Gravitec 2013
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Gravitec 2013. Top 10 US Retailers (USD, Billions). Source: Kantar Retail research and analysis. Note: US only, includes online and membership fee income. CLUB Business Model. Plus membership fees. Club Industry. U.S. Sales in Billions . Market Positions of Rivals. Pricesmart Inc. P.

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Gravitec 2013

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Gravitec 2013


Top 10 US Retailers (USD, Billions)

Source: Kantar Retail research and analysis

Note: US only, includes online and membership fee income


CLUB Business Model

Plus membership fees


Club Industry

U.S. Sales in Billions


Market Positions of Rivals

Pricesmart Inc.

P

Higher

Sam’sClub

Costco

Operating Margin

BJ’s

Lower

Few

Many

Number of Locations

Note: Circles are drawn roughly proportional to the sizes of the club chains based on revenue


Club Store Keys to Success

  • New / Treasure hunt

  • No- frills warehouse

  • Members (segment)

  • Efficiency at pallet level/ cross-docking

  • Goal: 3 month slot then change

  • Disruptive pricing

  • Internet sales

  • Value drives member renewal


Map

448 locations: 41 U.S. States 85 locations: Canadian 32 locations: 18 Mexican states

23 locations: United Kingdom9 locations: Taiwan9 locations: Korea13 locations: Japan3 locations: Australia


Store Count


Store Count Growth

United States

International


Sales (millions)


Weekly Sales Per Store (millions)


Annual Sales Per Square Foot


SG&A


GM


EBITDA


Comparable Store Sales Growth


Costco Shoppers

Percent of U.S. Households Shopped Costco:

18%

*Read as: 58% of Costco shoppers also shop at Walmart

Note: Bolding/highlighting indicates a significant difference between column percentages (95% confidence level)

*Read as: 16% of Costco shoppers also shop at Sam’s Club

Source: Kantar Retail ShopperScape®, July-September 2012


Membership (How)

  • 67 million card holders

  • 37 million households

  • Gold Star Member = $ 55

  • Business Member = $ 55

  • Executive Member = $ 110

  • Membership fees allow Costco

    to maintain low margins


(Millions)

80% Gold

20% Business


Costco

  • Customer Facts-

    • Yearly Shopping Frequency11.7

    • $ spent per trip$101.54

  • Miscellaneous Facts-

    • Average size per unit141,000 sqft

    • Average SKUs3,700-4,500


Customers in Taiwan


SWOT Analysis

W

Strengths

  • Low Prices

  • Strong Brand

  • Operating Efficiency

  • Exceptional Workforce

  • Strong membership

Weaknesses

  • Burden of high wages paid to worker

  • Low price margins

  • E-commerce activities

  • Small Marketing budget

  • Aging clientle

Opportunities

  • Appeal to conscientious shopper

  • Expand into foreign stable markets

  • Mergers & Acquisitions

  • Massive supplier pool

Threats

  • Aggressive price

    competition by rivals

  • Political complications in foreign markets

  • Cannibalization

S

O

T


Life Cycle – Maturity Stage

  • Costco is in the mature stage

    ?


Average Sales by Opening Year (in $millions)

Open Year

Calendar Year


Conclusions

  • Overall, Costco is doing great!


Modeling Discussion& Questions?


Costco Club Research

  • Data Sources

    • Costco’s Annual Report & 10K

    • Kantar Research

    • A.C. Nielson

    • Slide Share

    • Supermarket News

    • Retail Analysis

    • CNBC

Rob Barker 704 603 7773


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