4. 2001 Opened Forest Lake moved store and
corporate office from Stillwater to Mahtomedi
2002 Closed Northfield
2003 Re-opened in Dundas, downsized Eagan
2004 Opened Lakeville
2005 Opened Bloomington (joined MSCA)
2006 Moved/built new corporate office/store in
Mahtomedi
2007 Opened Plymouth
2008 No new stores
2009 Opened St. Paul and Wayzata; relocated
Eagan
5.
6. Our success in today’s economic climate…
Simultaneously opened two new locations in
March 2009 and relocated our oldest location
(Eagan) in early April
Same store growth YTD is at 21.7%
Net income to budget YTD is at 15%
Mature stores with high growth %
Reinvesting in
stores/infrastructure/technology
Looking to relocate a site in 2009
Looking for 1-2 new sites for 2010
7. Continue to focus on basics…
Product
Focus on top sellers
Keep assortment fresh – listen to customers
Get rid of the ‘dogs’
Place
Service focus
Attention to detail
Operations
Value
8. Continue to focus on basics…
Price
Stay in line with mfg. price increases
Continue programs
Capitalize on vendor relationships
Promotion
Advertising/marketing program
Partnerships
Community involvement
Branding
9. Do the right thing…
For the customer…
Focus on the basics and standards…
Loyalty brings…repeat AND new business
Chuck’s (Pet) Bucks Loyalty program drives our
business because our customers see VALUE
through their shopping experience
10. The Focus
Written Standards
Accountability to those standards
Survey program
Shopper program
Action
Recognition of performance
Loyalty program
Recovery
Training/education team members
and customers
11. Competition
Price
Availability
General business climate
Vendors
Distributors
More exposure…more
scrutiny
12. 3,500 to 4,500 square feet
Leased space
High visibility storefront, pylon/monument
signage, commute side traffic
Grocery anchor
Byerly’s, Lunds, Cub, Kowalski’s
Restaurants, product retailers, related but not
competitor business, coffee shops
High traffic volume shopping center
Urban or suburban
Big box pet supply competitors outside a
minimum 5 mile range
Receiving access with ramp and capacity to receive
pallets into stock area
14. Do the right thing!
Have Fun!
Give back!
2007 Customer Thank You Gift
www.chuckanddons.com
Editor's Notes
My thanks to the program committee for this opportunity to speak with you all today.
Chuck & Don’s has been in business since 1990
In 2000:
Frustrated ownership
Absence of oversight, inconsistency
7 store locations
3 ½ corporate staff
Less than 50 employees
$4.5M sales
11th consecutive year of sales growth
3rd consecutive year in the red
In 2009:
Owners that can sleep at night
Consistency in all 15 locations
10 corporate team members
167 team members
We will top $25M in sales this year
6th year in the black
How did we turn that corner?
We are fortunate to be in an industry where passion exists and is easy to share
Some very simple components have combined to get us to our current state
Established our identity
Customer focused
Neighborhood pet supply store, locally owned and operated
Educate our customers and provide what they and their pets need
Involved in the communities in which we do business
Give back to those communities
Branding Chuck & Don’s vs. Pet Food Outlet
Hired the right staff
Retailers, sales staff
Created and implemented infrastructure/operating standards
Through these changes we have seen a transformation to growth and expansion
We have had some opening or closing activity each year from 2000 to present with the exception of 2008
The two locations opened this year were made possible by our MSCA affiliation
Our thanks to Peter Dugan for presenting the SP site and Ned Rukavina who presented the Wayzata site
Our strategy gelled in 2004 and we now see continued growth
2008 same store growth was 26.2%
YTD Same store growth is at 21.7%
2009 will produce sales that mark a 455.6% increase from 2000
It is worth noting that our 2009 year to date negative net income growth is attributed to opening two new locations during first quarter and relocating another as compared to no activity last year.
2008 pet industry estimates state pet food and supplies is between an $11-16 billion dollar industry with 5% forecasted annual growth
In today’s economic climate, the pet industry is not recession proof, rather a bit resistant
At a point where many companies are discontinuing operations, closing locations, and struggling toward flat sales and net income, we are
Half way through our 9th year of double digit growth
In our 6th year net income increases
Virtually no debt
Looking at our growth numbers we also have mature stores ranging from 13-19 years open with growth ranging from 17 to 29%
Our capital improvements and expansion includes
2008
Added a Kronos time system in 2008
4 additional Point of Sale terminals
3 new exterior signs
2009
6 additional Point of Sale terminals
We are on a schedule to add portable data inventory terminals to all locations by mid 2010
Working on BI solution to improve analysis, communication, and decision making
Expanding locations, corporate staff, and store staff
Our strategy boils down to common sense
If you look at the basics of product, place, price, and promotion
Product
We ensure the top 100 sellers are in all stores
We monitor sales and adjust stock levels accordingly
Buyers and inventory specialist attend two national product shows annually
Get rid of poor sellers yet maintain a special order program – we will find what you need – or an alternative
Place
We strive to be the pet supply destination
Service is our focus
All customers are greeted
Other service standards are in place
Stores are
Clean
Organized
In stock
Staffed
A great example of our attention to detail would be the day of our Eagan Grand re-opening, unbeknownst to the staff, my admin’s granddaughter moved a can of dog food out of place and by the next time she checked it had already been faced.
