 $60.03 $58.96
FY 07 $58.57 $60.57 $62.83 $59.57 $61.26 $60.71 $59.48 $60.44
-1.3%
# Transactions
-0.4%
Mil l
ions
-1.0%
Cumulative Transactions -0.446 -1.0%53.653 52.953
FY 2006 Vs. FY 2007
DeCA Customer Transactions Thru April
-1.2%
-1.4%
-0.5%-3.3%
150
175
200
225
250
OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP
$ M
illio
ns
Cumulative YTD Sales
-2.3% +0.6%
+0.3%$ 1416 $ 1420
FY 2006 FY 2007 FY07 Project
FY 2007 YTD Sales Target: $1422 -$2 -0.1%
+0.6%
+$ 4
FY 2006 Vs. FY 2007Commissary Sales – DeCA West thru April 2007Commissary Sales – DeCA West thru April 2007
+0.7%
+1.7%
+2.7%
-2.4%
2.000
2.500
3.000
3.500
4.000
OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP
FY 2006 FY 2007
Sales Per Transaction
Year Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep YTD
FY 06 $57.57 $58.27 $60.07 $57.63 $58.44 $57.45 $58.18 $56.33 $57.68 $57.39 $57.27 $59.38 $58.25
FY 07 $57.99 $59.78 $61.93 $59.35 $60.38 $60.19 $58.76 $59.78
-3.0%
# Transactions
-1.9%
Mil l
ions
-2.4%
Cumulative Transactions -0.571 -2. 3%24.322 23.751
FY 2006 Vs. FY 2007DeCADeCA WestWest CustomerCustomer Transactions Transactions
-2.2%
-1.6%
-1.9% -3.3%
• Promotional support continues to outpace Promotional support continues to outpace supermarkets supermarkets
– DeCA’s temporary price reduction (TPR) dollar fair DeCA’s temporary price reduction (TPR) dollar fair share index up to 139share index up to 139
• Billboard categories drive results (unit lift Billboard categories drive results (unit lift percentages)percentages)
– 102% Manager’s Special102% Manager’s Special– 84% Power Buys84% Power Buys– 67% Primaries67% Primaries
• Overall lift percentages outstanding Overall lift percentages outstanding – Unit Lift ~ 49.9%Unit Lift ~ 49.9%– Dollar Lift ~ 27.0%Dollar Lift ~ 27.0%
• Aggregate dollar results from program impressive Aggregate dollar results from program impressive – Sales: $100.6M - Average Per SKU Sales: $12.6KSales: $100.6M - Average Per SKU Sales: $12.6K– Savings: $18.0M - Average Per SKU Savings: $2.3KSavings: $18.0M - Average Per SKU Savings: $2.3K
• Promotional support continues to outpace Promotional support continues to outpace supermarkets supermarkets
– DeCA’s temporary price reduction (TPR) dollar fair DeCA’s temporary price reduction (TPR) dollar fair share index up to 139share index up to 139
• Billboard categories drive results (unit lift Billboard categories drive results (unit lift percentages)percentages)
– 102% Manager’s Special102% Manager’s Special– 84% Power Buys84% Power Buys– 67% Primaries67% Primaries
• Overall lift percentages outstanding Overall lift percentages outstanding – Unit Lift ~ 49.9%Unit Lift ~ 49.9%– Dollar Lift ~ 27.0%Dollar Lift ~ 27.0%
• Aggregate dollar results from program impressive Aggregate dollar results from program impressive – Sales: $100.6M - Average Per SKU Sales: $12.6KSales: $100.6M - Average Per SKU Sales: $12.6K– Savings: $18.0M - Average Per SKU Savings: $2.3KSavings: $18.0M - Average Per SKU Savings: $2.3K
