chris burns director of sales “finding strength in change”

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DeCA/ALA Conference May 24, 2011 Chris Burns Director of Sales “Finding Strength in Change”

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Page 1: Chris Burns Director of Sales “Finding Strength in Change”

DeCA/ALA ConferenceMay 24, 2011

Chris BurnsDirector of Sales

“Finding Strength in Change”

Page 2: Chris Burns Director of Sales “Finding Strength in Change”

Agenda

• Economy and Category Trends– Inflation– Top Categories

• Sales and Savings– Sales and Transactions, Top 40 Stores, Tobacco– Basket Size– Guard and Reserve Sales– Coupons, SNAP, WIC and Savings

• Consumer Trends– Shopping Patterns– Consumer Behaviors

• Focus and Opportunities– Goals– Initiatives and Campaigns

2

Page 3: Chris Burns Director of Sales “Finding Strength in Change”

Economy &Category Trends

Page 4: Chris Burns Director of Sales “Finding Strength in Change”

212

214

216

218

220

222

224

Oct

No

v

Dec

Jan

Feb

Mar

Ap

r

May

Jun

Jul

Au

g

Sep

FY 2010

FY 2011

1.44%1.74% 2.14%

1.68% 2.85%3.62%

CPI Food at Home Monthly Compare

FY 2011 vs. FY 2010• FY 2011 (Oct-Mar) average CPI Food at Home Inflation was 2.25%, it was 2.87% for CY 2011 (Jan-Mar). • CY 2011 (Jan-Dec) food at home inflation is now forecast to be 3.5% to 4.5% by USDA Economic Research Service

CPI F

ood

at H

ome

Inde

x Va

lue

Note: Data from Bureau of Labor Statistics (BLS) Consumer Price Index Food at Home. Baseline for the index is 1982-1984=100

4

Page 5: Chris Burns Director of Sales “Finding Strength in Change”

Staple Item Average Price Compare April 2011 vs. April 2010

All items in both years meeting item grouping and size stipulations included – due to adds and deletes they may not be exact same UPCs in both years. Also, between years the

particular amount bought of each UPC in each group varies. Product promotions may also impact comparison.

Item Size2010 April Avg. Price

2011 April Avg. Price

Change % Change

Butter 16 oz $2.36 $2.96 $0.60 25.20% Milk 128 oz $2.81 $3.26 $0.45 15.92% Coffee Canned Regular 34.5 oz $6.04 $6.98 $0.94 15.60% Bologna - Non Pegged 16 oz $1.75 $1.98 $0.22 12.77% Honey 32 oz $4.50 $5.03 $0.53 11.80% Sugar Granulated White 64 oz $2.41 $2.59 $0.18 7.48% Rice Plain Dry 80 oz $3.79 $4.01 $0.22 5.91% Franks – Beef 16 oz $2.21 $2.31 $0.10 4.73% Spaghetti Thin 16 oz $0.94 $0.97 $0.04 3.74% Bread White 20 oz $1.64 $1.70 $0.06 3.68% Ice Bagged 160 oz $1.56 $1.60 $0.04 2.60% Vinegar 128 oz $2.28 $2.33 $0.05 2.22% Cheese Sliced 16 oz $2.86 $2.90 $0.04 1.54% Bacon 16 oz $2.41 $2.44 $0.03 1.04% Flour 80 oz $2.07 $1.94 -$0.13 -6.27% Green Beans (All types) 14.5 oz $0.82 $0.74 -$0.08 -9.81%

5

Page 6: Chris Burns Director of Sales “Finding Strength in Change”

Top 20 Categories by Sales Information

Sales Rank

CategoryDeCA Sales in

$ Millions (52 Wks ending 04/30/2011)

DeCA % Sales

Change

Industry % Sales Change

DeCA Savings %

1 Cheese $106.0 6.9% 0.2% 34.6%

2 Cigarettes $105.2 -11.7% -7.8% 12.5%

3 Salted Snacks $98.5 -5.1% 1.2% 24.9%

4 Soft Drinks $87.8 -5.2% -3.2% 9.4%

5 Milk $86.5 7.2% -2.0% 26.5%

6 Fresh Bakery $84.1 -3.8% -0.8% 30.9%

7 Frozen Entrees $76.3 -2.8% 4.6% 25.0%

8 Rte Cereal $76.2 -6.7% -3.2% 19.8%

9 Dog Food $74.9 1.1% -0.9% 24.3%

10 Toilet Paper $69.0 2.2% -3.7% 15.0%

Source: Nielson RMS6

Page 7: Chris Burns Director of Sales “Finding Strength in Change”

Top 20 Categories by Sales Information (cont.)

