Nearby, Arizona (Multi-Store Operator)
Owner wants a change of direction to combat Safeway better. Owner states that Safeway has a new manager that is ‘doing a better job’ than the old one, and that they (owner) are losing sales. He is out of fresh ideas, and needs JWC to provide some new ones. Although sales are diminishing slowly, he is having a hard time getting HIS local manager motivated (manager has been a long-time employee) to combat what he says as a much improved competitor.
Owner is concerned about ‘gross’ starting to suffer soon. Wants to relaunch ‘this store’ with a new approach, and prior to his lease renewal. Equipment is in good shape (has rack system), décor is ‘fair’. This store has always been a ‘good producer’, and would hate to let it slip away.
Store Size: 16,325 sq. ft.
Average Weekly Sales: $81,225
Checkouts: 5 NCR
Parking Spaces: 40, 1 handicap
Lease: 5,750 mo., Triple-Net, CAM
Debt: $116,311 (3,420 mo.)
Family: None in store, all at office-35mi away. (1 son-31, daughter-34, son’s wife-30)
Advertising: Self-Generated, 8-page stretch tab, direct mail, No TV, No Paper, No Social Med
Competitors: Safeway, Fry’s, Unified Independents, Box Store, Dollar General, Dollar Tree
- JWC arrived at corporate office Monday at 7:00am to meet Owner, son, and daughter
- Meeting went long, kids were emotional about ‘things’, i.e. worried about future
- JWC assured owner and kids, that things will be fine-we just have some work to do
- JWC drove to target store, about 30 minutes away, met with Manager from 10-11am
- Manager states his position and concerns with new and improved Safeway, in his opinions-what must be changed, and his ‘budget’ constraints. JWC thinks manager is feeling alienated…and without support to keep store viable.
- JWC met with all department managers from 12:00-1:00pm, to get input/feedback
- JWC visits Safeway (no hassles), Dollar Tree, and the Unified Independent
- JWC does Store Evaluation from 2:30-5:00pm, left 11-page list, could’ve been 25 pages
- JWC requests dinner meeting with Owner, Son, and Store Manager for 7:00pm, all attend
- JWC discusses findings in ‘project store’, findings and strengths at competing stores, and possible opportunities to regain lost sales, improve center store, improve weekly ad, and place this store in a position to average $100,000 weekly. Plenty of potential.
- JWC requests that son, join manager during the project, then begin calling on this store a minimum of 3 times weekly. This will be necessary, to see changes through-and eventually implement changes into the other locations. This will also support manager, who has been feeling a bit ‘unappreciated’. We need to build a team here, and the Son needs to get out of the office more, and in the stores. YOU CANNOT RUN THE STORES FROM THE OFFICE!!
- JWC designs, with warehouse artist help, a new 4-page weekly ad, and a monthly in-store handout to highlight “roller” program, new items, and some EDLP’s. Overall this will be a weekly savings of significance. New ad should not increase ad markdown, will provide new look, and reflect store strengths a bit more. In-store merchandising will be a key, as the new ad must be reflective of the store. All stores will stop direct mail, and re-kindle relationships with their local newspapers, who will provide us ‘FREE’ stories about the changes. Giving us a ’boost”.
- Will engage ad department, for copy/paste ad for Facebook and E-Mail Ad list (NEW)
- JWC implements a new weekly merchandising plan for end-caps, lobby, and island displays. Trains manager and son, on how to use.
- JWC implements new signage program storewide, to fit new ad-highlight EDLP items-and attempt to gain an increase in average customer transaction.
- Altered pricing scheme on Meat market (after cutting tests). JWC also recommends to owner that they abandon Commercial Grade beef, and go to a Pre-Trim Select program. This alone, is sending Safeway many customers, quality is not dependable. Implemented Chill-Pack fryer program-and set up Inventory/Order sheets for personnel. Altered smoked meats set for the season. Test scan department, had 56 errors.
