The Right Tools + The Right Team = Reduced Unsaleables

1. The Right Tools + The Right Team = Reduced Unsaleables Presented by: Rob Shifter, Nestlé USA, Inc. Jessica Bryner, Rite Aid Corporation

2. Overview • Components of Collaboration • Sufficient remaining shelf life • Detailed unsaleables data • SKU rationalization • Improved store assortment planning • Effective inventory management • Item discontinuations • The Fruit of Our Labor • Lessons Learned & Recommendations

3. Remaining Shelf Life In most cases, newer is better. • Internal initiative at Nestle

4. Detailed Data Without a map, you might be running in the wrong direction. • Reporting capabilities • Monthly updates • High level tracking by category • Trend results • Detailed SKU results by a specific retail store

6. SKU Rationilization Sometimes, things don’t work out like you planned. • Review performance as a team • Determine the underlying issues causing high unsaleables • Take the appropriate actions to remove poor performing items from distribution

7. Improved Store Assortment Planning Don’t use an axe when a scalpel will do the job. • Some items do not need to be discontinued in ALL stores • Store clusters with the right assortment

9. Effective Inventory Management We expect people to be productive; inventory should be, too. • Inefficient use of company assets • Rite Aid internal initiatives • Markdown optimization tool • Tighter controls on inventory flows to the stores • Improved visibility to current inventory levels

10. Dealing with Item Discontinuations No self-respecting product wants to end up a banana box. • Where should saleable items go? • Formal store clearance program & phased markdown guidelines help sell-thru • Helps keep food and packaging out of landfills

11. How It All Works • Quarterly meetings to review standardized reports • Who attends? • Sales representatives • Category management • Inventory planning • Supply chain • What is discussed? • Product assortment • Promotion schedules • Other areas that impact unsaleables

12. The Fruit of Our Labor

13. Lessons Learned and Recommedations • Remaining shelf life • Key metric = # of days remaining at time of delivery • Detailed data • Needed to make the best decisions • Collaboration task force • Will ensure that the best decisions will be implemented • Applicable regardless of returns policy