Refresh, Remodel, New Stores
Refresh, Remodel, New Stores Terry Roberts President/Owner The Design Associates LLC est. 1994
Merchandising By Design Inc.
Refresh, Remodel, New Stores 10’ and Under In any economy, focusing budgets where they will provide the best ROI is essential. Learn how store planners are keeping capital costs down by putting their focus where consumers focus – at "10’& feet and under." Simplifying buildings, finishes & decor to provide focus on merchandising, traffic planning, fixtures and – what consumers notice – are key ingredients to refreshing, remodeling or building stores at lower costs.
Today’s Business Climate Where I’d Spend My First Dollar Refreshing Center Store Remodeling For Huge Sales Increase Best Interior Design -Independent New Store Spend Down-Not Trade Down On Trend Store Planning Check List
The Design Associates LLC/Merchandising By Design, Inc.
2
Developing Programs, Products & People
Prior to 1994, Terry Roberts was on staff with one of the industry's most distinguished leaders, Wegmans, for 12 years, working in many areas of operations, training, buying, management and store planning. During Terry’s tenure with Wegmans, of Rochester, NY, her positions included six years of project development and management in perishable departments, most notably on the development teams of the acclaimed Market Café, as well as six years in hard goods categories and visual merchandising. Terry came to Wegmans after 10 years with Rite Aid Pharmacies in positions ranging from store acquisitions and planning for 13 states, to senior training manager for upstate New York.
While it has no publicly traded stock, its operating margins are reportedly about 7.5% (the company will not disclose net margins), double what the big four grocers earn and higher even than hot natural-foods purveyor, Whole Foods. Wegmans sales per square foot are reportedly 50% higher than the $9.29 industry average….. Programming & Visual Merchandising
Merchandising By Design, Inc./The Design Associates
[email protected]
Wegmans….Brand Is Everything 10’ & Under Focused Experience & Convenience The #1 And #2 Reasons Why Consumers Remain Loyal To A Particular Retail Brand
DETAILED DESTINATION COMPARTMENTALIZED
There Is No Alternative To Experience The Design Associates LLC/Merchandising By Design, Inc.
4
Merchandising By Design, Inc.
New & Remodel Store Planning
Terry Roberts, president Over 30 Years Of Experience In Successful Store Planning, Design Projects & Positions For Supermarkets & Specialty Food Stores eatZi’s, Wegmans, Rite Aid, Thornton Quick Café’, SUPERVALU, Scott’s, bigg’s, Sunflower Markets, Cub, Delhaize, Dean & DeLuca Shell/Texaco, Genuardi’s/Zagara’s Campbell Soup Company…..
Est. 1994
AutoCAD Equipment Plans Interior Design Detailing Brand Development Fixture & Signage Specification Equipment Specification Sourcing Visual Merchandising Delivering Plans & Programs That Are…
Project Coordination W/Architects, Engineers, Suppliers, Contractors
ROI Focused Community Tailored Operationally Sound Flexible To Evolve Innovative & Progressive Interactive & Entertaining
Program & Product Development Food Service Planning & Handling Training & Training Materials Installation & On Site Support
There Is No Alternative To Experience Merchandising By Design, Inc. , 2633 Elmbrook Dr., Carrollton, Texas 75010 Phone (214)-883-5013 * Office Fax (972)307-3180 * [email protected]
There Is No
Alternative To Experience
AutoCAD Fixture & Equipment Plans
Marsh
Delhaize
bigg’s
Merchandising By Design, Inc. , 2633 Elmbrook Dr., Carrollton, Texas 75010 Phone (214)-883-5013 * Office Fax (972)307-3180 * [email protected]
S u p e r m a r k e t s
Convenience Stores
The Design Associates LLC/Merchandising By Design, Inc.
Convenience Stores
7
The Urban Niche Market
"Improving sales, profits and ROI was made possible by utilizing the experience and talents of The Design Associates professionals, in providing best in class programs, training and leadership development.“ Jerry Porricelli, President Porricelli's Markets The Design Associates LLC/Merchandising By Design, Inc.
8
Campbell’s Supplier View Of 10’ and Under Merchandising BRAND is EVERYTHING Décor $5.00 SF Store Planning By Terry Roberts & Dave Falt The Design Associates LLC The Design Associates LLC/Merchandising By Design, Inc.
Décor $5 SF
9
The Design Associates LLC/Merchandising By Design, Inc.
10
S HIFT HAPPENS
Dow Jones 9/2007-7/2010
H I F T
H A P P
82% Retail CFO’s Expect Ongoing Stagnation Is Most Likely
E
Another 9% Project A "Double-dip" Recession BDO USA 9-16-10
N S The Design Associates LLC/Merchandising By Design, Inc.