Sales Rank

CategoryDeCA Sales in $

Millions (52 Wks ending 04/30/2011)

DeCA % Sales

Change

Industry % Sales

Change

DeCA Savings %

11 Fresh Vegetable & Herb $66.7 9.5% 4.0% 24.6%

12 Coffee $65.3 8.5% 0.4% 23.2%13 Shelf Stable Juices & Drinks $64.2 -2.4% -1.6% 20.0%14 Candy $62.5 3.6% 4.1% 26.0%15 Laundry Detergent $58.9 -4.7% -5.8% 16.4%16 Lunchmeat $52.6 -0.9% -0.6% 41.8%17 Shelf Stable Vegetable $50.3 -3.0% 1.5% 29.0%18 Fresh Fruit $49.0 13.0% 6.0% 16.5%19 Crackers $46.0 1.7% 1.3% 23.6%20 Oral Hygiene $42.1 1.3% 3.2% 23.3%

Source: Nielson RMS7

Page 8: Chris Burns Director of Sales “Finding Strength in Change”

Top 20 Categories by Sales Unit Information

Sales Rank

Category

DeCA Units in Millions

(52 Wks ending 04/30/2011)

DeCA % Unit Change

Industry % Unit

Change

DeCA Savings

%

1 Cheese 43.2 0.0% 0.2% 34.6%2 Cigarettes 3.0 -15.5% -7.8% 12.5%3 Salted Snacks 48.3 -2.3% 1.2% 24.9%4 Soft Drinks 43.9 -6.2% -3.2% 9.4%5 Milk 38.2 -1.6% -2.0% 26.5%6 Fresh Bakery 45.6 -1.6% -0.8% 30.9%7 Frozen Entrees 25.6 -2.5% 4.6% 25.0%8 Rte Cereal 30.6 -4.0% -3.2% 19.8%9 Dog Food 24.1 -2.2% -0.9% 24.3%

10 Toilet Paper 12.3 -1.5% -3.7% 15.0%

Source: Nielson RMS8

Page 9: Chris Burns Director of Sales “Finding Strength in Change”

Top 20 Categories by Sales Unit Information (cont.)

Sales Rank

Category

DeCA Units in Millions

(52 Wks ending 04/30/2011)

DeCA % Unit Change

Industry % Unit

Change

DeCA Savings %

11 Fresh Vegetable & Herb 42.5 10.0% 4.0% 24.6%

12 Coffee 12.9 2.3% 0.4% 23.2%

13 Shelf Stable Juices & Drinks 28.4 -4.9% -1.6% 20.0%

14 Candy 36.3 3.9% 4.1% 26.0%

15 Laundry Detergent 8.2 -3.9% -5.8% 16.4%

16 Lunchmeat 24.2 0.9% -0.6% 41.8%

17 Shelf Stable Vegetable 50.4 -2.6% 1.5% 29.0%

18 Fresh Fruit 18.5 14.2% 6.0% 16.5%

19 Crackers 22.3 1.9% 1.3% 23.6%

20 Oral Hygiene 15.3 -1.0% 3.2% 23.3%

Source: Nielson RMS9

Page 10: Chris Burns Director of Sales “Finding Strength in Change”

Sales & Savings

Page 11: Chris Burns Director of Sales “Finding Strength in Change”

5.80

5.475.34 5.28

5.10

4.90 4.955.04 5.04

4.965.04

5.245.37 5.42

5.54

5.815.98

5.84

4.5

5

5.5

6

6.5

FY93

FY94

FY95

FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

$ B

illio

ns

-3.7%

-5.6%-2.3%-1.2%

-3.9% +0.9%

+1.9% -0.0% -1.5% +1.5%

+3.9%

363385 332Stores 313 308 299 296 292 290 281 276 275

+2.5%

273

-3.3%

+0.9%

+2.2%

+5.0%

+2.9%

268 264 254260 252

-2.28%

Commissary Sales FY 1993 thru FY 2010

11

DeCA began operations on October 1, 1991 with 411 stores and had sales of $6.02 Billion its very first year (FY 1992)