- Altered pricing scheme in Produce Department. GREAT Produce guy, just needs some training…by far the best department in the store. Some minor set adjustments, and implemented a weekly and seasonal display plan for department to follow. Test scanned department, had 9 errors…mostly all ad on/off…adjusted his test scan procedure.
- Manager and son will complete a price-check of the TOP 150 at each competitor over the next two weeks. JWC and owner (will discuss adjustments and move forward). JWC recommends that son start being groomed to take over pricing-IF owner is committed to keeping son out of the office, and in the stores.
- Scheduled parking lot to get sealed and striped next week. Landlord will share in this expense. JWC recommends that lot be reconfigured to 36 spaces, 4 handicap spaces, and 1 for Employee-of-the Month! (New program to build morale)
- Scheduled (4) new vendors to be bought direct, to begin addressing variety issues-but also some ‘value merchandise’ issues within the store. Private label program is fair, but we must address ‘value shopper’ immediately. They aren’t shopping with us now, at all. Store manager was put in charge of this, and his enthusiasm ‘soared’…’Something new to do”. JWC set up items, pricing strategy, and set diagrams.
- Had final walk-though with owner, son, and manager Thursday afternoon. Owner pleased with new direction, and talks of possible re-merchandise of all stores in the Fall, prior to the holidays. Will contact JWC to schedule.
- Son and Manager will call JWC weekly and/or skype for the next (3) months to follow-up on changes.
- Friday morning had meeting with Owner, wife (first time meeting her), Son, Son’s wife and daughter. Discussed some corporate issues, evaluated statements-and made some suggestions.
- JWC trained Owner, Son, and Daughter on how to calculate break-even for sales, and with debt service. Discussed capital expenditures that are upcoming in the next few years.
- JWC visited the other 3 stores, Friday afternoon. Met managers, briefly discussed the project we completed, and the agreed changes they would be seeing soon. All seemed excited. Took pictures, walked stores, denoted competition.
Successful project. If this owner ‘stays the course’ and implements all the items we talked about, he will grow sales quickly. This operation is full of missed opportunities, such as: out of stocks on key items-due to poor ordering, not addressing the Hispanic demographic which is growing in his marketplace, playing the price game on meat-instead of the quality game- that housewives can count on. Produce is awesome, but needs some racks, fixtures-which are en-route to the store. Store was clean…and grocery sets were adequate, just boring. Once we re-merchandise private label a bit, add some ‘value-merchandise’ to their mix, and RE-SIGN with the new program…the center store will be awesome. Cost controls are fair, just had to adjust payroll dollars a bit. This is an ‘evening store’, and too many people are leaving at 5pm…we need more service and perishables coverage in the evenings.
The Safeway is a GOOD STORE! It has been freshly re-set, and they have their act together in there. Good weekly ad, skilled people, etc. With our addressing the meat quality, merchandising the weekly ad better, and adding some vendors…we will be fine in here. A good independent can do many things a ‘chain-store’ cannot, and we must exploit all of those opportunities here.
The owners have very little debt, love their business, and have two good kids to follow them. JWC envisions this store climbing to $100,000-110,000 weekly within a year or so. Look forward to helping this family in the future.
Retailer Costs* for 5 Day - Week Project
Day 1 (Sunday) Travel from El Paso, TX to Nearby, Arizona (1/2 day rate) 1,180.00
Day 2-6 (M-F) Weekly Rate (Overtime waived) 11,800.00
Day 7 (Saturday) No travel home 0.00
Total Fees $ 12,980.00
Automobile Charge (766mi x .75) 574.50
Hotel (Fairfield, 6 nights) 696.47
Meals (11-some eaten at store for free) 177.32
Supplies (Copies) 34.11
Total Expenses $ 1,482.40
Retailer signed 1-yr contract with JWC $ 3,300.00
(Pre-paid, Approximate 1-hr per month at $275.00 per month)
Owner wants 2-Day follow up, on-site, this Fall 2016. $ 4,720.00
(Pre-paid, will collect expenses on-site at end of project)
* Costs associated with this sample project are solely for demonstration purposes. Actual costs will vary by project. Please call for pricing, (915) 471-6155.