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Dave McConnell President & CEO GMDC There are those who make things happen … There are those who watch things happen … And sadly, there are those who say, “What happened?!” Four Major Trade Classes Value $15 +17% Drug $124 +8.4% 2002 ACV ($ billions) M/M $341* +7.7% $435

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Dave mcconnell l.jpg

Dave McConnell

President & CEO

GMDC



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There are those who watch

things happen …



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Four Major Trade Classes

Value

$15

+17%

Drug

$124

+8.4%

2002 ACV ($ billions)

M/M

$341*

+7.7%

$435

+3.0%

Food

$908

Total

+5.6%

* Includes supercenter sales.


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Traditional Formats Are Flat to Declining in Units, Growing Only in Dollars

  • Chain grocery

  • Chain drug store - front store

  • Department stores

  • Small box retailers (e.g., hardware stores)


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Grocery Retailer’s Dollar Growth in Non-Foods Slower than Food

Figure 5

Grocery Percent Change in Food and Non-Foods

Percent

Change

Year

Source: IRI


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Chain Drug’s Growth is Food

Figure 6

Chain Drug - Percent Change in Food and Non-Foods

Percent

Change

Year

Source: IRI


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Mass Is Also Growing Food Sales

Figure 7

Mass Percent Change in Food and Non-Foods

Percent

Change

Year

Source: IRI


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The Value Channel’s Big Three

2002

Stores $ Sales

Dollar General 6076 5.3 billion

Family Dollar 4733 4.2 billion

Dollar Tree 2263 2.3 billion


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Dreams Die Hard

· The end of the 1990's economic boom

came as a shock to many

· The events of 9/11/01 finally convinced

consumers that the boom had truly ended.

· Our challenge today is to renew the

tattered confidence of businesses and

consumers


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How Can We Do That?

How Can We Do That?


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Know Thy Customer

· Interested in information

· Value conscious

· More sophisticated and focused on health

issues

The New Consumer


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· Last 5 years has seen growth in total number of shoppers but actual trips/shopper is flat to declining

· By 2010 5-7% less trips/shopper projected

· 60 - 70% of all purchase decisions made in-store

Source: Management Ventures Inc.

The New Consumer


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Borders

Our challenge is to increase the average shopper spend/trip

The New Consumer


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The New Consumer

Wendy Liebmann


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The New Consumer

Simplify My LifeOutlets shopped in a week

Source: WSL Strategic Retail


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Dr. Robert Blattberg Northwestern University

Dr. Robert Blattberg

Northwestern University

The New Consumer


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What Is the Most Important Consumer Force Changing Retailing Today?

  • Aging of the population

  • Time-starved consumers

  • Value-orientated consumers

  • Changing ethnic structure of population

Source: Blattberg,Chaney & Assoc.

The New Consumer


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The Answer Today?

  • The value orientated consumer is affecting more retailers than any other force


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Why? Today?

  • Median household income is $42,000 per year

  • A significant segment of consumers are up to their eyeballs in debt


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The New Consumer Today?

Outlets Shopped in the Last 3 Months

1998 2000 2002

Base: Women

% % %

Retail

Mass Merchandiser 91 90 94

Supermarket/Food-drug 98 83 91

Drug Store 83 77 74

Department Store 79 72 72

Specialty Non-clothing 46 54 68

Home Improvement 61 48 68

Dollar Store na na 56

Supercenter 36 32 50

Warehouse Club 47 35 47

Specialty Clothing 37 32 38

Discount Clothing 39 29 32

Source: WSL Strategic Retail


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The New Consumer Today?

Outlets Shopped in the Last 3 Months

Base: Women <$25K $25-45K $45-70K $70K+

Income

Retail % % % %

Mass Merchandiser 92 97 95 90

Supermarket/Combo 90 90 91 90

Drug Store 77 70 71 83

Department Store 58 64 75 85

Specialty Non-clothing 50 56 78 86

Home Improvement 38 61 72 80

Dollar Store 67 64 57 37

Supercenter 52 51 49 47

Warehouse Club 19 40 50 64

Specialty Clothing 27 34 34 54

Discount Clothing 29 32 32 32

Source: WSL Strategic Retail


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What Does This Mean to MPA Members? Today?

No Limits … Break the Rules!


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The New Consumer Today?

Break the Rules

  • Be Shockingly Convenient

    • EZ Pass, e-tickets, smart cards, on-line

  • Be Everywhere

    • Anywhere the shopper wants you:

    • Don’t ignore the niches

  • Leapfrog the format

    • Barnes & Noble, Starbucks, Home Depot

Source: WSL Strategic Retail


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The New Consumer Today?

Generate Demand by Selling Items That Sell

  • Does the customer care that you sell?

    • Pickles and jeans?

    • Tires and Pepcid

    • Chain drug now sells Windex and Chips Ahoy

  • Clearly the answer is no.

Source: Blattberg,Chaney & Assoc.



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