Page 12: Chris Burns Director of Sales “Finding Strength in Change”

115.7

110.3

104.6 103.7

97.2

92.393.3 93.5 93.9

91.592.6

94.3 94.492.48

91.4792.94

94.75 94.79

90.0

95.0

100.0

105.0

110.0

115.0

120.0

FY93

FY94

FY95

FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

Mill

ions

-4.6%

-5.2%-0.8%

-6.3%

-5.1% +1.1% +0.2% +0.5%

-2.5% +1.2% +1.8%

363385 332Stores 313 308 299 296 292 290 281 276 275

+0.1%

273 268

-2.1% -1.1% +1.6%

+1.9%

264 260 254 252

+0.04%

Commissary Customers FY 1993 thru FY 2010

12

Page 13: Chris Burns Director of Sales “Finding Strength in Change”

Monthly Sales Comparison

MonthFY 2009

Sales in $ Millions

FY 2010 Sales in $ Millions

% Change FY2010 vs.

FY2000Comments

FY 2011 Sales in $ Millions

% Change FY 2011 vs.

FY 2010Comments

OCT $514.5 $511.5 -0.6%

FY 2010 with deflation was

essentially down all months vs. FY 2009. The only month up was

December 2009, due to the

commissaries being closed an

extra Federal Holiday around Christmas 2008 (Dec. 26, 2008)

$510.3 -0.23%

Transaction growth,

inflation and prior year

comparisons should help growth to continue

NOV $526.6 $487.2 -7.5% $485.5 -0.35%

DEC $522.8 $527.9 1.0% $532.2 0.81%

JAN $512.9 $492.3 -4.0% $478.4 -2.82%

FEB $458.1 $450.4 -1.7% $454.8 0.98%

MAR $493.9 $483.7 -2.1% $501.7 3.71%

APR $485.7 $479.7 -1.2% $499.4 4.10%

MAY $524.5 $500.1 -4.6% TBD TBD

JUN $467.6 $460.6 -1.5% TBD TBD

JUL $491.0 $490.4 -0.1% TBD TBD

AUG $489.5 $477.0 -2.5% TBD TBD

SEP $493.9 $483.8 -2.0% TBD TBD

13

Page 14: Chris Burns Director of Sales “Finding Strength in Change”

DeCA FYTD Sales and Transactions thru April 2011 vs. Prior Year

Sales FY 2011 FY 2010 $ Difference % Change

DeCA East $1,624,355,666 $1,601,989,470 $22,366,196 1.40%

DeCA Europe $301,102,238 $301,868,316 -$766,078 -0.25%

DeCA West $1,536,782,435 $1,528,836,984 $7,945,452 0.52%

DeCA Total $3,462,240,339 $3,432,694,769 $29,545,569 0.86%

Transactions FY 2011 FY 2010 # Difference % Change

DeCA East 23,684,260 23,337,100 347,160 1.49%

DeCA Europe 6,766,668 6,572,717 193,951 2.95%

DeCA West 25,162,209 24,898,605 263,604 1.06%

DeCA Total 55,613,137 54,808,422 804,715 1.47%

Note: Data as of April 10, 2011 – may change slightly as stores finalize VRGC records14

Page 15: Chris Burns Director of Sales “Finding Strength in Change”

DeCA Basket Size by Fiscal Year

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011$50

$52

$54

$56

$58

$60

$62

$64

$53.02$53.90$53.62

$54.22$54.39$55.50

$56.86

$58.57

$60.54

$62.55$63.12$62.63$62.26

Note: FY 2011 Basket Size is thru April 201115

Page 16: Chris Burns Director of Sales “Finding Strength in Change”

Sales Per Transaction by Region & CONUS/OCONUS thru April 2011 vs. Prior Year

Region or Area 2011 2010 $ Change % Change

DeCA East $68.58 $68.65 -$0.06 -0.09%

DeCA Europe $44.50 $45.93 -$1.43 -3.11%

DeCA West $61.08 $61.40 -$0.33 -0.53%

CONUS + AK + HI + PR $65.80 $66.00 -$0.20 -0.30%

Pacific Theatre $52.81 $52.47 $0.34 0.64%

Europe + Pacific Theatre $47.62 $48.36 -$0.74 -1.53%

DeCA Total $62.26 $62.63 -$0.37 -0.60%

16

Page 17: Chris Burns Director of Sales “Finding Strength in Change”