11
Succeeding in a Tough Economy A&P Safeway Winn Dixie
Store closings highlight struggles 4th qtr 2009 net loss $1.6 billion 2nd qtr earnings ending 1/2010 slid 87%
On the other hand………………. Family Dollar Costco Wakefern
Q2 2009 profits up 33.3% Q2 net income up 25% 2009 sales up 10.4% Willard Bishop Competitive Edge 3/2010
The Design Associates LLC/Merchandising By Design, Inc.
12
2009 Dollar Sales
Traditional Grocery Fresh Format Limited Assortment Super Whse Small Grocery C-Stores(food) Non-Trad. Grocery Supercenters Wholesale Clubs Dollar Stores
+0.9% +1.9% +6.2% +1.2 +0.9% +0.2% +4.8% +7.8% -0.4% +16.8%
SKU’S
45,500 30,000 1,400 36,000 3,000 3,000 25,000 100,000 5,100 5,400 Willard Bishop June 2010
The Design Associates LLC/Merchandising By Design, Inc.
13
Really!
That Explains Everything!
By 2014 Grocery Market Share -3.5%
Walgreen spokeswoman confirmed the test and said the fresh food initiative could help the drugstore chain be eventually seen as "destination for tonight's meal." Dow Jones News Wire 7/2010
Traditional Grocery expected annual growth
0.2%
Limited Assortment expected annual growth
6.5%
Fresh Format expected annual growth
1.7%
Supercenters expected annual growth
7%
Dollar and Wholesale
2.8%
The Design Associates LLC/Merchandising By Design, Inc.
The Future Of Food Retailing Report
15
Recession Fundamentals Price Impact
Traditional Limited Asst.
Dollar
Drug Store
C-Store
Super Whse. Club
Fresh Small Grocery
10
Despite efforts by Cstores to become more female-friendly with brighter lighting, cleaner facilities and more prepared foods, women find it easy to resist their charms. 84% of women do not shop in convenience stores more now than they did two years ago….. SupermarketGuru.com
55% of Consumers Will Shop At Least 3X Channels On A Weekly Basis Looking For VALUE The Design Associates LLC/Merchandising By Design, Inc.
SymphonyIRI Group
16
“Economic Sobriety” Formats Must Constantly Evolve
Now Less Than Two Years Before We See Sales Declines!
“With debt-riddled Americans saving more, earning less and unable to use their devalued homes as piggybanks, experts … see no return to the Go-Go days of consumption” The Design Associates LLC/Merchandising By Design, Inc.
17
Bill Lucas, group president, NPD Group.
Defensive vs. Offensive Remodels Changing consumer needs Policy/time Competition Other
30.6% 36.1% 19.4% 13.9%
“In the midst of the worst economy in decades it is especially important to keep a finger on the pulse of consumers” FMI Facts About Store Development 2008 The Design Associates LLC/Merchandising By Design, Inc.
18
Changing The World Today self-service remains one of the Top 10 Ideas that are
The Design Associates LLC/Merchandising By Design, Inc.
changing the world…
19
Consumer’s Expectations for Self-Service… Buying Fuel via pay-at-the-pump
Performing Banking Operations at ATM
Buying Groceries at Self Checkout
Checking in at Hotel, Airport or Rental Car
Checking in at Day-Care
IBM Survey of over 1,000 consumers: 69% indicate they expect more and more businesses to offer a self service option 52% indicate they are very comfortable using self service technology Roughly 50% indicate their usage of self service devices has gone up over the past year Over 33% of consumers would like additional resources available to them while they shop Only 4% of consumers indicate they are not using automated devices/kiosks
Printing Photos Guided Selling in Retail Checking in and Accessing Monitoring for The Design Associates LLC/Merchandising By Design, Inc. Government Healthcare Services
Quick SelfOrder Gaming and Entertainment
20
2 Out of 3 Consumers Acknowledge Speed & Convenience of Self-Checkout 68% site speed or convenience as the single most important reason they use the SCS lane
IBM Institute for Business Value “Consumer Advocacy” survey and study, 1/2009. The Design Associates LLC/Merchandising By Design, Inc.
21
Reduce Costs, Improve Sales And Boost Customer Loyalty Deli Express Order Kiosk 20-25% of sales $ thru kiosk/ Avg $6-$8 Two sided refrigerator unit to hold orders Assign clerk for peak hours “Huge opportunity in additional sales from customers who would not wait if the deli is busy and the productivity improvement is worth 1.5% of deli payroll” The Design Associates LLC/Merchandising By Design, Inc.
22
Make Really Tough Decisions Coffee Bars Floral Tortilla Factory HBC Furniture Juice Bars Dining Areas …………..
How Well Do Categories Really Perform? The Design Associates LLC/Merchandising By Design, Inc.
23
Defensive-Center Store Refresh Total Center Store Refresh $230,000 $100,000: Equipment, fixtures, labor (add in lost sales and loss from markdowns) Assumption: store sales $500,000 week
Typical center store generates 3% lift in sales Recover investment in approx. 7 months Willard Bishop optimization work The Design Associates LLC/Merchandising By Design, Inc.