• Periods 1 thru 9 OverallPeriods 1 thru 9 Overall – Dollar Sales Up 13.4%Dollar Sales Up 13.4%
– Dollar Savings Up 12.5%Dollar Savings Up 12.5%
• FY 07 Projection*FY 07 Projection*– Dollar Sales : $263.4M (+13.1%)Dollar Sales : $263.4M (+13.1%)– Dollar Savings: $53.3M (+12.4%)Dollar Savings: $53.3M (+12.4%)
Promotional Period ResultsPromotional Period Results
* Based on Promotional Period Contributions to Total* Based on Promotional Period Contributions to Total* Based on Promotional Period Contributions to Total* Based on Promotional Period Contributions to Total
RankRank DateDate Net SalesNet Sales EventEvent11 1/31/20041/31/2004 $26,032,612.39 $26,032,612.39 Super BowlSuper Bowl
22 2/3/20072/3/2007 $26,029,117.16 $26,029,117.16 Super BowlSuper Bowl
33 11/18/200611/18/2006 $25,255,742.11 $25,255,742.11 ThanksgivingThanksgiving
44 2/2/20022/2/2002 $24,835,463.69 $24,835,463.69 Super BowlSuper Bowl
55 11/19/200511/19/2005 $23,802,452.46 $23,802,452.46 ThanksgivingThanksgiving
66 11/17/200111/17/2001 $23,765,390.19 $23,765,390.19 ThanksgivingThanksgiving
77 2/4/20062/4/2006 $23,571,575.01 $23,571,575.01 Super BowlSuper Bowl
88 3/3/20013/3/2001 $23,308,730.41 $23,308,730.41 Pay DayPay Day
99 7/1/20057/1/2005 $23,169,866.86 $23,169,866.86 July 4thJuly 4th
1010 12/30/200512/30/2005 $23,125,008.98 $23,125,008.98 New Year's EveNew Year's Eve
1111 9/2/20069/2/2006 $23,100,835.32 $23,100,835.32 Labor DayLabor Day
1212 12/2/200612/2/2006 $22,896,133.19 $22,896,133.19 Pay DayPay Day
1313 11/20/200411/20/2004 $22,860,682.25 $22,860,682.25 ThanksgivingThanksgiving
1414 9/30/20069/30/2006 $22,638,613.41 $22,638,613.41 Pay DayPay Day
1515 2/3/20012/3/2001 $22,616,317.60 $22,616,317.60 Pay DayPay Day
EventEvent
YearYearDeCADeCA
Worldwide CasesWorldwide CasesDeCADeCA
Worldwide DollarsWorldwide Dollars
20052005 1,599,2831,599,283 $11,666,779$11,666,779
20062006 1,828,6311,828,631 $12,558,388$12,558,388
Percentage Percentage ChangeChange
14.3%14.3% 7.6%7.6%
EventEvent
YearYearUnitsUnits PercentPercent
ChangeChangeDollarsDollars PercentPercent
ChangeChange
2003(S)2003(S) 1,072,81,072,86666
N/AN/A $5,391,89$5,391,8977
N/AN/A
2004(S)2004(S) 1,936,61,936,65151
80.5%80.5% $9,986,97$9,986,9744
85.2%85.2%
2005(S)2005(S) 2,886,42,886,47171
49.0%49.0% $14,064,2$14,064,22424
40.8%40.8%
2006(S)2006(S) 4,195,34,195,37979
45.3%45.3% $23,116,2$23,116,28484
64.4%64.4%
2005(W2005(W))
1,568,31,568,38686
N/AN/A $8,342,99$8,342,9999
N/AN/A
2006(W2006(W))
2,053,72,053,79393
30.9%30.9% $12,151,4$12,151,44444
45.6%45.6%
2007(W2007(W))
2,354,62,354,64848
14.6%14.6% $18,326,5$18,326,51313
50.8%50.8%
• What was the What was the fastestfastest growing sub-department??? growing sub-department???
– Produce?Produce?
– Deli?Deli?
– Bakery?Bakery?
– Sushi To Go?Sushi To Go?
– Hot Foods?Hot Foods?