DeCA Tobacco Sales History

$0

$50

$100

$150

$200

$250

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Fiscal Year

$ Sa

les i

n M

illio

ns

October thru March (6 Months) Full Fiscal Year

17

Page 18: Chris Burns Director of Sales “Finding Strength in Change”

Coupons

Fiscal Year (thru

April)

Coupon Quantity

Coupon Dollars

Average Coupon

Amount

FY 2011 71,120,121 $64,635,188 $0.91

FY 2010 76,529,157 $66,918,238 $0.87

FY 2009 69,707,437 $57,903,634 $0.83

Note: Data fiscal years through April 3018

Page 19: Chris Burns Director of Sales “Finding Strength in Change”

FY 2011 (thru April)

FY 2010 (thru April)

Change % Change

SNAP $ Sales $49,789,310 $40,529,842 $9,259,468 22.85%

SNAP Transactions 483,946 394,050 $89,896 22.81%

SNAP $ per SNAP Transaction $102.88 $102.85 $0.03 0.03%

         FY 2011

(thru April)FY 2010

(thru April)Change % Change

WIC $ Sales $17,060,860 $17,277,497 -$216,637 -1.25%

WIC Transactions 1,015,090 1,040,442 -$25,352 -2.44%

WIC $ per WIC Transaction $16.81 $16.61 $0.20 1.21%

SNAP and WIC Trends (FYTD 2011 thru April 2011 vs. Prior Year)

19

Page 20: Chris Burns Director of Sales “Finding Strength in Change”

Customer Savings

• Updated savings figures for commissary shoppers based on FY 2011 (thru Mar) USDA figures for retail grocery store food purchases consumed at home

• 31.5% food and nonfood ANNUAL savings:– FAMILY of FOUR saves $4,434

– FAMILY of THREE saves $3,461

– A COUPLE saves $2,801

– SINGLES saves $1,528

20Note: 2011 Price Comparison Survey results will be available October 2011

Page 21: Chris Burns Director of Sales “Finding Strength in Change”

Consumer Trends

Page 22: Chris Burns Director of Sales “Finding Strength in Change”

1. The consumer is in control2. Consumer connectivity is the global DNA3. Increasing polarization4. Closely monitor volatile economic

environment5. Global perspective & local expertise6. Reframe categories based on need states7. Deliver holistic value equation8. Flawless fundamental execution9. Innovation, innovation, innovation10. Sharpen targets and targeting

2011 Roadmap

22

Page 23: Chris Burns Director of Sales “Finding Strength in Change”

Weekly Dollars Per Gallon – Regular Gas

$1

$2

$3

$4

$5

Source: U.S. Energy Information Administration; Weekly U.S. Regular All Formulations Retail Gasoline Prices (Dollars per Gallon)

$4.11 week ending 7/7/2008

$3.79 week ending 4/11/11

Monthly HH Impact: $0.10 increase $10.50 $0.50 increase $52.50

Monthly Household Expense Impact:

• $.10 increase: $10.50 • $.50 increase: $52.50 • $1.00 increase: $105• $2.00 increase: $210

Basis: household w/2.1 cars, driving 1,000 miles per month & getting 20 miles per gallon

23

Page 24: Chris Burns Director of Sales “Finding Strength in Change”

23.3%

76.7%

3.4

22.3

3.1

4.4

18.6

10.2

3.1

23.3

3.3

4.3

17.2

10.9

Exchanges

Total Grocery

Total DrugStores

Total MassMerch w/o

Supers

TotalSupercenters

TotalWarehouse

Clubs

2009

2010

+0.74

Commissary All-Output $ Share in…

Remaining,

Commissary,

Commissary All-Output Dollar Loyalty % of Commissary All-Outlet $

DeCA shoppers spend more in commissaries than in any other specific channel

Source: Nielsen Homescan 2010 Cross Outlet Facts 24

Page 25: Chris Burns Director of Sales “Finding Strength in Change”

19.8

2.5

4.6

3.6

4.0

1.8

18.3

2.6

4.9

4.2

4.5

1.4

Wal-Mart Total (US)

Target Total (US)

Sam's (US)

Kroger Grocery Corp(US)

Costco (US)

Safeway (US)

2009

2010

Loyalty for commissaries increased and Walmart gets less of patron’s dollars!

