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Victory Supermarkets
Victory Supermarkets
Victory Supermarkets
Victory Supermarkets
Victory Supermarkets
Victory Supermarkets
Victory Supermarkets
Victory Supermarkets
Victory Supermarkets
Victory Supermarkets
Victory Supermarkets
Victory Supermarkets
Victory Supermarkets
Victory Supermarkets
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Victory Supermarkets

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  • 1. VICTORYSUPERMARKETS
  • 2. AGENDA KEY ISSUES STRATEGIC OPPORTUNITY COMPETITOR ANALYSIS FINANCIALS RECOMMENDATION
  • 3. Key Issues Changing supermarket landscape Preference for home meal replacements Increased margins carried by food court
  • 4. Problem Identification Challenges Strategic objectives Recommendation Project kick-off Dependence on distributor 1.5 bln. Annual sales ? 1996 Short-term financing Minimize dependency on Fleet Partnership with Supervalu 1999
  • 5. STRATEGIC OPPORTUNITIES EXPAND • Conventional Stores 1.Option NOT TO EXPAND 2.Option • Market Square concept
  • 6. COMPETITOR ANALYSIS SALES REVENUES, bln. $6 $2 SHAW’S PRICE CHOPPERS $0.3 VICTORY 18% 30% 40% MARKET SHARE
  • 7. NET SALES 16 - Marlboro break even at 9mln. Sales - Kingston break even at 10 mln. sales 14 12 10 Marlboro,mln. Kingston,mln. 8 6 4 2 0 1996 1997 1998 1999 2000 2001
  • 8. NET INCOME BEFORE DEPRECIATION 2000 1500 1000 Marlboro,thousands Kingston,thousands 500 0 1996 -500 1997 1998 1999 2000 2001
  • 9. TOTAL COSTS Market Square - Increased overhead, payroll costs Conventional Stores - Training costs 14 mln. 22 mln.
  • 10. Conventional vs. Market Square stores Marlboro • NPV: $240.000 • PP: 4.14 Kingston • NPV: $995.000 • PP: 4.11 Twin city • NPV: $167.000 • PP: 5
  • 11. Assumptions: - Marlboro is representative for Conventional stores - Kingston is representative for Market Square Capital by Supervalu: $100mln. NPV in millions INVESTMENT APPRAISAL $ 2.5 $ !.7 0 Conventional Stores Market Square stores
  • 12. MARKET PENETRATION Bipolar customers Not price sensitive customers Quality customers Sanitation sensitive customers
  • 13. RECOMMENDATION Challenges Strategic objectives Recommendation Project kick-off Dependence on distributor 1.5 bln. Annual sales MARKET NPV: $2.5 mln. SQUARE PP: 4.11 1996 Short-term financing Minimize dependency on Fleet Partnership with Supervalu 1999
  • 14. THANKYOU FOR YOUR ATTENTION

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