2009 Grocery Store SuperStudy
Plugging into the Profit Power of Eggs
December 2009
Dairy and Egg Financial Impact
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Financial Contributions –
Willard Bishop SuperStudy™ 2009
– Benefits
• Benchmarking visibility in to category profitability
• Enables keener category management and retail analysis by
factoring financial contributions in to recommendations; Yields
more informed decision making by incorporating bottom line
insights
– Definition
• Comprehensive total-store analysis that evaluates every item and
its financial performance
• Sales & space; Profitability & financial contribution
• SKU performance aggregated in to department, category and
subcategory reporting
2
Financial Contributions –
Willard Bishop SuperStudy™ 2009
– Methodology
• 52 weeks of retailer data: sales, cost of goods, cash discounts
• Retailer cost-to-serve (warehouse, transportation, and store
activity-based costs)
• Store visits to collect space and product handling practices (time
study)
• Product information including case packs, dimensions and
merchandising space
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Key Concepts
The SuperStudy P&L
– The fundamental result is an industry benchmark profit & loss
statement. All measures and emerging best practice analytics tie
back to these core metrics:
• Sales
• subtract Cost of Goods
• add Trade & Terms
• equals Adjusted Gross Profit (AGP)
• subtract Activity Based Costs (ABCs)
• equals True Profit (TP)
– Leverage insights against the profitability, or real cash contribution,
of sales
4
Dairy Department Overview
– The Dairy department contributes disproportionately to overall profits
Top 5 Grocery Departments
(Weekly Sales)
Dairy Share of
Total Store
5X its share of space!
16.9%
3X its share of space
10.2%
9.8%
3.1%
Share of
Sq Ft
Source: Willard Bishop 2009 Grocery SuperStudy™
Share of
Sales
Share of
AGP
Share of
TP
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Dairy Category Overview
– Eggs yield the highest True Margin of all Dairy categories, a result of
high turns, efficient use of space and low costs-to-serve
Eggs Share
of Dairy
8.7%
1.8X its share of space!
12.3%
9.5%
6.9%
Share
of Sq Ft
Source: Willard Bishop 2009 Grocery SuperStudy™
Share
of Sales
Share
of AGP
Share
of TP
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Sales
Average Weekly Sales Dollars Per SKU
– Very effective/efficient use of variety and assortment
$90.64
$62.65
$41.27
$39.98
$35.14
$32.74
$17.05
$16.05
Fluid Milk
Cheese
Source: Willard Bishop 2009 Grocery SuperStudy™
Refrigerated
Juice
Yogurt
Eggs
MargarineButter
Cultured
Refrigerated
Baking
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Sales
Average Weekly Unit Sales Per SKU
36.7
22.5
16.2
15.9
16.7
14.2
11.1
7.4
Fluid Milk
Cheese
Refrigerated
Juice
Source: Willard Bishop 2009 Grocery SuperStudy™
Yogurt
Eggs
MargarineButter
Cultured
Refrigerated
Baking
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Sales
81% of EGG SKUs are Making Money!
81.04%
80.58%
77.78%
73.60%
72.04%
69.04%
67.72%
56.88%
Fluid Milk
Cheese
Refrigerated
Juice
Source: Willard Bishop 2009 Grocery SuperStudy™
Yogurt
Eggs
MargarineButter
Cultured
Refrigerated
Baking
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Profitability
Weekly Profit Per Square Feet
– Overall Egg space delivers solid profit contributions in both
adjusted gross and true profits for the Dairy Department
$37.89
$34.68
$32.04
$31.42
$30.98
$25.09
$24.65
$21.02
$21.25
$18.87
$17.92
$18.52
$15.96
$7.20
$6.68
$4.21
Fluid Milk
Cheese
Refrigerated
Juice
Yogurt
Weekly AGP$ per Sq Ft
Source: Willard Bishop 2009 Grocery SuperStudy™
Eggs
MargarineButter
Cultured
Refrigerated
Baking
Weekly TP$ per Sq Ft
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Return on Inventory Investment
True Profit Return on Inventory Dollar
– Annual True Profit (gross profit plus trade spending less ABCs)
per dollar of inventory tied up on the shelf
$28.28
$25.15
$16.60
$15.21
$11.21
$11.07
$5.18
$4.92
Fluid Milk
Cheese
Refrigerated
Juice
Source: Willard Bishop 2009 Grocery SuperStudy™
Yogurt
Eggs
MargarineButter
Cultured
Refrigerated
Baking
11
Shelf Performance
High Turns Translates to Positive Cash Flow
– Great balance in low day of supply and high turns to drive
productivity (a product can’t make money just sitting on the
shelf)
Days of Supply
Average Turns per Year
94.0
11.9
11.1
70.1
7.9
68.8
55.4
6.6
46.2
5.3
5.2
Fluid
Milk
32.8
30.7
3.9
Cheese
Refrig.
Juice
Yogurt
Source: Willard Bishop 2009 Grocery SuperStudy™
Eggs
Marg./
Butter
Cultured
Fluid
Milk
Cheese
Refrig.
Juice
Yogurt
Eggs
Marg./
Butter
Cultured
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Space Performance
Average Weekly Sales Dollars/Sq. Ft. Facing
$118.89
$90.33
$81.66
$76.22
$78.36
$60.86
$53.42
$41.97
Fluid Milk
Cheese
Refrigerated
Juice
Source: Willard Bishop 2009 Grocery SuperStudy™
Yogurt
Eggs
MargarineButter
Cultured
Refrigerated
Baking
13
Space Performance
Average Weekly Profit Dollars/Sq. Ft. Facing
$37.89
$34.68
$32.04
$31.42
$30.98
$25.09
$24.65
$21.02
$21.25
$18.87
$17.92
$18.52
$15.96
$7.20
$6.68
$4.21
Fluid Milk
Cheese
Refrigerated
Juice
Yogurt
Adjusted Gross Profit per SFF
Source: Willard Bishop 2009 Grocery SuperStudy™
Eggs
MargarineButter
Cultured
Refrigerated
Baking
Weekly True Profit per SFF
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Space Performance
Profit Contribution Relative to Space and Sales
32% 33%
27%
21%
20%
Eggs represent
7% of Dairy
space but 11%
of True Profits!
21%
16%
14%
11%
11%
11%
7%
6%
8%
9%
5% 5%
4%
Fluid Milk
Cheese
Refrigerated
Juice
Share of SFF
Source: Willard Bishop 2009 Grocery SuperStudy™
Yogurt
7%
7% 7%
Eggs
Share of Sales
MargarineButter
6%
Cultured
4%
3%
Refrigerated
Baking
Share of TP
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Per Unit Performance
High True Profit per Unit Sold
Weekly Movement
True Profit per Unit
$1.00
8,000
$0.90
7,000
$0.80
6,000
$0.70
5,000
$0.60
$0.50
4,000
$0.40
3,000
$0.30
2,000
$0.20
1,000
$0.10
$0.00
0
Fluid Milk
Cheese
Refrigerated
Juice
Yogurt
TP per Unit Sold
Eggs
MargarineButter
Cultured
Refrigerated
Baking
Weekly Movement
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The incredible edible egg™
Summary of Egg Insights
– Strong Sales and Trends
– Versatile and Healthy are Core Consumer Benefits
– Extremely Profitable; Fast Turns; Space that Performs
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