24
“Absolutely True” John Domino, former SVP SuperValu, DSG
First dollars in:
Clean store (and coat of paint) Refresh/reset center store Re-lamp and/or upgrade lighting New/add refrigeration (dairy, frozen, prepared foods)
Last dollars in:
Payback 1-2 years Payback Negative
Deli, bakery remodels
Average remodel $3.5m (loss sales/markdowns $3.7m Average sustainable sales lift 7% Sales volume $500,000 expect to recover investment in 7 years Willard Bishop Competitive Edge 7/2010 The Design Associates LLC/Merchandising By Design, Inc.
25
Suppliers Step Up Shelf Sets
Campbell’s Shelf Refresh Really Is:
Maximizer
New Product and Right Products Relevant Assortment The Design Associates LLC/Merchandising By Design, Inc.
26
Lighting Innovation 100% LED-interior and exterior. Amerlux LED 50,000 hour life at 70% of initial output, no projected heat, very low UV emission, output close to ceramic metal halide.
Just a few degrees in temperature rise on the surface of a seafood display can increase the growth of bacteria exponentially. The Design Associates LLC/Merchandising By Design, Inc.
27
Destination-Center Store You Don’t Lose A Sale…You Lose An Entire Trip The Design Associates LLC/Merchandising By Design, Inc.
28
Companies Like Wegmans Place Nonfoods Squarely In Center Store Stemware Dessert plates Tea Pot Pasta bowl Serving bowls Drinking glasses
With Amazing Buying &
Meat thermometer Salad tongs Casserole dish Gifts:
Merchandising
Placemats/napkins Aprons Serving spoons
The Design Associates LLC/Merchandising By Design, Inc.
Wood cheese board
29
Adjacencies
S HIFT HAPPENS
Transitions
H
Flexibility
I F
Meat
T
Nat/Org Cheese Cards
Juice Bar
Kitchen Shop
HBC
A P
RX
RX
Prod. Prep
Wine Deli
H
P
Seafood
Prepared Quick Cafe
Produce
Coffee Bar
Frozen Floral
E
Bakery
N S
65,000 SF Fresh Prototype Merchandising By Design, Inc. , 2633 Elmbrook Dr., Carrollton, Texas 75010 The Design Associates LLC/Merchandising By Design, Inc. Phone (214)-883-5013 * Office Fax (972)307-3180 * [email protected]
30
25% Increase In Need For Refrigeration In The Last 5 Years Dairy dramatically outpaces other departments with new product introductions 91% of all households buy fluid milk One of every two trips is a quick trip and 40% off all trips to the store include a dairy purchase
The Design Associates LLC/Merchandising By Design, Inc.
31
Establish A Destination Dairy Department Deliver Stronger Fresh Statement Merchandise To Health & Wellness
The Design Associates LLC/Merchandising By Design, Inc.
32
Refrigeration Innovation
Superior Merchandising Up to 84% Annual Energy Savings Up to 35% More Facings Up to 25% More Pack-out Zero Zone
The Design Associates LLC/Merchandising By Design, Inc.
33
Going Green & Merchandising Innovation
Barker Specialty Products
“Coolgenix”™ Hill Phoenix Minimize refrigerants Reduce leaks Secondary refrigeration -med temp C02 (testing in 2-3 stores -low temp) LED case lighting (w/motion sensors) Retrofit door kits Superior Focus on Perishable Merchandising The Design Associates LLC/Merchandising By Design, Inc.
34
Offensive & Defensive Remodel $
140,000.00
5.7% Lighting
$
930,000.00
38.4% Refrigeration
$
280,000.00
11.5% Equip/Perishables
$
40,000.00
1.6% Shelving/ends/floral
$
390,000.00
16.0% Checkouts/Tech/Sec
$
650,000.00
26.8% Const/Paint/Tile/decor PRICE &
$
2,430,000.00
VOLUME DRIVEN WITH
(same cost as 2007 FMI Store Facts) The Design Associates LLC/Merchandising By Design, Inc.
w/SERVICE DEPARTMENTS 35
Converting Cash To Contribution Before remodel $325k/wk
NOW $625k/wk +
Entire Remodel 6 Weeks $2.4m renovation The Design Associates LLC/Merchandising By Design, Inc.
Conventional Nat. Retailer
36
Destinations Deliver “Center storeOn center Center store (grocery/dairy/FF/HBC/ store applications or Nonfoods is 62% remodels we had of store sales (note storeshops is next to placedthis Kitchen Walmart so HBC/Nonfoods is into another site and impacted). had 60% sales lift in these categories. On center store remodels, we placed Kitchen shops into the stores and see a 60% sales lift in these categories. ”
Spend Enough To Make a Difference The Design Associates LLC/Merchandising By Design, Inc.
37
Merchandising Flexibility Increases Profits
Day Part Day Of Week Seasonally Control Labor, Shrink, Profits Flexible Merchandising & Multifunctional Fixtures
The Design Associates LLC/Merchandising By Design, Inc.
