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DeCA East

Sales Update. DeCA East. Mr. Randy Chandler Director, Sales. YTD East Zone Sales. Thru April 2008. TOTAL SALES ALL 11 ZONES UP GROCERY SALES ALL 11 ZONES UP PRODUCE SALES ALL 11 ZONES UP

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DeCA East

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  1. Sales Update DeCA East Mr. Randy Chandler Director, Sales

  2. YTD East Zone Sales Thru April 2008 TOTAL SALES ALL 11 ZONES UP GROCERY SALES ALL 11 ZONES UP PRODUCE SALES ALL 11 ZONES UP MEAT SALES 6 OF 11 ZONES UP TRANSACTIONS 9 OF 11 ZONES UP

  3. East Zone Leaders - Sales Thru April 2008 * Indexed to Region Average

  4. May Case Lot Sale

  5. May Case Lot Sale

  6. End of Cheap Food? • Healthcare costs • Oil price surge • Weak dollar • Weather • Drought in Australia • Flooding in Argentina • Demand • China beef consumption has doubled • Impact of ethanol

  7. Sustainability? Corn 2.5 lbs corn = 1lb poultry It takes 800 gallons of water per person per day to produce daily food intake It takes 450 lbs of corn to produce enough ethanol to fill an SUV gas tank 7 lbs corn = 1lb beef 1,500 gls water = 1lb beef Water

  8. Consumer Impact • FMI Trend Reports • 71% increase in home cooking frequency • 67% buying fewer luxury items • 60% buying more store brands • Value will be focus • Fewer trips to secondary stores • Fewer trips = STOCK UP

  9. Retail Shift • New outlets • Supercenters, 70% • Dollar stores, 64% • Losing ground • Drug channel, -3% • Grocery, -6%. • Same store dollar sales declined as well

  10. Defining Trends • Four trends will shape the retail operating environment the remainder of this decade: • Aging population • Increasing ethnic diversity • Need for speed • Health & wellness concerns • Opportunities products, alterations to the store (lighting, store set) accommodate older shoppers’ limitations

  11. The Three Ps • Manufacturers trying to keep pace with new items • Portability • Preparation simplicity • Preparation time • New product concepts must respond to speed-of-life issues without sacrificing flavor

  12. Fastest-Growing Categories >$1 Billion • Drinkable yogurt • Fresh fish/shellfish & seafood • Alcoholic cider • Ready-to-eat salads • Baby formula • Dairy-based drinks • Source: executive news report from nielsen global services, december 2006

  13. New Team Members • Michelle Frost – Chief, Semi-Perishable Division • Brad McMinn – Chief, Perishable • Barbara Merriweather – Category Manager, Local/DSD

  14. Promotions • Total items published reduced 21% • Dollar Sales Per SKU + 5% • Units Per SKU + 7% • Increase Pallets/Shippers • Incorporate Club Packs • Averaging $6.8 million per month • $2 million per month increase • Seasonal Programs + $9 million

  15. Front End Racks • Fixtures have been selected • Currently • Developing stock assortment • Surveying stores select type of fixtures • 60 days to manufacture equipment • Phased implementation - September

  16. Check It Out • Shoppers choosing self-checkout: • Wal-Mart (45%) • Kroger (43%) • Target (40%) • Publix (28%) • Costco (26%) • Whole Foods (14%) • Safeway (13%) • Meijer (11%) • Albertson’s (11%).

  17. Space Allocation – Bragg North • Today little variance in plan-o-grams • Based on historic sales data • Sets based on class of store • No factor for lost sales or promoted volume • Reduce space in declining categories • Fewer items = IN STOCK • Reconfigure flow to maximize allocation efficiencies

  18. Organic Options • Organic food sales represent just 2.5% • Organics grew 30% in 2007 • Grown roughly 20% per year for past five years • Grocery annual sales grew 3–5% overall • Organic food sales predicted to double as early as 2009 • Organic offerings in personal care, nutritional supplements, household cleaners, and pet food

  19. Focused on “Green” Efforts • Organic Products • Items up 39% in last 12 month – from 460 to 641 • Sales up 40% (Apr–Mar over prior year) to 33.5m • Environmental Initiatives Reusable grocery bags sold starting 10/30/2007 • Over 1,007,000 sold thru 05/14/2008 • Compact fluorescent light (CFL) bulbs, FY 08 Goal: 1 Million • Over 733,000 sold FYTD – thru 05/14/2008

  20. Expand Benefit - Access G/R • Developing staff office for support • Serve as single POC for store support • Logistics • Communication • Transportation • Equipment • Develop “Virtual Solution” • Internet ordering – on site payment • Develop total solution to include payment • Expand – self fulfillment

  21. Retail Perspective • Consumers are plugged into technology • Logging on to plan trips search for restaurants and socialize • Top 15 web domains • eBay.com, 1st • Amazon.com, 5th • Target.com, 12th • Wal-Mart.com, 15th

  22. Thank You! Mr. Randy Chandler Director, Sales

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