Learning from the top performers in tobacco retailing

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Learning from the top performers in tobacco retailing

  1. 1. LEARNING FROM THE TOP-PERFORMERS INTOBACCO RETAIL April 26, 2011 Presented as Part of 117 South Cook Street #339 Barrington, Illinois 60010 phone: 847.722.2732 fax: 847.382.1801 Copyright © 2011 Balvor LLC. All Rights Reserved. davidbishop@balvor.com
  2. 2. What can we learn from top-performers? Space KPIs Product Inventory Copyright © 2011 Balvor LLC. All Rights Reserved. 2
  3. 3. Composition of Retailer Respondents (Percent of Retailers – Grouped by Number of Stores Operated) 500+ 201-500 Stores, 2% Stores, 4% 51-200 Stores, 8% Top-Line Characteristics 11-50 Stores, 9% # of retailers: 162 1 Store, 48% # of store represented: 17,391 1-10 store operator share: 77% Median cigarette CPW: 120 2-10 Survey: 1/18/11 – 1/31/11 Stores, 29%Source: Balvor/CSN 2011 Tobacco Retailing Survey, Balvor LLC, February 2011. Copyright © 2011 Balvor LLC. All Rights Reserved. 3
  4. 4. 2010 Cigarette Carton Sales (Average per Store Week) 414 102 Top Quartile All OtherNote: Quartiles are based on average weekly cigarette volume per store.Source: Balvor/CSN 2011 Tobacco Retailing Survey, Balvor LLC, February 2011. Copyright © 2011 Balvor LLC. All Rights Reserved. 4
  5. 5. 2010 Dollar Sales Growth Index (Top Quartile vs. All Other) Index = (Top Quartile / All Other) x 100 Cigarettes 227 OTP 123Source: Balvor/CSN 2011 Tobacco Retailing Survey, Balvor LLC, February 2011. Copyright © 2011 Balvor LLC. All Rights Reserved. 5
  6. 6. Average Shelf Space per Store – vs. Year Ago (Percent of Retailers) Cigarettes OTP 47% 41%Increased 9% 6%Decreased 12% 15% 17% 21% Top Quartile All Other Top Quartile All OtherNote: Percentages may not equal 100% as difference relates to those responding that space “remained the same.”Source: Balvor/CSN 2011 Tobacco Retailing Survey, Balvor LLC, February 2011. Copyright © 2011 Balvor LLC. All Rights Reserved. 6
  7. 7. Cigarette Space Allocations – vs. Year Ago (Percent of Retailers) Top Quartile All OtherIncreased 38% 20% 21% 16% 16% 12% 13% 9% 10%Decreased 17% 26% 27% 25% 25% 29% 31% Premium Branded Sub-Generic Fourth Tier Premium Branded Sub-Generic Fourth Tier Discount /Private Label Discount /Private LabelNote: Percentages may not equal 100% as difference relates to those responding that space “remained the same.”Source: Balvor/CSN 2011 Tobacco Retailing Survey, Balvor LLC, February 2011. Copyright © 2011 Balvor LLC. All Rights Reserved. 7
  8. 8. OTP Space Allocations – vs. Year Ago (Percent of Retailers) Top Quartile All Other 61% 51% 47% 48%Increased 38% 18% 15% 11% 7% 7% 12% 14% 18% 22%Decreased 25% 34% Smokeless Cigars Papers Pipe/Cigarette Smokeless Cigars Papers Pipe/Cigarette Tobacco TobaccoNote: Percentages may not equal 100% as difference relates to those responding that space “remained the same.”Source: Balvor/CSN 2011 Tobacco Retailing Survey, Balvor LLC, February 2011. Copyright © 2011 Balvor LLC. All Rights Reserved. 8
  9. 9. In-Store Inventory Levels (Percent Change vs. Year Ago)Increased 2.4% 0.5% 0.6% -0.2% -1.9% -1.9%Decreased -2.2% -2.7% -4.1% -4.9% Cigarettes Smokeless Cigars Papers Pipe/Cigarette Tobacco Top Quartile All OtherSource: Balvor/CSN 2011 Tobacco Retailing Survey, Balvor LLC, February 2011. Copyright © 2011 Balvor LLC. All Rights Reserved. 9
  10. 10. # of SKUs Offered vs. Year Ago - Cigarettes (Percent of Retailers) Top Quartile All OtherIncreased 38% 37% 24% 24% 24% 19% 19% 15% 18% 18%Decreased 19% 24% 28% 31% 35% 42% Premium Branded Sub-Generic Fourth Tier Premium Branded Sub-Generic Fourth Tier Discount /Private Label Discount /Private LabelNote: Percentages may not equal 100% as difference relates to those responding that space “remained the same.”Source: Balvor/CSN 2011 Tobacco Retailing Survey, Balvor LLC, February 2011. Copyright © 2011 Balvor LLC. All Rights Reserved. 10
  11. 11. # of SKUs Offered vs. Year Ago - Smokeless (Percent of Retailers) Top Quartile All Other 67% 56% 54%Increased 46% 41% 40% 26% 21% 17% 14% 0% 8% 7% 13% 12% 13%Decreased 15% 22% 21% 23% 24% 28% 36% 39%Note: Percentages may not equal 100% as difference relates to those responding that space “remained the same.”Source: Balvor/CSN 2011 Tobacco Retailing Survey, Balvor LLC, February 2011. Copyright © 2011 Balvor LLC. All Rights Reserved. 11
  12. 12. # of SKUs Offered vs. Year Ago - Cigars (Percent of Retailers) Top Quartile All Other 48%Increased 44% 39% 28% 29% 23% 22% 21% 8%Decreased 11% 15% 19% 25% 25% 24% 40% Singles-Small Singles-Large Pack-Little Pack-Small Singles-Small Singles-Large Pack-Little Pack-SmallNote: Percentages may not equal 100% as difference relates to those responding that space “remained the same.”Source: Balvor/CSN 2011 Tobacco Retailing Survey, Balvor LLC, February 2011. Copyright © 2011 Balvor LLC. All Rights Reserved. 12
  13. 13. Current Availability of e-cigarettes (Percent of Retailers) 53% 46% 26% 21% 21% 15% 13% 6% Yes No, but were planning to sell No and were still evaluating No and we dont have any them in 2011 this opportunity plans to add at this time Top Quartile All OtherSource: Balvor/CSN 2011 Tobacco Retailing Survey, Balvor LLC, February 2011. Copyright © 2011 Balvor LLC. All Rights Reserved. 13
  14. 14. 2011 Dollar Sales Targets (Percent Change vs. Year Ago) 7.5% 6.8% 4.0% 3.7% Cigarettes OTP Top Quartile All OtherSource: Balvor/CSN 2011 Tobacco Retailing Survey, Balvor LLC, February 2011. Copyright © 2011 Balvor LLC. All Rights Reserved. 14
  15. 15. What lessons did we learn from top-performers?• Space - Manage it more aggressively• SKUs - Scrutinize lower-volume ones more closely• Inventory - Balance reduced levels with in-stock on core SKUs• Assortment – Keep fresh with NPI, but don’t loose focus on base Copyright © 2011 Balvor LLC. All Rights Reserved. 15

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