38
Flexibility & Destination The Design Associates LLC/Merchandising By Design, Inc.
39
Promise *Dedication * Obligation The “P’s” Innovative Products New Programs Hired 175 People Solid brand Promise
Train, train and train again! The Design Associates LLC/Merchandising By Design, Inc.
40
No right… No wrong… Unless it’s half
The Design Associates LLC/Merchandising By Design, Inc.
ed.
41
Best Interior Design
Progressive Grocer
Dave’s Fresh Marketplace
Store Planning By Dave Falt
The Design Associates LLC/Merchandising By Design, Inc.
Creative Custom Design (Bozzuto’s, Inc)
42
Independent-Thinking Outside & Re-Use of The Big Box Dave’s Fresh Marketplace Opens in former Linens ‘n Things
Smithfield Crossing Lifestyle Shopping Center 36,000 SF Avg. $500,000 $5.25 m/$150 SF
The Design Associates LLC/Merchandising By Design, Inc.
$5.25M ($150 SF)43 Equipment $1.5m
Quonset 24,000 SF
Dave’s Fresh Marketplace New-Ground Up $ 4.2m/$170 SF
$4.2m ($170 SF) Perishable Fresh Focus Shopping Experience & Merchandising Is Paramount Destination Departments
The Design Associates LLC/Merchandising By Design, Inc.
Equipment
$1.75m
Décor
$ 11/SF 44
Offensive Merchandising
“Services and programs decisions are an offensive move to capture high end consumer left with little choice in the competitive market.” The Design Associates LLC/Merchandising By Design, Inc.
45
Prep-Foods 5% Deli
Seafood Bakery
5%
5%
10%
1 2 3
Produce
15%
Grocery
29%
4 5 6
Meat
15%
7 Dairy
16%
8
Fresh Format Business Model The very best in meat, produce, prepared foods, cheeses, baked goods, gourmet and local products. The Design Associates LLC/Merchandising By Design, Inc.
46
Fighting For Neighborhoods
Right Sizing Right Spending
“Working With Smaller Footprints, Reduces Risk”
The Design Associates LLC/Merchandising By Design, Inc.
47
New Store- New Approach Requirements For New Site
Main Format Modifications
Reduce building costs
Minimal architectural detailing
Focus on what customers really notice
Eliminate drop ceilings Use all fluorescent lighting
Keep the theatre and services Easier maintenance
Eliminate hard walls where possible
Lower energy costs
Eliminate hard tiles
Increase ROI
Focus on merchandising
SAVINGS $350,000 $7.00 SF 50,000 SF The Design Associates LLC/Merchandising By Design, Inc.
48
“Peeling Back The Onion” Brick façade, metal sheeting sides (savings $200,000) Fabric awnings vs. metal ($45,000) Mark etp
lace
Eliminate sky lights & transom windows The Design Associates LLC/Merchandising By Design, Inc.
49
Spend Down-Not Trade Down Power poles vs. underground wiring for front end ($25,000 per renovation)
Tile vs. Epoxy vs. Seal Concrete ($12,000 savings)
Stainless steel column covers end 4’ above finished floor ( $6,000) The Design Associates LLC/Merchandising By Design, Inc.
50
10’ & Under Focus on Merchandising Remove Bulkhead over meat sales ($3,800 savings) Remove lighting over bunkers ($15,000 savings)
Expose cooler panels, eliminate tile ($3,000
savings)
The Design Associates LLC/Merchandising By Design, Inc.
51
The Design Associates LLC/Merchandising By Design, Inc.
52
Focus 10’ & Under
Brand Is Everything Make Offensive Moves “Refresh” At Least Every 2 Years Make REALLY Tough Decisions Make Destination Departments Spend Down, Don’t Trade Down Minimize Expense On Buildings Focus: Where/What Customer’s Really See “P’s”- Promise, Programs, Products, People
The Design Associates LLC/Merchandising By Design, Inc.
53
S HIFT HAPPENS H
Labor Management Loyalty Systems Price Optimization Business Intelligence Loss Prevention
I
SN, 10/09
F T
Convenience Personal Service
H A P P E N S
Communication
Technology
Coupon/Discount
Self Service
Kiosks
Health & Wellness
Customizing/My Way
Fresh & Quality
Dining In
“Green”-Sustainability
Food Safety
Premium Private Label
Employee Services
Simplified Assortments
Merchandising Focused - 10’ & Under
Thank You & Thanks To The Many “Researchers” Providing Data, Information And Photo’s “To steal ideas from one person is plagiarism; to steal from many is research” Steven Wright, the famous erudite scientist (comedian)
Terry Roberts Supermarket & Fresh Food Store Planning & Design Retail Business-Program Development & Training There Is No Alternative To Experience Merchandising By Design, Inc. , 2633 Elmbrook Dr., Carrollton, Texas 75010 Phone (214)-883-5013 * Office Fax (972)307-3180 * [email protected] * www.thedesignassociatesllc.com
Merchandising By Design Inc.
