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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

Dave McConnell

President & CEO

GMDC

slide6
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.

traditional formats are flat to declining in units growing only in dollars
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)
grocery retailer s dollar growth in non foods slower than food
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

chain drug s growth is food
Chain Drug’s Growth is Food

Figure 6

Chain Drug - Percent Change in Food and Non-Foods

Percent

Change

Year

Source: IRI

mass is also growing food sales
Mass Is Also Growing Food Sales

Figure 7

Mass Percent Change in Food and Non-Foods

Percent

Change

Year

Source: IRI

slide11
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

slide12
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

slide13
How Can We Do That?

How Can We Do That?

slide14
Know Thy Customer

· Interested in information

· Value conscious

· More sophisticated and focused on health

issues

The New Consumer

slide15
· 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

slide17
Borders

Our challenge is to increase the average shopper spend/trip

The New Consumer

slide18
The New Consumer

Wendy Liebmann

dr robert blattberg northwestern university
Dr. Robert Blattberg Northwestern University

Dr. Robert Blattberg

Northwestern University

The New Consumer

what is the most important consumer force changing retailing today
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

the answer
The Answer
  • The value orientated consumer is affecting more retailers than any other force
slide23
Why?
  • Median household income is $42,000 per year
  • A significant segment of consumers are up to their eyeballs in debt
outlets shopped in the last 3 months
The New ConsumerOutlets 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

slide25
The New Consumer

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

slide26
What Does This Mean to MPA Members?

No Limits … Break the Rules!

break the rules
The New ConsumerBreak 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

generate demand by selling items that sell
The New ConsumerGenerate 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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