• All perishables dollars up $30MAll perishables dollars up $30M
• Sales trends leading the DeCA waySales trends leading the DeCA way
– Produce Produce +6.2% +6.2%
– Deli Deli +2.6% +2.6%
– Bakery Bakery +4.4% +4.4%
– Sushi To Go +37.0%Sushi To Go +37.0%
– Hot Foods Hot Foods +11.3% +11.3%
– SeafoodSeafood +33.0% +33.0%
• Meat trend still down, but improved 50% to -Meat trend still down, but improved 50% to -
1.7%1.7%
Perimeter Departments YTDPerimeter Departments YTD
• All perishables dollars up $5.0M (17% share)All perishables dollars up $5.0M (17% share)
• West sales trends tracking well with overall DeCAWest sales trends tracking well with overall DeCA
– Produce Produce +5.5% +5.5%
– Bakery Bakery +2.6% +2.6%
– Sushi To Go +37.0%Sushi To Go +37.0%
– Hot Foods Hot Foods +8.0% +8.0%
– SeafoodSeafood +25.5% +25.5%
West Perimeter Departments YTDWest Perimeter Departments YTD
• New produce distribution systemNew produce distribution system
• Resulted in improved sales, quality, and pricingResulted in improved sales, quality, and pricing
– Minor concerns being worked expeditiouslyMinor concerns being worked expeditiously
• Decreased order-ship timeDecreased order-ship time
• Improved merchandising supportImproved merchandising support
• Resulting in more frequent shopping trips to storeResulting in more frequent shopping trips to store
• New, improved specificationsNew, improved specifications
• Resulted in increased yieldResulted in increased yield
• Reduced laborReduced labor
• Minimal impact on priceMinimal impact on price
• Sales increasingSales increasing
• Introduction of tubs has shifted buying patternsIntroduction of tubs has shifted buying patterns
• MBU respondedMBU responded• Cleansed mix through category reviewCleansed mix through category review• Altered case merchandising profile to maximize Altered case merchandising profile to maximize
returnreturn
• Shift in merchandising expanded shelf space, Shift in merchandising expanded shelf space, reduced number of pegs, and improved tub utilityreduced number of pegs, and improved tub utility
• Anticipated impact on annual sales: Plus $1.5 MillionAnticipated impact on annual sales: Plus $1.5 Million
• Introduction of tubs has shifted buying patternsIntroduction of tubs has shifted buying patterns
• MBU respondedMBU responded• Cleansed mix through category reviewCleansed mix through category review• Altered case merchandising profile to maximize Altered case merchandising profile to maximize
returnreturn
• Shift in merchandising expanded shelf space, Shift in merchandising expanded shelf space, reduced number of pegs, and improved tub utilityreduced number of pegs, and improved tub utility
• Anticipated impact on annual sales: Plus $1.5 MillionAnticipated impact on annual sales: Plus $1.5 Million
• Yogurt sales top ten growth category for several Yogurt sales top ten growth category for several yearsyears
• Needed expanded category for entrance of pro-Needed expanded category for entrance of pro-biotics biotics
• In stock rates greatly improvedIn stock rates greatly improved
• Which category is most “Which category is most “impulsiveimpulsive” ???” ???
– Carbonated Beverages?Carbonated Beverages?– Energy Bars?Energy Bars?– Salty Snacks?Salty Snacks?– Crackers?Crackers?– Snack Bars?Snack Bars?– Cookies?Cookies?– Candy?Candy?
• Which category is most “Which category is most “impulsiveimpulsive” ???” ???
– Carbonated Beverages?Carbonated Beverages?– Energy Bars?Energy Bars?– Salty Snacks?Salty Snacks?– Crackers?Crackers?– Snack Bars?Snack Bars?– Cookies?Cookies?– Candy?Candy?
