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Sales Update. Mr. Randy Chandler. Director, Sales. 2007: A Year of Accomplishments. Sales $5,537.3M (+ $120.4M) Patron Satisfaction − 4.60 (Out of maximum of 5.0) American Customer Satisfaction Index 2006 National average for commercial grocers: 75
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Sales Update Mr. Randy Chandler Director, Sales
2007: A Year of Accomplishments • Sales • $5,537.3M (+ $120.4M) • Patron Satisfaction • − 4.60 (Out of maximum of 5.0) • American Customer Satisfaction Index 2006 • National average for commercial grocers: 75 • DeCA’s score: 77— Second only to PUBLIX supermarkets • Benefit Value • − Target 30% • − Actual 31.2
Commissary Sales - Total DeCAOctober – January +1.7% +5.0% +3.5% +2.5% $1858 $1917 Cumulative YTD Sales +$59 +3.2% FY 2008 Strategic Sales Target: $5602 +$65 +1.2%
Customer Transactions - Total DeCA October - January # Transactions -1.7% +0.4% +0.1% +1.0% 30.760 30.744 -0.16 -0.1% Cumulative Transactions Sales Per Transaction Year Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep YTD FY 07 $58.57 $60.57 $62.83 $59.58 $61.27 $60.71 $59.48 $59.87 $61.32 $59.43 $60.70 $62.09 $60.42 FY 08 $59.97 $63.38 $64.96 $61.03 $62.36
Region Summary for October – January, FY 2008 Actual Data Change vs. Prior Year
Perimeter Departments (FY Q1 Comparisons 2008 vs. 2007) • Perishable Sales show strength • Produce + 7.16% • Meat + 1.92% • Deli + 4.70% • Bakery + 6.03% • Sushi To Go + 5.83% • Hot Foods + 8.88% • Seafood + 7.22%
DeCA’s Top 15 Sales Days in the 21st Century Updated 2/05/2008
Final Promotional Results CY 07 • Promotional Category results (unit lift percentages) • 64.5% Manager’s Special • 64.2% Power Buys • 72.1% Primaries • Overall lift percentages outstanding • Unit Lift ~ 47.8% • Dollar Lift ~ 25.8%
September 2007 Case Lot Sale Region Case and Dollars Breakout
Promotional Goals for 2008 • Improve promotional flexibility • Take advantage of consumer advertising associated with new item launches • Take advantage of “close out” specials • Include perimeter departments in all promotional packages
May Commissary Awareness Month • Goal: Get hard-to-reach demographic groups into the stores • Month of special in-store events • Fun tours • In-store games • Targets young, single service members
Worldwide Case Lot Sales • Held every May and September • Gigantic – All 258 stores participate • Special case lot sale page on • www.commissaries.com • Customer favorite • Buy in bulk • Increases overall savings • Well beyond average 30%
Family Day • Every fourth Monday in September • Ties in with the greater DoD effort to combat drug, alcohol and tobacco abuse, and TRICARE’s Healthy Choices for Life
Special Sales • Remote/Guard and Reserve • Seafood Roadshows
Information Outreach to Guard and Reserve • Communication of the benefit • Reserve & National Guard magazine • Fleet Reserve Association magazine • Outreach initiatives • Army Reserve Family Readiness Education • National Guard Bureau Annual Awards • Addressing Guard and Reserve conferences/meetings • Wounded Soldier program • “Discover Your Benefit” campaign • Promotes all aspects of the benefit • Focus is on Guard and Reserve
Expanding Benefit Access for Guard and Reserve • Expand Guard and Reserve members’ access to the commissary benefit • On-site sales • DeCA Fiscal Year 2007 results • Sales = $1,634,167 • # of Guard and Reserve locations = 21 • DeCA Fiscal Year 2008 (YTD) results • Sales = $351,965 • # of Guard and Reserve locations = 5 • Working with NGB/Service reserve chiefs to identify locations to accomplish goal of 100 sales events through 2008 • Exploring Web/direct/auto software
Expanding Benefit Access for Guard and Reserve • Developing a staff office for Guard and Reserve support • Would serve as the POC for headquarters support: • Logistics • Human Resources • Communications/IT support • Second destination transportation • Equipment • Develop a “Virtual” solution for guard sales • March internet ordering – on site payment • Develop total internet solution to include pre-payment
