Hometown, Missouri (Single-Store Operator)

Project Scenario A – 1 Day Store Evaluation and Consultation

Owner requests store evaluation, 1 or 2 days (if necessary). Owner wants to increase sales (feels they are stale) and is willing to invest into a different ‘direction’. Owner states that ‘center store’ is dead/not growing. Owner states that perishables distributions are not growing, but gross profit percentages are holding…just not growing. States that his two sons’ (ages 29 and 25) need to work better with he and his wife, if they want a future in this business.

Wants an outside look from JWC (Joseph Welsh Consulting), for fresh ideas, and wants an honest evaluation of the store…no matter how bad or good. ‘Pull no punches please.’ Would like some on-going arrangement with JWC-to see any changes through, and to provide some guidance for his sons, as they grow in the business. Speaks of a possible re-merchandising/re-set of store after Labor Day.

Project Parameters

Store Size: 23,161 sq. ft.
Average Weekly Sales: $134,255
Checkouts: 6 plus 1 express
Parking Spaces: 62, 2 handicap
Lease: Owns Individually
Debt: None, Free and Clear
Family: Owner, Wife, 2 Sons (29,25)
Advertising: Warehouse Group, No Radio, No TV, No Newspaper, No Social Media, Handout
Competitors: Wal-Mart Supercenter, IGA, Thriftee, Dollar General, Local Guy Dollar Store

Evaluation

JWC arrived at store at 7:00am, met with owner and wife from 7:00-8:00am
JWC and both sons, visited all competitors, walked each store carefully (no hassles)
JWC met with entire family about initial impressions, competition strengths, personnel
Conversation continued on possible ideas, ways forward, and son’s dedication to store
JWC met with all managers (away from family) from 11-11:30am
JWC does store evaluation from 11:30-2:30pm. Store in ‘fair’ shape, left 15-pg list
JWC meets again with family at 2:30pm to discuss finding and actions necessary
Re-visited two competitors at 6:00pm. Wal-Mart and IGA to gauge traffic/preparedness
Re-walked the store with family at 7:15pm, to point out missed sales, closing duties beginning too early, and poor stock habits. (specials out on shelves-displays flush)
JWC left store for airport at 7:45pm

Action Taken

JWC suggests Buy-Sell Agreement between Owner, Wife, and Sons to provide continuity in the store-and give the sons further incentives. JWC will conference with Owner further
Planned Re-set for Fall 2016 (Will firm up early Summer)
Redesigned New Front-Page for Ad, stay with group-but just make some changes. Will start tracking weekly ad markdown (not being done), and begin merchandising AGAINST the ad, to ensure adequate gross profit
Altered Produce pricing scheme. TOO CHEAP, NO MULTIPLES, etc…disaster…
Sons will complete price check on Top 150, at each competitor within 2 weeks and report finding to owner and JWC for consultation and strategy meeting.
Altered some packaging in Fresh Meat Case, clearly the best market in trade area
Recommended Owner change parking to 56 standard parking spaces, 8 handicapped
Scheduled (4) new vendors to be bought direct, to address variety issues, possibly more once these are mastered
Recommended and Family accepted New Signage program to help Center Store
Will engage ‘Local Newspaper’ about insert rates and get back to JWC
Will engage Warehouse ad dept. for copy/paste ad for Facebook and E-mail ad’s

Conclusion.

Nice family, and the future is bright for these guys. Sons were feeling a bit unappreciated, but are both very strong managers…they just need some definition of what their individual duties are, and what is expected of them. We assigned them separate duties, one primarily will focus on operations (advertising, merchandising, buying, etc.), and the other will focus on financial part and automation (scan file, operating statement, accountability, etc.). Both are married and want to start families, and with a Buy-Sell Agreement in place, that will provide the comfort they need.

The owners are debt free, and own their real estate free and clear. Good financial situation, but will face some capital expenditures/major equipment costs in the next 3-5 years. JWC will work with the family to plan out these expenses and new equipment…and incorporate the changes into their upcoming re-merchandise/re-set of the store next fall.

Store is easily a $160,000-$175,000 per week store, with room to grow (will need the equipment upgrade). Staff is motivated, seem happy, and the key people have been there a long time. With the just a few changes, this store will be on its way. Clean, friendly, good facility…just missing some fundamentals.

Retailer Cost* for Store Evaluation

Consulting Fees:

Day 1 (Sunday)           Travel from El Paso, Tx to Hometown, Missouri (1/4 day rate) 590.00
Day 2 (Monday) Daily Rate (Overtime waived) 2,360.00
Day 3 (Tuesday) No travel home    0.00
Total Fees $   2,950.00

Expenses:

Airline Ticket, Coach Class-American Airlines 613.00
Cab to hotel 24.00
Hotel (La Quinta, 2 nights) 184.87
Meals (2-some eaten at store for free) 23.15
Supplies (Copies) 5.00
Total Expenses $ 850.02

Consulting Contract:

Retailer signed 1-yr contract with JWC $ 3,300.00
(Pre-paid, Approximate 1-hr per month at $275.00 per month)

Future:

Weekly Project ‘penciled-in’ for Sept 2016 to prepare for holidays. Owner
And JWC estimate 5-7 days work. Will firm up by 6/01.

* Costs associated with this sample project are solely for demonstration purposes. Actual costs will vary by project. Please call for pricing, (915) 471-6155.