• Premium chocolate sectionPremium chocolate section
• Dark chocolatesDark chocolates
• New item introductionsNew item introductions
• Health & well beingHealth & well being– AntioxidantsAntioxidants– OrganicsOrganics
• Premium chocolate sectionPremium chocolate section
• Dark chocolatesDark chocolates
• New item introductionsNew item introductions
• Health & well beingHealth & well being– AntioxidantsAntioxidants– OrganicsOrganics
• Integrated merchandising setIntegrated merchandising set– Toiletries over baby wipes builds sales synergyToiletries over baby wipes builds sales synergy– Brand blocking adds visibilityBrand blocking adds visibility
• Concept fully vetted thru virtual & in-store Concept fully vetted thru virtual & in-store teststests
• Baby wipes result:Baby wipes result:– Dollars per purchase occasion up 24%Dollars per purchase occasion up 24%– Units per purchase occasion up 25%Units per purchase occasion up 25%
• Toiletries result:Toiletries result:– Dollars per purchase occasion up 20%Dollars per purchase occasion up 20%– Units per purchase occasion up 8%Units per purchase occasion up 8%
• Potential DeCA sales growth $1.3MPotential DeCA sales growth $1.3M
• Integrated merchandising setIntegrated merchandising set– Toiletries over baby wipes builds sales synergyToiletries over baby wipes builds sales synergy– Brand blocking adds visibilityBrand blocking adds visibility
• Concept fully vetted thru virtual & in-store Concept fully vetted thru virtual & in-store teststests
• Baby wipes result:Baby wipes result:– Dollars per purchase occasion up 24%Dollars per purchase occasion up 24%– Units per purchase occasion up 25%Units per purchase occasion up 25%
• Toiletries result:Toiletries result:– Dollars per purchase occasion up 20%Dollars per purchase occasion up 20%– Units per purchase occasion up 8%Units per purchase occasion up 8%
• Potential DeCA sales growth $1.3MPotential DeCA sales growth $1.3M
• Redefine relationshipsRedefine relationships
• Create valueCreate value
• Achieve goalsAchieve goals
• Customize programsCustomize programs
• Create “WOW” factorCreate “WOW” factor
• Redefine relationshipsRedefine relationships
• Create valueCreate value
• Achieve goalsAchieve goals
• Customize programsCustomize programs
• Create “WOW” factorCreate “WOW” factor
• Thanks for the San Diego Experience Thanks for the San Diego Experience
• Six Commissary Council Committees Six Commissary Council Committees
• Broad/comprehensive cooperationBroad/comprehensive cooperation– COOP AdsCOOP Ads– Coupon OutreachCoupon Outreach– Systems ApplicationsSystems Applications– Category Review RefinementsCategory Review Refinements– Promo Support Across DepartmentsPromo Support Across Departments– Vendor StockingVendor Stocking– Promotional ResponsePromotional Response– Market InsightsMarket Insights
• Thanks for the San Diego Experience Thanks for the San Diego Experience
• Six Commissary Council Committees Six Commissary Council Committees
• Broad/comprehensive cooperationBroad/comprehensive cooperation– COOP AdsCOOP Ads– Coupon OutreachCoupon Outreach– Systems ApplicationsSystems Applications– Category Review RefinementsCategory Review Refinements– Promo Support Across DepartmentsPromo Support Across Departments– Vendor StockingVendor Stocking– Promotional ResponsePromotional Response– Market InsightsMarket Insights
March Ad – 80,000 Circ.
May/June Ad 220,000 Circulation
• Intent is to billboard perishable Intent is to billboard perishable departmentsdepartments– Use in DeCA circulars/post newspaper insertsUse in DeCA circulars/post newspaper inserts– Parallels retailer normsParallels retailer norms
• Capitalize on customer’s menu driven Capitalize on customer’s menu driven psychologypsychology
• Build sales synergy & incremental volume Build sales synergy & incremental volume across total promotion package across total promotion package
• Intent is to billboard perishable Intent is to billboard perishable departmentsdepartments– Use in DeCA circulars/post newspaper insertsUse in DeCA circulars/post newspaper inserts– Parallels retailer normsParallels retailer norms
• Capitalize on customer’s menu driven Capitalize on customer’s menu driven psychologypsychology
• Build sales synergy & incremental volume Build sales synergy & incremental volume across total promotion package across total promotion package
● 32 Categories downsized: Dollar Result +.71%32 Categories downsized: Dollar Result +.71%
● 92 Categories upgraded: Dollar Result + 1.78 92 Categories upgraded: Dollar Result + 1.78 %%
• Four categories reset @ Ft Lee in January 2006Four categories reset @ Ft Lee in January 2006– New planograms installed within first weekNew planograms installed within first week– Sales impact evaluated for subsequent 24 week periodSales impact evaluated for subsequent 24 week period– Dollar increases dramatic compared to same period PYDollar increases dramatic compared to same period PY– Gains ranged between 3.1% and 15.5% for identical mixGains ranged between 3.1% and 15.5% for identical mix– Overall change in dollars for categories involved + 7.4% Overall change in dollars for categories involved + 7.4%
• 60 day set implementation policy could build sales 60 day set implementation policy could build sales quicklyquickly– As more set results quantified, sales estimate to be As more set results quantified, sales estimate to be
developed developed
• Four categories reset @ Ft Lee in January 2006Four categories reset @ Ft Lee in January 2006– New planograms installed within first weekNew planograms installed within first week– Sales impact evaluated for subsequent 24 week periodSales impact evaluated for subsequent 24 week period– Dollar increases dramatic compared to same period PYDollar increases dramatic compared to same period PY– Gains ranged between 3.1% and 15.5% for identical mixGains ranged between 3.1% and 15.5% for identical mix– Overall change in dollars for categories involved + 7.4% Overall change in dollars for categories involved + 7.4%
• 60 day set implementation policy could build sales 60 day set implementation policy could build sales quicklyquickly– As more set results quantified, sales estimate to be As more set results quantified, sales estimate to be
developed developed
• What’s the most common error on 40-15s???What’s the most common error on 40-15s???
