Sales Update
DeCA West
Ms. Michelle Frost
Chief, Semi-Perishables
End of Cheap Food?
 Healthcare costs
 Oil price surge
 Weak dollar
 Weather
• Drought in Australia
• Flooding in Argentina
 Demand
• China beef consumption has doubled
 Impact of ethanol
Sustainability?
Corn
It takes
450 lbs of
corn to
produce
enough
ethanol to
fill an SUV
gas tank
2.5 lbs corn = 1lb poultry
7 lbs corn = 1lb beef
1,500 gls water = 1lb beef
Water
It takes
800
gallons of
water per
person per
day to
produce
daily food
intake
Consumer Impact
 FMI Trend Reports
• 71% increase in home cooking frequency
• 67% buying fewer luxury items
• 60% buying more store brands
 Value will be focus
 Fewer trips to secondary stores
 Fewer trips = STOCK UP
Retail Shift
 New outlets
• Supercenters, 70%
• Dollar stores, 64%
 Losing ground
• Drug channel, -3%
• Grocery, -6%.
 Same store dollar sales declined as well
Defining Trends
 Four trends will shape the retail operating
environment the remainder of this decade:
 Aging population
 Increasing ethnic diversity
 Need for speed
 Health & wellness concerns
 Opportunities products, alterations to the
store (lighting, store set) accommodate older
shoppers’ limitations
The Three Ps
 Manufacturers trying to keep pace with new
items
• Portability
• Preparation simplicity
• Preparation time
 New product concepts must respond to speedof-life issues without sacrificing flavor
Fastest-Growing Categories
>$1 Billion
1.
Drinkable yogurt
2.
Fresh fish/shellfish & seafood
3.
Alcoholic cider
4.
Ready-to-eat salads
5.
Baby formula
6.
Dairy-based drinks
New Team Members
 Brad McMinn – Chief, Perishable
 Barbara Merriweather – Category Manager,
Local/DSD
 Bridegt Bennett – HQ Produce Specialist
Promotions
 Total items published reduced 21%
• Dollar Sales Per SKU + 5%
• Units Per SKU + 7%
 Increase Pallets/Shippers
 Incorporate Club Packs
• Averaging $6.8 million per month
• $2 million per month increase
 Seasonal Programs + $9 million
Front End Racks
 Fixtures have been selected
 Currently
• Developing stock assortment
• Surveying stores select type of fixtures
 60 days to manufacture equipment
 Phased implementation - September
Check It Out
 Shoppers choosing self-checkout:
• Wal-Mart (45%)
• Kroger (43%)
• Target (40%)
• Publix (28%)
• Costco (26%)
• Whole Foods (14%)
• Safeway (13%)
• Meijer (11%)
• Albertson’s (11%).
Space Allocation – Bragg North
 Today little variance in plan-o-grams
• Based on historic sales data
• Sets based on class of store
• No factor for lost sales or promoted volume
 Reduce space in declining categories
• Fewer items = IN STOCK
 Reconfigure flow to maximize allocation
efficiencies
Organic Options
 Organic food sales represent just 2.5%
 Organics grew 30% in 2007
 Grown roughly 20% per year for past five years
 Grocery annual sales grew 3–5% overall
 Organic food sales predicted to double as early
as 2009
 Organic offerings in personal care, nutritional
supplements, household cleaners, and pet food
Focused on “Green” Efforts
 Sales of Bar Coded Organic Products
• # Items up 17% in last 12 months (June-May) – from 540 to 635
• Sales for June-May period up 35% over prior year to 34.4 m
 Environmental Initiatives Reusable grocery bags sold
starting 10/30/2007
• 1,252,864 sold thru 06/23/2008
 Compact fluorescent light (CFL) bulbs, FY 08 Goal:
1 Million
• 878,105 sold FYTD – thru 06/23/2008
Expand Benefit - Access G/R
 Developing staff office for support
 Serve as single POC for store support
• Logistics
• Communication
• Transportation
• Equipment
 Develop “Virtual Solution”
• Internet ordering – on site payment
• Develop total solution to include payment
• Expand – self fulfillment
Retail Perspective
 Consumers are plugged into technology
 Logging on to plan trips search for restaurants
and socialize
 Top 15 web domains
• eBay.com, 1st
• Amazon.com, 5th
• Target.com, 12th
• Wal-Mart.com, 15th
Thank You!
Ms. Michelle Frost
Chief, Semi-Perishables