Commissary All-Output Dollar Loyalty % of Commissary All-Outlet $

Source: Nielsen Homescan 2010 Cross Outlet Facts

23.3%

76.7%

+0.74

Remaining,

Commissary,

Commissary All-Output $ Share in…

25

Page 26: Chris Burns Director of Sales “Finding Strength in Change”

Commissary Wal- MartDIV1+Super

Total DrugStores

Target -Total

Sam's Exchange KrogerGrocery-

Corp

Costco Safeway

26.8

11.3

7.0 9.5 10.620.7

10.816.615.6

25.4

11.3

6.9 9.3 8.319.1

10.316.116.2

Commissary Wal-MartDIV1+Super

Total DrugStores

Target- Total Sam's Exchange KrogerGrocery-

Corp

Costco Safeway

2009 2010

Source: Nielsen Homescan 2010 Cross Outlet Facts 26

Commissary Shopper’s (1,700) Frequency and Basket Size

Commissary shoppers reduced trips to commissaries and other retailers

Frequency (Number of Trips)

Basket Size in…

Page 27: Chris Burns Director of Sales “Finding Strength in Change”

46.9%

52.7%

6.0

10.5

1.5

3.7

11.2

8.7

4.1

11.8

2.0

3.7

11.8

8.0

Exchanges

Total Grocery

Total DrugStores

Total MassMerch w/o

Supers

TotalSupercenters

TotalWarehouse

Clubs2009

2010

+0.4

Source: Nielsen Homescan 2010 Cross Outlet Facts

Commissary,

Remaining,

Commissary All-Output $ Share in…

Heavy Commissary Shopper Dollar Loyalty

27

Page 28: Chris Burns Director of Sales “Finding Strength in Change”

8.2%

91.9%

1.7

29.8

4.2

4.9

23.3

11.2

2.4

30.5

4.1

4.6

20.6

12.8

Exchanges

Total Grocery

Total DrugStores

Total MassMerch w/o

Supers

TotalSupercenters

TotalWarehouse

Clubs

2009

2010

-0.3

Light shoppers share is 2x in Wal-Mart compared to heavy shoppers

Commissary All-Output $ Share in…

Source: Nielsen Homescan 2010 Cross Outlet Facts

Light Commissary Shopper Dollar Loyalty

Commissary,

Remaining,

28

Page 29: Chris Burns Director of Sales “Finding Strength in Change”

• We are on track! Share of Wallet is good (23.3%), customer loyalty = high, and Wal-Mart is getting less of our Patron’s dollars - Continue to offer club packs in prominent locations- Focus on destination categories (milk, bread etc.)

• Greatest cross-spending threat in Club Stores & Kroger increased loyalty- Continue to offer club packs in prominent locations

- Identify top selling items in Club stores: What attracts our customers?- Monitor pricing at competition

• Focus on Light Shoppers: Give them a reason to come back• Losing light shoppers to Club stores and other grocery- Focus on frequency drivers (perishables, pet food)

• Communicate value and benefits: Your Commissary … It’s Worth the Trip!

Opportunities from Nielsen Homescan Data

29

Page 30: Chris Burns Director of Sales “Finding Strength in Change”

Focus &Opportunities

Page 31: Chris Burns Director of Sales “Finding Strength in Change”

31

Sales Growth Goals/Initiatives

Stretch Goal: $6B Sales in FY 2012• Develop & monitor stretch sales goals for each category –

volume build plan• Category reviews cut back by 50%

- Category reviews at strategic right time, speed to shelf with new items and planograms (within 60 days) are key

• Promotional compliance is a must – contributes 1.7% to total savings

• Closely review category & sku indexing- 85% of items move between 2 (small store) & 4 units per day

• Implement planograms for store demographics – regional items play - delineate proper shelf allocation

Page 32: Chris Burns Director of Sales “Finding Strength in Change”

32

Sales Growth Goals/Initiatives (cont.)