– Invalid GTINs?Invalid GTINs?
– Invalid case packs?Invalid case packs?
– Erroneous product dimensions?Erroneous product dimensions?
– Erroneous tie & tier?Erroneous tie & tier?
– Erroneous availability dates?Erroneous availability dates?
• What’s the most common error on 40-15s???What’s the most common error on 40-15s???
– Invalid GTINs?Invalid GTINs?
– Invalid case packs?Invalid case packs?
– Erroneous product dimensions?Erroneous product dimensions?
– Erroneous tie & tier?Erroneous tie & tier?
– Erroneous availability dates?Erroneous availability dates?
• 78% of 40-15s being returned78% of 40-15s being returned
• Types of errors/omissionsTypes of errors/omissions– Missing/invalid GTINs: 38%Missing/invalid GTINs: 38%– Invalid case packs:Invalid case packs: 5% 5%– Erroneous product dimensions: 5%Erroneous product dimensions: 5%– Erroneous tie & tier:Erroneous tie & tier: 2% 2%
● Product availability dates:Product availability dates: 50% 50%● Refers to availability at distributor (FDS)Refers to availability at distributor (FDS)● Refers to availability for delivery (DSD)Refers to availability for delivery (DSD)
• 78% of 40-15s being returned78% of 40-15s being returned
• Types of errors/omissionsTypes of errors/omissions– Missing/invalid GTINs: 38%Missing/invalid GTINs: 38%– Invalid case packs:Invalid case packs: 5% 5%– Erroneous product dimensions: 5%Erroneous product dimensions: 5%– Erroneous tie & tier:Erroneous tie & tier: 2% 2%
● Product availability dates:Product availability dates: 50% 50%● Refers to availability at distributor (FDS)Refers to availability at distributor (FDS)● Refers to availability for delivery (DSD)Refers to availability for delivery (DSD)
• Deletion decision made (mfg or buyer driven)Deletion decision made (mfg or buyer driven)
• After 30 days, paperwork processed by File After 30 days, paperwork processed by File MaintenanceMaintenance– Item flagged for phase out in DIBSItem flagged for phase out in DIBS– Held on file for 30 days (60 days for NW box, Hawaii stores) Held on file for 30 days (60 days for NW box, Hawaii stores)
• If distributor wants to eliminate residual stock If distributor wants to eliminate residual stock remainingremaining– Broker follows procedures in NTT 05-33 (12 January 05)Broker follows procedures in NTT 05-33 (12 January 05)– DeCA receives 50% markdown for dead stockDeCA receives 50% markdown for dead stock
• After 30 days as dead stock in DIBS, item deletedAfter 30 days as dead stock in DIBS, item deleted
• Deletion decision made (mfg or buyer driven)Deletion decision made (mfg or buyer driven)
• After 30 days, paperwork processed by File After 30 days, paperwork processed by File MaintenanceMaintenance– Item flagged for phase out in DIBSItem flagged for phase out in DIBS– Held on file for 30 days (60 days for NW box, Hawaii stores) Held on file for 30 days (60 days for NW box, Hawaii stores)
• If distributor wants to eliminate residual stock If distributor wants to eliminate residual stock remainingremaining– Broker follows procedures in NTT 05-33 (12 January 05)Broker follows procedures in NTT 05-33 (12 January 05)– DeCA receives 50% markdown for dead stockDeCA receives 50% markdown for dead stock
• After 30 days as dead stock in DIBS, item deletedAfter 30 days as dead stock in DIBS, item deleted
• Pilot test successfully completed (Oct-Dec 06)Pilot test successfully completed (Oct-Dec 06)• Five participantsFive participants
• Kellogg’s, J&J, Nestle, Nabisco, Callard BowserKellogg’s, J&J, Nestle, Nabisco, Callard Bowser
• Seventeen vendors currently participatingSeventeen vendors currently participating
• Additional vendors in negotiationAdditional vendors in negotiation
• Program enhancements under reviewProgram enhancements under review
• Pilot test successfully completed (Oct-Dec 06)Pilot test successfully completed (Oct-Dec 06)• Five participantsFive participants
• Kellogg’s, J&J, Nestle, Nabisco, Callard BowserKellogg’s, J&J, Nestle, Nabisco, Callard Bowser
• Seventeen vendors currently participatingSeventeen vendors currently participating
• Additional vendors in negotiationAdditional vendors in negotiation
• Program enhancements under reviewProgram enhancements under review
• Evaluate return on investmentEvaluate return on investment