Refresh, Remodel, New Stores 10’ and Under In any economy, focusing budgets where they will provide the best ROI is essential. Learn how store planners are keeping capital costs down by putting their focus where consumers focus – at "10’& feet and under." Simplifying buildings, finishes & decor to provide focus on merchandising, traffic planning, fixtures and – what consumers notice – are key ingredients to refreshing, remodeling or building stores at lower costs.
Today’s Business Climate Where I’d Spend My First Dollar Refreshing Center Store Remodeling For Huge Sales Increase Best Interior Design -Independent New Store Spend Down-Not Trade Down On Trend Store Planning Check List
The Design Associates LLC/Merchandising By Design, Inc.
2
Developing Programs, Products & People
Prior to 1994, Terry Roberts was on staff with one of the industry's most distinguished leaders, Wegmans, for 12 years, working in many areas of operations, training, buying, management and store planning. During Terry’s tenure with Wegmans, of Rochester, NY, her positions included six years of project development and management in perishable departments, most notably on the development teams of the acclaimed Market Café, as well as six years in hard goods categories and visual merchandising. Terry came to Wegmans after 10 years with Rite Aid Pharmacies in positions ranging from store acquisitions and planning for 13 states, to senior training manager for upstate New York.
While it has no publicly traded stock, its operating margins are reportedly about 7.5% (the company will not disclose net margins), double what the big four grocers earn and higher even than hot natural-foods purveyor, Whole Foods. Wegmans sales per square foot are reportedly 50% higher than the $9.29 industry average….. Programming & Visual Merchandising
Merchandising By Design, Inc./The Design Associates
[email protected]
Wegmans….Brand Is Everything 10’ & Under Focused Experience & Convenience The #1 And #2 Reasons Why Consumers Remain Loyal To A Particular Retail Brand
DETAILED DESTINATION COMPARTMENTALIZED
There Is No Alternative To Experience The Design Associates LLC/Merchandising By Design, Inc.
4
Merchandising By Design, Inc.
New & Remodel Store Planning
Terry Roberts, president Over 30 Years Of Experience In Successful Store Planning, Design Projects & Positions For Supermarkets & Specialty Food Stores eatZi’s, Wegmans, Rite Aid, Thornton Quick Café’, SUPERVALU, Scott’s, bigg’s, Sunflower Markets, Cub, Delhaize, Dean & DeLuca Shell/Texaco, Genuardi’s/Zagara’s Campbell Soup Company…..
Est. 1994
AutoCAD Equipment Plans Interior Design Detailing Brand Development Fixture & Signage Specification Equipment Specification Sourcing Visual Merchandising Delivering Plans & Programs That Are…
Project Coordination W/Architects, Engineers, Suppliers, Contractors
ROI Focused Community Tailored Operationally Sound Flexible To Evolve Innovative & Progressive Interactive & Entertaining
Program & Product Development Food Service Planning & Handling Training & Training Materials Installation & On Site Support
There Is No Alternative To Experience Merchandising By Design, Inc. , 2633 Elmbrook Dr., Carrollton, Texas 75010 Phone (214)-883-5013 * Office Fax (972)307-3180 * [email protected]
There Is No
Alternative To Experience
AutoCAD Fixture & Equipment Plans
Marsh
Delhaize
bigg’s
Merchandising By Design, Inc. , 2633 Elmbrook Dr., Carrollton, Texas 75010 Phone (214)-883-5013 * Office Fax (972)307-3180 * [email protected]
S u p e r m a r k e t s
Convenience Stores
The Design Associates LLC/Merchandising By Design, Inc.
Convenience Stores
7
The Urban Niche Market
"Improving sales, profits and ROI was made possible by utilizing the experience and talents of The Design Associates professionals, in providing best in class programs, training and leadership development.“ Jerry Porricelli, President Porricelli's Markets The Design Associates LLC/Merchandising By Design, Inc.
8
Campbell’s Supplier View Of 10’ and Under Merchandising BRAND is EVERYTHING Décor $5.00 SF Store Planning By Terry Roberts & Dave Falt The Design Associates LLC The Design Associates LLC/Merchandising By Design, Inc.
Décor $5 SF
9
The Design Associates LLC/Merchandising By Design, Inc.
10
S HIFT HAPPENS
Dow Jones 9/2007-7/2010
H I F T
H A P P
82% Retail CFO’s Expect Ongoing Stagnation Is Most Likely
E
Another 9% Project A "Double-dip" Recession BDO USA 9-16-10
N S The Design Associates LLC/Merchandising By Design, Inc.
11
Succeeding in a Tough Economy A&P Safeway Winn Dixie
Store closings highlight struggles 4th qtr 2009 net loss $1.6 billion 2nd qtr earnings ending 1/2010 slid 87%
On the other hand………………. Family Dollar Costco Wakefern
Q2 2009 profits up 33.3% Q2 net income up 25% 2009 sales up 10.4% Willard Bishop Competitive Edge 3/2010
The Design Associates LLC/Merchandising By Design, Inc.