Stretch Goal: $6B Sales in FY 2012• Increase meat & produce department sales thru cross

merchandising efforts – perishable & perimeter departments continue to be key

• Monitor produce promotional executions – collaboration with Industry partners works very well!

• Execute promotional dollars more effectively – less 45 day pricing

• Expand Deli on-line service• Deploy Guard/Reserve pre-order/pre-pay system• Deploy internet shopping strategy

Page 33: Chris Burns Director of Sales “Finding Strength in Change”

May Case Lot Sale (Photo from San Diego Commissary )

33

Page 34: Chris Burns Director of Sales “Finding Strength in Change”

34

Patron Savings Goals/Initiatives

Stretch Goal: 32% Savings in FY 2012

• Develop & monitor stretch savings goals – volume build plan– All categories to include meat, produce and direct

store delivery items (soda, bread, chips, etc.)• Expand mandatory end cap program• Refine promotion program

– Review 1st of month promotions

Page 35: Chris Burns Director of Sales “Finding Strength in Change”

35

Transaction Growth Goals/Initiatives

Stretch Goal: 100M Transactions in FY 2012

• Deploy Loyalty Card

• Market to singles & 4 to 6 PM customers• Capture the “mother” fulltime – baby aisle strategy

is key

• Capture 1st of the month shopper

• Collaboration with Exchanges, MWR/Services

Page 36: Chris Burns Director of Sales “Finding Strength in Change”

Meat Initiatives

36

Current • Developing a core item assortment (category re-

alignment, merchandising displays, etc.)• Creating a “Go Lean With Protein” section• Expansion of Fresh Seafood Road Shows (targeting

domestic / regional products)

Future• Test yield based “Like Pricing” within zones• Employ in-store cooking demonstrations geared towards

healthier solutions

Page 37: Chris Burns Director of Sales “Finding Strength in Change”

Build a Better Burger (Photo from Fort Lewis Commissary Display)

37

Page 38: Chris Burns Director of Sales “Finding Strength in Change”

Produce Initiatives

• Worldwide Farmer’s Market (July 1-3)– Collaborative efforts with your Exchange– Create fun, excitement & savings– Stores to assist with planning details

• Health & Wellness Focus in Produce– Targeting Seniors = Display Period 14 (Aug 4-24)– Targeting Service Members = Display Period 19 (Oct 20-Nov 2)

• Standard Potted Plant Program through Attrition− Guaranteed sales & services

38

FYTD 2011 (thru April) Produce sales are over $275M –up 2.97% vs. prior year

Page 39: Chris Burns Director of Sales “Finding Strength in Change”

Produce Initiatives (cont.)

39

Display contests create excitement for our customer & can increase your sales!Sample results for one contest:2011 Easter Plant Program+20.6% Units +38.4% DollarsCompared to Easter Plant Program 2010

Page 40: Chris Burns Director of Sales “Finding Strength in Change”

Signage Re-fresh

• Cooperative Initiative With Industry– Effective June 1, 2011 for industry and 1st quarter 2012 at stores– 3 types of signs: Extra Savings, Everyday Savings, and Hot New Item –

Looking to add a 4th sign for under 20% savings– Communicate the value and savings of the benefit– New fresh, clean looking signs– Clear top that can be placed over ESL’s (no more clips or straps)– Increased durability– No more curling in refrigerated cases– Industry Standard

40

Page 41: Chris Burns Director of Sales “Finding Strength in Change”

• Background:– DeCA has selected M-Dot and is working towards finalizing

an agreement• Benefits:

– Program to generate additional savings via digital coupons– Reduces fraudulent coupons– Reduces redemption errors

• Moving forward:– To participate, Industry must partner directly with M-Dot

Network directly – contact info available in NTT – Estimated program deployment: 1st Quarter FY 2012

Loyalty Card/Digital Coupons

NTT 11-45, Loyalty Card/Digital Coupon, dated February 25, 201141

Page 42: Chris Burns Director of Sales “Finding Strength in Change”

Swell Allowance Program

• What is the Swell Allowance Program?– A program to reduce the number of written unsalable Vender Credit

Memo’s– Specific items are covered under the Swell Allowance Program– Direct Store Deliveries– Every company has a different Swell Allowance deducted

• How is the Swell Allowance Percent calculated?– Total dollar number of all deliveries– Total dollar number of all unsalable VCM’s written