• CARTS/SCO impactCARTS/SCO impact
• Queuing line solution?Queuing line solution?
• Impulse itemsImpulse items
• Evaluate return on investmentEvaluate return on investment
• CARTS/SCO impactCARTS/SCO impact
• Queuing line solution?Queuing line solution?
• Impulse itemsImpulse items
• Internet businessInternet business– Develop/implement third party moduleDevelop/implement third party module– Expand special pack module, match mix to occasionExpand special pack module, match mix to occasion
• Emphasize growth categories Emphasize growth categories – Drive salesDrive sales– Leverage competitive strengthsLeverage competitive strengths– Focus mix changes on emerging segmentsFocus mix changes on emerging segments
• Improve promotional flexibility Improve promotional flexibility – Correlate with partners’ strategic goals to maximize Correlate with partners’ strategic goals to maximize
incremental growthincremental growth– Ensure capability to integrate new item launches and Ensure capability to integrate new item launches and
react to changing market conditionsreact to changing market conditions– Extend departmental coverage to include perimeterExtend departmental coverage to include perimeter– Assess success using pre-defined metrics Assess success using pre-defined metrics
• Internet businessInternet business– Develop/implement third party moduleDevelop/implement third party module– Expand special pack module, match mix to occasionExpand special pack module, match mix to occasion
• Emphasize growth categories Emphasize growth categories – Drive salesDrive sales– Leverage competitive strengthsLeverage competitive strengths– Focus mix changes on emerging segmentsFocus mix changes on emerging segments
• Improve promotional flexibility Improve promotional flexibility – Correlate with partners’ strategic goals to maximize Correlate with partners’ strategic goals to maximize
incremental growthincremental growth– Ensure capability to integrate new item launches and Ensure capability to integrate new item launches and
react to changing market conditionsreact to changing market conditions– Extend departmental coverage to include perimeterExtend departmental coverage to include perimeter– Assess success using pre-defined metrics Assess success using pre-defined metrics
• Evaluate product mix frequently on marginal return Evaluate product mix frequently on marginal return basisbasis
– Relate to known segment trend informationRelate to known segment trend information– Specify new item performance objectives up frontSpecify new item performance objectives up front– Periodically assess planogram sufficiency as SOPPeriodically assess planogram sufficiency as SOP
• Create a focused view of future market conditions Create a focused view of future market conditions – Collective effort thru Commissary CouncilCollective effort thru Commissary Council– Use hard/soft data and manufacturer R&D insightsUse hard/soft data and manufacturer R&D insights– Predict most likely mix of goods/services demanded Predict most likely mix of goods/services demanded
by future consumers by future consumers – Build suite of operational tactics to move forwardBuild suite of operational tactics to move forward– Establish 1/3/5 year objectives to measure movement Establish 1/3/5 year objectives to measure movement
toward end statetoward end state– Refine plans on the move as conditions/insights Refine plans on the move as conditions/insights
warrant warrant
• Evaluate product mix frequently on marginal return Evaluate product mix frequently on marginal return basisbasis
– Relate to known segment trend informationRelate to known segment trend information– Specify new item performance objectives up frontSpecify new item performance objectives up front– Periodically assess planogram sufficiency as SOPPeriodically assess planogram sufficiency as SOP
• Create a focused view of future market conditions Create a focused view of future market conditions – Collective effort thru Commissary CouncilCollective effort thru Commissary Council– Use hard/soft data and manufacturer R&D insightsUse hard/soft data and manufacturer R&D insights– Predict most likely mix of goods/services demanded Predict most likely mix of goods/services demanded