12
2009 Dollar Sales
Traditional Grocery Fresh Format Limited Assortment Super Whse Small Grocery C-Stores(food) Non-Trad. Grocery Supercenters Wholesale Clubs Dollar Stores
+0.9% +1.9% +6.2% +1.2 +0.9% +0.2% +4.8% +7.8% -0.4% +16.8%
SKU’S
45,500 30,000 1,400 36,000 3,000 3,000 25,000 100,000 5,100 5,400 Willard Bishop June 2010
The Design Associates LLC/Merchandising By Design, Inc.
13
Really!
That Explains Everything!
By 2014 Grocery Market Share -3.5%
Walgreen spokeswoman confirmed the test and said the fresh food initiative could help the drugstore chain be eventually seen as "destination for tonight's meal." Dow Jones News Wire 7/2010
Traditional Grocery expected annual growth
0.2%
Limited Assortment expected annual growth
6.5%
Fresh Format expected annual growth
1.7%
Supercenters expected annual growth
7%
Dollar and Wholesale
2.8%
The Design Associates LLC/Merchandising By Design, Inc.
The Future Of Food Retailing Report
15
Recession Fundamentals Price Impact
Traditional Limited Asst.
Dollar
Drug Store
C-Store
Super Whse. Club
Fresh Small Grocery
10
Despite efforts by Cstores to become more female-friendly with brighter lighting, cleaner facilities and more prepared foods, women find it easy to resist their charms. 84% of women do not shop in convenience stores more now than they did two years ago….. SupermarketGuru.com
55% of Consumers Will Shop At Least 3X Channels On A Weekly Basis Looking For VALUE The Design Associates LLC/Merchandising By Design, Inc.
SymphonyIRI Group
16
“Economic Sobriety” Formats Must Constantly Evolve
Now Less Than Two Years Before We See Sales Declines!
“With debt-riddled Americans saving more, earning less and unable to use their devalued homes as piggybanks, experts … see no return to the Go-Go days of consumption” The Design Associates LLC/Merchandising By Design, Inc.
17
Bill Lucas, group president, NPD Group.
Defensive vs. Offensive Remodels Changing consumer needs Policy/time Competition Other
30.6% 36.1% 19.4% 13.9%
“In the midst of the worst economy in decades it is especially important to keep a finger on the pulse of consumers” FMI Facts About Store Development 2008 The Design Associates LLC/Merchandising By Design, Inc.
18
Changing The World Today self-service remains one of the Top 10 Ideas that are
The Design Associates LLC/Merchandising By Design, Inc.
changing the world…
19
Consumer’s Expectations for Self-Service… Buying Fuel via pay-at-the-pump
Performing Banking Operations at ATM
Buying Groceries at Self Checkout
Checking in at Hotel, Airport or Rental Car
Checking in at Day-Care
IBM Survey of over 1,000 consumers: 69% indicate they expect more and more businesses to offer a self service option 52% indicate they are very comfortable using self service technology Roughly 50% indicate their usage of self service devices has gone up over the past year Over 33% of consumers would like additional resources available to them while they shop Only 4% of consumers indicate they are not using automated devices/kiosks
Printing Photos Guided Selling in Retail Checking in and Accessing Monitoring for The Design Associates LLC/Merchandising By Design, Inc. Government Healthcare Services
Quick SelfOrder Gaming and Entertainment
20
2 Out of 3 Consumers Acknowledge Speed & Convenience of Self-Checkout 68% site speed or convenience as the single most important reason they use the SCS lane
IBM Institute for Business Value “Consumer Advocacy” survey and study, 1/2009. The Design Associates LLC/Merchandising By Design, Inc.
21
Reduce Costs, Improve Sales And Boost Customer Loyalty Deli Express Order Kiosk 20-25% of sales $ thru kiosk/ Avg $6-$8 Two sided refrigerator unit to hold orders Assign clerk for peak hours “Huge opportunity in additional sales from customers who would not wait if the deli is busy and the productivity improvement is worth 1.5% of deli payroll” The Design Associates LLC/Merchandising By Design, Inc.
22
Make Really Tough Decisions Coffee Bars Floral Tortilla Factory HBC Furniture Juice Bars Dining Areas …………..
How Well Do Categories Really Perform? The Design Associates LLC/Merchandising By Design, Inc.
23
Defensive-Center Store Refresh Total Center Store Refresh $230,000 $100,000: Equipment, fixtures, labor (add in lost sales and loss from markdowns) Assumption: store sales $500,000 week
Typical center store generates 3% lift in sales Recover investment in approx. 7 months Willard Bishop optimization work The Design Associates LLC/Merchandising By Design, Inc.