Operations
Monthly Store Manager checklists
Quarterly DM checklists
Value
Expertise
Get what you need
Friendly atmosphere
Greeted by name/pet’s name
When was the last time you received a sympathy card from your pet supply store when you lost a pet?
Price
Only take the min mfg price increases
We never increased prices due to fuel surcharges
Continued our rebates/mid quarter mailers/couponing
Utilizing vendor co-op for as many offers as possible
Promotion – we have not cut our marketing/advertising in lean times – we spend smart
We stay with a marketing program/mix that has worked yet we try new things
Remain cognoscente of objectives
Continue investment in our loyalty program
Maintain event attendance and sponsorship (and discontinue the ones that don’t make sense)
We have found success with radio and endorsements
We practice active participation in chambers and professional associations
We have increased our community involvement
In store events
Cause marketing program
We work with over 50 non profit orgs including MN Zoo, Ronald McDonald House, Caring Tree, Second Harvest, numerous animal rescues
We contribute dollars and product
We are highly involved Animal welfare community
In store foster program with 5 rescues
In store events
We have facilitated the adoption of over 500 cats since 2002
Fundraising
We organize two annual fundraisers (2008 raised over $50K for spay/neuter and animal rescue initiatives)
One of the ten founding members of MnPAW
Branding
We have remained consistent with our message but have the courage to reinvent or further define our brand
First line of our mission statement…
At Chuck & Don’s we care about pets, people, and doing the right thing
Do the right thing… guides every decision we make
We know we are in business because of our customer and it isn’t enough to satisfy them… we must create an experience and provide value
We treat our team members, business partners, and colleagues like our customers
Loyalty brings valuable word of mouth advertising and new business
60,000+ newsletters/rebates per quarter
Over 90% of sales are attached to a customer name
Can set the clock by our mailers
How do we set ourselves apart?
Our distinctive competence is service…
Our focus is the customer
Written standards that to which team members are held accountable
Ask questions to establish customer needs
Location specific online customer survey
Quarterly secret shops
Loyalty program
Quarterly newsletter and rebate (% of purchases for prior quarter)
Mid quarter mailers
Email offers starting in August
Rebates have topped $200k per quarter
$ redemption averages 60% and # redemption averages 30%
Mid quarter redemption averages 15%
Any rebate under $1 is rounded up
Can donate rebates to the rescue collection jar in each store
I have a story
I am copied on all surveys and typically only read low scores and 100’s
I received a 36% survey on a Saturday night
Forwarded it to our DM and asked him to research
My last email to him was to the effect, I am sure you have already thought of this, but please find her food and deliver it to her on Monday.
By 2pm on Monday she had a bag of her food with a note and business card from our DM.
He forwarded the voice mail from the customer that he received later that evening.
The rare times we don’t meet our own standards we have to have a plan to recover our loyal customers
We invest in training our team members so they in turn can educate our customers
Competition
We are not in business to be the lowest price in town
Food is typically a little higher
Hardlines items such as treats, toys are lower but some people don’t recognize this
Big guys get the product first – distributor issues hit us first
National recognition/resources
Vendors
Increasing trip charges, fees, pricing structure
Discontinuing frequent buyer programs
Distributors
Playing hardball two dist. carry same product line
Not reducing distribution costs/fuel surcharges
Exposure
Having to say no to some of our partner requests for donations, sponsorships, or new business.
Competition knows who we are
Smallest 2,295 – Largest 5,694
Leased space within a new or existing retail center
We own the land and building which our Mahtomedi location and corporate office reside
Our two new locations are changing our new store paradigm in volume and profitability
We look to duplicate the Highland Park location in St. Paul
In first four months sales are triple our past typical new store numbers
This store will likely profit in its first year
We are looking to relocate our Dundas store in the general area
We are looking to duplicate our Highland Park/St. Paul location performance in Blaine
I will leave you one visual that sort of sums up the passion, fun, and possibility in our business…this was our 2007 holiday card that went to all customers. It had two separate offers and directed them to bring it in for their free gift which was a dry erase board.
I would like to read a short note from a customer which illustrate who we are…
Note from 015
We enjoy the current state of business results because we stay true to our mission
At Chuck & Don’s we care about pets, people, and doing the right thing.