Industry Trends • Channel Trends • Targeted marketing and enhanced customer service • Convenience store growth • Alternative channel growth for grocery items • Consumer Trends • Consumers struggling with energy costs and housing downturn becoming more value/price conscious • Aging population • Ethnic population growth • Increased customer education/product awareness • Category Trends • Health and Wellness • Organic and “Green” products • Authentic Ethnic products
Plan-o-Gram • Currently all stores are merchandised using standardized plan-o-grams • Based on historic sales patterns • Specific sets based on store class size • Planogramming the “Future” • Pre-position space for growth categories • Refine assortments in declining categories • Re-configure flow to maximize allocation efficiencies • Test concept at Ft Bragg North • Measure incremental changes
Stock Assortments • Standardized across CONUS stores; • Europe and Far East slightly unique • Modified by regional/local brand favorites • Future assortments more demographically • Area of the country • Mission of the base • K-1 assortments being scrubbed to eliminate duplication • Develop an assortment with flexibility to add emerging products during their peak introductory period
Industry Partners • Solving vendor stocking • Working group established as part of the Commissary Council • Cost to DeCA estimated • Met with Produce and Deli/Bakery suppliers on February 25, 2008 • Open forum with DeCA and Industry to discuss existing program performance • Formulate issues to work and define areas for potential improvements • Produce as part of the promotional program
SmartWay --Transport Partners-- • DeCA encourages participation of our transport partners • Notice to the Trade #08-41 outlines DeCA’s support • Partners commit to measure and improve the efficiency of their freight operations, using EPA-developed tools that quantify the benefits of a number of fuel-saving strategies • Program offers incentives for fuel efficiency improvements and greenhouse gas emissions reductions • Transportation providers servicing DeCA who are SmartWay Partners (as shown on SmartWay Web Site 10/15/2007)
1, , Million CFL BulbGoal in 2008! • Compact Fluorescent (CFL) Bulbs save up to 75% on energy usage • 2008 Goal • Sales of 1,000,000 units • Program mirrors Wal-Mart 100 Million Bulb Goal (about double prior year volume) • Increased Selection • More bulb types • Multi-packs • Shipper Program • News release #04-08 sent out January 10, 2008 • Bulb sales in January 2008 over 100,000 units
Reusable Green Bags • All DeCA Stores • Displayed on racks • K1 stores have 1 rack • K2 stores 2 racks and so on • Bags • Price is 70 cents per bag • News Release # 08-08 sent out January 17, 2008 • Big sales – over 525,000 bags from October 30, 2007 to present
Organics = Healthy Growth! • Explosive year over year growth from bar coded organic items • 56% growth in sales dollars (+$11,328,269) • CY 2006 sales dollars: $ 20,129,456 • CY 2007 sales dollars: $ 31,457,725 • 43% growth in number of SKUs sold (+196 items) • CY 2006 SKUs with sales: 452 • CY 2007 SKUs with sales: 648 • Note: Above data does not include price look up produce items and random weight meat items
Earth Day - April 22, 2008 • Earth Friendly Products featured in Period #8 to coincide with Earth Day and Arbor Day featuring: • Organic Products • Energy Saving Bulbs • Recycled Produces • Efficient Packaging Products
NAS JRB Fort Worth • Overall Store: 86,101 SF • Sales Area: 44,000 SF • Grand Opening: March 25, 2008 • OSD approved October 29, 2007 • BX Mart to Commissary • Exchange turns over building by February 26, 2008 • Exchange retains front of warehouse area for Class 6 • and furniture and appliances sales • Projected monthly sales $1.8M
Fort Detrick • Project Awarded: February 21, 2006 • DeCA Project Cost: $13,314,195 • Overall Store: 34,210 SF • Grand Opening: April 8, 2008 • New Commissary • Construction is 95% complete • General sales area with Grab-N-Go area • Energy efficient Heating and Air Conditioning system • Heat recovery system • Return air reclaims cold display case spill-over • Automatic refrigeration monitoring and control system • Force protection