24
“Absolutely True” John Domino, former SVP SuperValu, DSG
First dollars in:
Clean store (and coat of paint) Refresh/reset center store Re-lamp and/or upgrade lighting New/add refrigeration (dairy, frozen, prepared foods)
Last dollars in:
Payback 1-2 years Payback Negative
Deli, bakery remodels
Average remodel $3.5m (loss sales/markdowns $3.7m Average sustainable sales lift 7% Sales volume $500,000 expect to recover investment in 7 years Willard Bishop Competitive Edge 7/2010 The Design Associates LLC/Merchandising By Design, Inc.
25
Suppliers Step Up Shelf Sets
Campbell’s Shelf Refresh Really Is:
Maximizer
New Product and Right Products Relevant Assortment The Design Associates LLC/Merchandising By Design, Inc.
26
Lighting Innovation 100% LED-interior and exterior. Amerlux LED 50,000 hour life at 70% of initial output, no projected heat, very low UV emission, output close to ceramic metal halide.
Just a few degrees in temperature rise on the surface of a seafood display can increase the growth of bacteria exponentially. The Design Associates LLC/Merchandising By Design, Inc.
27
Destination-Center Store You Don’t Lose A Sale…You Lose An Entire Trip The Design Associates LLC/Merchandising By Design, Inc.
28
Companies Like Wegmans Place Nonfoods Squarely In Center Store Stemware Dessert plates Tea Pot Pasta bowl Serving bowls Drinking glasses
With Amazing Buying &
Meat thermometer Salad tongs Casserole dish Gifts:
Merchandising
Placemats/napkins Aprons Serving spoons
The Design Associates LLC/Merchandising By Design, Inc.
Wood cheese board
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Adjacencies
S HIFT HAPPENS
Transitions
H
Flexibility
I F
Meat
T
Nat/Org Cheese Cards
Juice Bar
Kitchen Shop
HBC
A P
RX
RX
Prod. Prep
Wine Deli
H
P
Seafood
Prepared Quick Cafe
Produce
Coffee Bar
Frozen Floral
E
Bakery
N S
65,000 SF Fresh Prototype Merchandising By Design, Inc. , 2633 Elmbrook Dr., Carrollton, Texas 75010 The Design Associates LLC/Merchandising By Design, Inc. Phone (214)-883-5013 * Office Fax (972)307-3180 * [email protected]
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25% Increase In Need For Refrigeration In The Last 5 Years Dairy dramatically outpaces other departments with new product introductions 91% of all households buy fluid milk One of every two trips is a quick trip and 40% off all trips to the store include a dairy purchase
The Design Associates LLC/Merchandising By Design, Inc.
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Establish A Destination Dairy Department Deliver Stronger Fresh Statement Merchandise To Health & Wellness
The Design Associates LLC/Merchandising By Design, Inc.
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Refrigeration Innovation
Superior Merchandising Up to 84% Annual Energy Savings Up to 35% More Facings Up to 25% More Pack-out Zero Zone
The Design Associates LLC/Merchandising By Design, Inc.
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Going Green & Merchandising Innovation
Barker Specialty Products
“Coolgenix”™ Hill Phoenix Minimize refrigerants Reduce leaks Secondary refrigeration -med temp C02 (testing in 2-3 stores -low temp) LED case lighting (w/motion sensors) Retrofit door kits Superior Focus on Perishable Merchandising The Design Associates LLC/Merchandising By Design, Inc.
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Offensive & Defensive Remodel $
140,000.00
5.7% Lighting
$
930,000.00
38.4% Refrigeration
$
280,000.00
11.5% Equip/Perishables
$
40,000.00
1.6% Shelving/ends/floral
$
390,000.00
16.0% Checkouts/Tech/Sec
$
650,000.00
26.8% Const/Paint/Tile/decor PRICE &
$
2,430,000.00
VOLUME DRIVEN WITH
(same cost as 2007 FMI Store Facts) The Design Associates LLC/Merchandising By Design, Inc.
w/SERVICE DEPARTMENTS 35
Converting Cash To Contribution Before remodel $325k/wk
NOW $625k/wk +
Entire Remodel 6 Weeks $2.4m renovation The Design Associates LLC/Merchandising By Design, Inc.
Conventional Nat. Retailer
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Destinations Deliver “Center storeOn center Center store (grocery/dairy/FF/HBC/ store applications or Nonfoods is 62% remodels we had of store sales (note storeshops is next to placedthis Kitchen Walmart so HBC/Nonfoods is into another site and impacted). had 60% sales lift in these categories. On center store remodels, we placed Kitchen shops into the stores and see a 60% sales lift in these categories. ”
Spend Enough To Make a Difference The Design Associates LLC/Merchandising By Design, Inc.
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Merchandising Flexibility Increases Profits
Day Part Day Of Week Seasonally Control Labor, Shrink, Profits Flexible Merchandising & Multifunctional Fixtures
The Design Associates LLC/Merchandising By Design, Inc.