Points of ContactMarye A. Carr [email protected] 804-734-8000 x52781Jim Keeton [email protected] 804-734-8000 x48935

42

Page 43: Chris Burns Director of Sales “Finding Strength in Change”

Future Sales Campaigns

• Family Fun Fitness Festival (mid Apr – mid Jun)• World Wide Farmers Market (July 4th weekend)• Back to School Bonanza (Jul/Aug Promo)• Your Family is our Family (Aug/Sep Promo –

ongoing)• Gift & Loyalty Card Programs (Summer & Fall)• It’s Your Choice – Make It Healthy! (Sep/Oct

Promo – ongoing)• Commissary’s 20th Anniversary (Oct-Sep)

43

Page 44: Chris Burns Director of Sales “Finding Strength in Change”

Collaborative Efforts

• Joint/Cross Marketing (AAFES)– “Free” print advertising & in-store radio spots

• Joint Sales Events– Expansion of DeCA’s Case Lot Sale in May 2010 into the Family

Fun Fitness Festival– Guard/Reserve On-Site activities

• Communication of the Benefit– Cross promotions, merchandising, couponing, and coordination

of promotion themes & dates• Shared Distribution (Europe & Guam)• Food for Thought Program (DoD Schools in Germany)

44

Page 45: Chris Burns Director of Sales “Finding Strength in Change”

• Sallie Cauthers, Marketing & Mass Communication Specialist, recently joined the Sales Directorate Team– Main focus is to work with our industry partners and the field to

drive promotional programs• Tested and deployed the Deli-Online ordering system at the

Fort Lee Commissary – testing will go through 30 June 2011• Guard/Reserve Pre-Order/Pre-pay - Tested & passed final

iteration – Will deploy once system security requirements have been met -

goal to test live by end of FY

On-Going Initiatives

45

Page 46: Chris Burns Director of Sales “Finding Strength in Change”

• Automation of Container Redemption Value (CRV) Receiving, Reporting – Effective May 16th– FDS and DSD Rollups will display and print CRV totals for each billing period– Will create efficiencies at the stores and improve reporting accuracy, thereby

decreasing costly CRV related vendor disputes– The commissaries affected by this release are only those subject to container

deposit laws in Hawaii, California, Connecticut, Maine, Massachusetts, Michigan, and New York

• Vendor Promotion Price Locking (VPPL)– Acts as a virtual checkpoint between DeCA’s Electronic Data Interchange (EDI)

pricing system, the master catalog, and the promotional management system, improving pricing integrity and decreasing bill paying discrepancies

– July/August timeframe to begin seeing EDI 824 (Application Advice Transaction Set) – communicates promotional price compliance

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On-Going Initiatives (cont.)

Page 47: Chris Burns Director of Sales “Finding Strength in Change”

• Identify:– Give advance notice of heavily

couponed items– National advertising– Spot BOH discrepancies– Reduce mis-picks and shortages– Follow-up with vendor stockers

• Warehouse Management– A fully loaded warehouse does not

equate to fully loaded shelves– Don’t over-commit to promotions

• Management Support– Coordinate promotional display

management between Grocery & CAOS

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• New Items, Phase Outs, NIS, Overwrites, Excess Stock– Should be CAO-driven process,

and provides an excellent opportunity to rethink allocation (beyond the item to the left & right of it)

– The customer is the ultimate authority on allocation

• BOH Management– Salvage is part of BOH until

processed– CAO does not have BOH visibility

for all items (e.g., shippers, pallet modules, case lot items)

CAO Best Practices

Page 48: Chris Burns Director of Sales “Finding Strength in Change”

• Sales: Continue to Help the Stores Drive Sales– THANKS for the shopper insights– Vendor stocking & collaborating with the Zone Manager and

Store Director are keys!– Ideas presented to the MBU for incremental sales are always

welcome for review

• Savings: Continue to “Sharpen Your Pencil” With Best Pricing– Commissaries need to be the only stop for our patrons!

• Patron Awareness: Continue to Assist in Getting the Word Out to Authorized Patrons– This benefit is relevant!

What Can Industry Do?

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Page 49: Chris Burns Director of Sales “Finding Strength in Change”

THANK YOU FOR ALL YOU DO TO SUPPORT OUR

VALUED PATRONS & THIS BENEFIT!!