Nolan's Finest Foods

11/20/09

Nolan's Finest Foods Category Management

RETAIL MANAGEMENT GROUP 6 Rawandev Kaur Divyadarshan

Amrita Datta

Ankit Goel

Abhinay Bajpai 1

11/20/09

Nolan’s 

Nolan’s Finest Foods is a full-service retailer that offers shoppers the convenience of one-stop shopping at its high-end food-and-drug combo stores in the San Francisco Bay area. vO ffe rs h ig h q u a lity fo o d w ith p ro m o tio n a l p ricin g . vIn th e fa ce o f h ig h co m p e titio n , N o la n ’ s is experimenting with category m a n a g e m e n t.

2

Question1: What are the national sales trends in the shampoo category? 52 Weeks

Total U.S. Supermarket Dynamics: Shampoo % Active UPCs % New UPCs # UPCs UPC Dollar Handled Velocity

Category

1,974

15%

235

$

1.64

Brands

1,714

16%

229

$

1.65

Private Label

241

12%

5

$

1.33

Generic

19

n/a

1

$

1.00

Exhibit 1 v There has been a dramatic increase in the % New Stock Keeping Units. v Specifically, Brands have increased by 16% and Private label by 12%. v Only Generics remained the same with no measured increases or decreases. 

3

Question1:Cont

Exhibit 2 v The change is not that impressive. v Only mass merchant has increased by +1.8%

Shampoo Dollar Share



Shampoo Growth Trade Channel Food Drug Mass merchant

Dollar Sales % Change Compared to a Year ago 0.9% 4.2% 8.1%

Trade Channel 12 M Last Year

12 M This year

Change

Food

51.7%

50.5%

- 1.2%

Drug

25.6%

25.0%

- 0.6%

Mass Merchant

22.7%

24.5%

+ 1.8%

E x h ib it 3 O u tlin e s S h a m p o o G ro w th b a se d o n th e D o lla r S a le s % ch a n g e ve rsu s a ye a r a g o . v T h e M a ss M e rch a n t Tra d e C h a n n e le xp e rie n ce d th e g re a te st g a in (+ 8 . 1 % ). vFo llo w e d b y th e D ru g C h a n n e l(+ 4 . 2 % ).

4



Question2: What are the differences in shampoo sales trends at Nolan’s compared with national trends?



Dollar Sales: Percent Change versus a Year Ago Market

Nolan's

13 weeks

52 weeks

13 weeks

52 weeks

Total dollar sales

+0.1

+1.2

- 10.6

- 4.5

Health Beauty Dept.

+1.5

+4.2

- 8.5

- 4.3

Shampoo category

- 3.5

+0.7

- 19.6

- 9.7

Exhibit 4 vThe Dollar Sales Percentage change in the Shampoo category for the Market (All food stores) has increased very slightly over a 52week period (+0.7%) and moderately declined over the most recent 13 weeks (-3.5%). vAlthough the national figures are far from impressive, even on an annual basis, Nolan’s fared far worse. Over a 52-week period the retailer’s Dollar Sales Percentage sharply declined (-9.7%), and the last 13 weeks have been worse (-19.6%).

5



Question 3: What would be causing these differences?



Competitive Price Comparison for Shampoo: Counts of Items Showing Differences from Nolan’s 

Food#1 87

Mass Merch

Chain Drug

Competition is higher

Nolan's 0

0

101

Food#2 0

Competition is same

103

0

0

0

59

Competition is lower

0

16

103

2

44

Competition does not carry

0

0

0

0

0

Exhibit 5 : vCompetitive Price Comparison for Shampoo between Nolan’s and competitors suggests that Nolan’s pricing may be one factor. vOnly the Mass Merchandiser consistently charges less for shampoo products than Nolan’s.

6

QUESTION 3: Cont Brand Importance Report for Shampoo: Nolan’s Foods versus Remaining Market for 13 weeks Description

Chain Sales Chain Rank Remain Mkt Remain Sales Chain Mkt Rank Share

Chain Cat. Impt.

Rem. Mkt. Cat. Impt.

Clean & Soft

$108,826

1

1

$512,345

17.5%

14.5

13.0

1st Impressions

77,672

2

3

370,341

17.3

10.3

9.4

Mane Tame

64,446

3

4

244,160

20.9

8.6

6.2

Bargain Bubbles

56,864

4

2

433,300

11.6

7.6

11

Silky Style

43,198

5

6

147,773

22.6

5.8

3.7

Elegance

30,869

6

5

181,075

14.6

4.1

4.6

Exhibit 6: Brand Importance Report for Shampoo illustrates that Nolan’s brand emphasis are marginally different than the rest of the market. 7

QUESTION 3: Cont Clean & Soft

1st

Nolan’s

25

25

Rem Mkt

25

Nolan’s Rem Mkt

Product Mix Summary Report: Shampoo Dollar Sales 13 weeks Impressions Mane Tame

Bargain BubblesSilky Style

Elegance

Private Label

15

21

13

5

7

39

28

42

20

16

28

6

6

6

2

4

1

4

7

10

11

3

5

4

6

6

7

6

19

4

5

6

6

10

8

32

5

7

21

Items Carried

Sizes Carried

Types Carried Nolan’s Rem Mkt

Exhibit 7: Product Mix Summary Report illustrate that Nolan’s product mix are marginally different than the rest of the market. 8



Question 3: Cont



Slow Seller Report: Shampoo for Nolan’s Foods, 13 Weeks versus a Year Ago Chain Sales

Chain Mkt. Share

Rem.Mkt. Growth

Chain Growth

Golden JJB Lq T 3 oz.

$3

9.9%

-51.2

-50.0

1st Imprs. DF ND Lot. 11 oz.

10

0.7%

-59.4

-99.4

Gentle GLD Lq. 11 oz.

11

100.0%

-100.0

9.6

Golden AV Lq. T 3 oz

12

22.4%

13.2

-69.2

Suds PB Lq. 8 oz.

14

6

107.1

2.9

Silky Style X-B Lq.18 oz.

14

1.6

-65.6

-99.5

Exhibit 8 vSlow Seller Report , which features data describing what Nolan’s’ worst selling shampoo UPCs are, provides the greatest insight into the problem of any of the information that is currently available v v v

9

11/20/09

Question 4: A plan of action.



v The only plan of action as of now will be to have “knock off the slow seller” approach, which involves replacing the slow selling UPCs with new products and/or increasing shelf space for existing products. v They can also install category management software. v v

10

11/20/09

11