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Flexibility & Destination The Design Associates LLC/Merchandising By Design, Inc.
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Promise *Dedication * Obligation The “P’s” Innovative Products New Programs Hired 175 People Solid brand Promise
Train, train and train again! The Design Associates LLC/Merchandising By Design, Inc.
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No right… No wrong… Unless it’s half
The Design Associates LLC/Merchandising By Design, Inc.
ed.
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Best Interior Design
Progressive Grocer
Dave’s Fresh Marketplace
Store Planning By Dave Falt
The Design Associates LLC/Merchandising By Design, Inc.
Creative Custom Design (Bozzuto’s, Inc)
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Independent-Thinking Outside & Re-Use of The Big Box Dave’s Fresh Marketplace Opens in former Linens ‘n Things
Smithfield Crossing Lifestyle Shopping Center 36,000 SF Avg. $500,000 $5.25 m/$150 SF
The Design Associates LLC/Merchandising By Design, Inc.
$5.25M ($150 SF)43 Equipment $1.5m
Quonset 24,000 SF
Dave’s Fresh Marketplace New-Ground Up $ 4.2m/$170 SF
$4.2m ($170 SF) Perishable Fresh Focus Shopping Experience & Merchandising Is Paramount Destination Departments
The Design Associates LLC/Merchandising By Design, Inc.
Equipment
$1.75m
Décor
$ 11/SF 44
Offensive Merchandising
“Services and programs decisions are an offensive move to capture high end consumer left with little choice in the competitive market.” The Design Associates LLC/Merchandising By Design, Inc.
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Prep-Foods 5% Deli
Seafood Bakery
5%
5%
10%
1 2 3
Produce
15%
Grocery
29%
4 5 6
Meat
15%
7 Dairy
16%
8
Fresh Format Business Model The very best in meat, produce, prepared foods, cheeses, baked goods, gourmet and local products. The Design Associates LLC/Merchandising By Design, Inc.
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Fighting For Neighborhoods
Right Sizing Right Spending
“Working With Smaller Footprints, Reduces Risk”
The Design Associates LLC/Merchandising By Design, Inc.
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New Store- New Approach Requirements For New Site
Main Format Modifications
Reduce building costs
Minimal architectural detailing
Focus on what customers really notice
Eliminate drop ceilings Use all fluorescent lighting
Keep the theatre and services Easier maintenance
Eliminate hard walls where possible
Lower energy costs
Eliminate hard tiles
Increase ROI
Focus on merchandising
SAVINGS $350,000 $7.00 SF 50,000 SF The Design Associates LLC/Merchandising By Design, Inc.
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“Peeling Back The Onion” Brick façade, metal sheeting sides (savings $200,000) Fabric awnings vs. metal ($45,000) Mark etp
lace
Eliminate sky lights & transom windows The Design Associates LLC/Merchandising By Design, Inc.
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Spend Down-Not Trade Down Power poles vs. underground wiring for front end ($25,000 per renovation)
Tile vs. Epoxy vs. Seal Concrete ($12,000 savings)
Stainless steel column covers end 4’ above finished floor ( $6,000) The Design Associates LLC/Merchandising By Design, Inc.
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10’ & Under Focus on Merchandising Remove Bulkhead over meat sales ($3,800 savings) Remove lighting over bunkers ($15,000 savings)
Expose cooler panels, eliminate tile ($3,000
savings)
The Design Associates LLC/Merchandising By Design, Inc.
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The Design Associates LLC/Merchandising By Design, Inc.
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Focus 10’ & Under
Brand Is Everything Make Offensive Moves “Refresh” At Least Every 2 Years Make REALLY Tough Decisions Make Destination Departments Spend Down, Don’t Trade Down Minimize Expense On Buildings Focus: Where/What Customer’s Really See “P’s”- Promise, Programs, Products, People
The Design Associates LLC/Merchandising By Design, Inc.
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S HIFT HAPPENS H
Labor Management Loyalty Systems Price Optimization Business Intelligence Loss Prevention
I
SN, 10/09
F T
Convenience Personal Service
H A P P E N S
Communication
Technology
Coupon/Discount
Self Service
Kiosks
Health & Wellness
Customizing/My Way
Fresh & Quality
Dining In
“Green”-Sustainability
Food Safety
Premium Private Label
Employee Services
Simplified Assortments
Merchandising Focused - 10’ & Under
Thank You & Thanks To The Many “Researchers” Providing Data, Information And Photo’s “To steal ideas from one person is plagiarism; to steal from many is research” Steven Wright, the famous erudite scientist (comedian)
Terry Roberts Supermarket & Fresh Food Store Planning & Design Retail Business-Program Development & Training There Is No Alternative To Experience Merchandising By Design, Inc. , 2633 Elmbrook Dr., Carrollton, Texas 75010 Phone (214)-883-5013 * Office Fax (972)307-3180 * [email protected] * www.thedesignassociatesllc.com