by future consumers by future consumers – Build suite of operational tactics to move forwardBuild suite of operational tactics to move forward– Establish 1/3/5 year objectives to measure movement Establish 1/3/5 year objectives to measure movement
toward end statetoward end state– Refine plans on the move as conditions/insights Refine plans on the move as conditions/insights
warrant warrant
• Treasure hunt with club packs – build shopping fun Treasure hunt with club packs – build shopping fun – Match your mix to patron facesMatch your mix to patron faces– Use as lever to enhance trade support throughout Use as lever to enhance trade support throughout
storestore
• Expansion of display-ready palletsExpansion of display-ready pallets– Big buck opportunity @ minimal labor costBig buck opportunity @ minimal labor cost– We’ll try to send visuals & details in advance We’ll try to send visuals & details in advance
electronicallyelectronically
• Streamlining promotional package sizeStreamlining promotional package size– Eliminating listing of line item extensionsEliminating listing of line item extensions– Reducing number of secondary itemsReducing number of secondary items– Extending promotional support throughout K codes Extending promotional support throughout K codes
• Treasure hunt with club packs – build shopping fun Treasure hunt with club packs – build shopping fun – Match your mix to patron facesMatch your mix to patron faces– Use as lever to enhance trade support throughout Use as lever to enhance trade support throughout
storestore
• Expansion of display-ready palletsExpansion of display-ready pallets– Big buck opportunity @ minimal labor costBig buck opportunity @ minimal labor cost– We’ll try to send visuals & details in advance We’ll try to send visuals & details in advance
electronicallyelectronically
• Streamlining promotional package sizeStreamlining promotional package size– Eliminating listing of line item extensionsEliminating listing of line item extensions– Reducing number of secondary itemsReducing number of secondary items– Extending promotional support throughout K codes Extending promotional support throughout K codes
• Be aggressive – use “the glass is half full” approachBe aggressive – use “the glass is half full” approach– Meat truckloads / seafood roadshows Meat truckloads / seafood roadshows – Farmer’s markets / plant truckloadsFarmer’s markets / plant truckloads– Complement with special contractor sales effortsComplement with special contractor sales efforts
• Use all authorized media/methods to get the word outUse all authorized media/methods to get the word out– Be ready for perishable ads in base newspapersBe ready for perishable ads in base newspapers
• Cross-merchandise – build a “total store” plan & Cross-merchandise – build a “total store” plan & execute execute
• Organics are growing rapidly in many marketsOrganics are growing rapidly in many markets
• Be aggressive – use “the glass is half full” approachBe aggressive – use “the glass is half full” approach– Meat truckloads / seafood roadshows Meat truckloads / seafood roadshows – Farmer’s markets / plant truckloadsFarmer’s markets / plant truckloads– Complement with special contractor sales effortsComplement with special contractor sales efforts
• Use all authorized media/methods to get the word outUse all authorized media/methods to get the word out– Be ready for perishable ads in base newspapersBe ready for perishable ads in base newspapers
• Cross-merchandise – build a “total store” plan & Cross-merchandise – build a “total store” plan & execute execute
• Organics are growing rapidly in many marketsOrganics are growing rapidly in many markets
• Focus on perimeterFocus on perimeter
• Focus on impulse itemsFocus on impulse items
• Club pack program has become annual programClub pack program has become annual program-Focus on hot deals as well as seasonal -Focus on hot deals as well as seasonal
• Case pack salesCase pack sales-Complement with exchange items where beneficial -Complement with exchange items where beneficial to bothto both
Support vendor stocking on every payday weekendSupport vendor stocking on every payday weekend
• Make sure you execute the planMake sure you execute the plan
And Create Excitement!And Create Excitement!