BI-LO, LLC recently completed the implementation of SoftGrocer and ChainTrack HQ price- and item-management software from SofTechnics, Akron, Ohio. ChainTrack HQ will help the Greenville, S.C.-based chain automate its pricing process. Meanwhile, SoftGrocer is replacing BI-LO’s legacy receiving and in-store price-management systems. This move will support the chain’s POS, shelf-label printing and scale-management applications. DSD receiving will also be added to the mix to improve the speed and accuracy of BI-LO’s receiving process.
Penn Traffic Co. renewed its license for DemandTec’s consumer-centric merchandising solution. Penn Traffic will also add the San Carlos, Calif.-based vendor’s sales and marketing software. By completing the implementation of the DemandTec Price module later this year, Penn Traffic plans to grow margins within selected store-product categories. The chain is also currently testing DemandTec Promotion to more efficiently manage promotions with vendor partners and improve the effectiveness of each executed campaign. The grocer plans to launch the module this month.
Tesco, Cheshunt, England, recently earned the Retail Week Customer Service Initiative of the Year award for its efforts to streamline the checkout experience. The Retail Week Awards are called the most prestigious awards ceremony within the U.K. retail industry.
Using SMARTLANE queue-busting camera technology, developed by IRISYS, Tesco is slashing the time shoppers wait on line to check out. Infrared sensors mounted above checkout lanes detect the number and behavior of customer groups at each checkstand.
The sensors calculate the average queue length, average wait time and overall store performance against Tesco’s One-In-Front (OIF) customer-service benchmarks. The retailer’s management team uses this data to deploy staff.
By keeping queue waiting time to a minimum, Tesco is experiencing more throughput at the front end, and boosting in-store profits, according to Sir Terry Leahy, CEO of Tesco.
Oil, gas and petrochemical company BP will run more than 27,000 of its petrol stations, convenience stores and quick-service restaurants across 18 countries with the help of StorePoint store and fuel software applications from Retalix.
StorePoint will replace the company’s disparate, and in some cases, outdated systems and provide a consistent, global framework across BP’s entire retail operation, helping the company reduce its operating costs.
The company began deploying the solution to stores in Australia in February. All BP company-owned retail stores across the globe will adopt the solution within three years.
Weekly Retail Fix
THE NEWS: SAM’S REALIGNS STORE-LEVEL MANAGEMENT
BENTONVILLE, ARK. Sam’s Club is changing the management structure in its stores. In the realignment, approximately 250 positions will be eliminated, Wal-Mart Stores announced last week. The company said it’s replacing five lower level management positions at each Sam’s Club location with three new higher level and higher paying assistant manager positions. —
“This is not a cost cutting effort. We expect a slight increase in payroll upon completion of this change,” said Sharon Orlopp, senior vp of Sam’s people division.
THE FIX: Differentiation would better help Sam’s
Since Sam’s decided that its refocus on the business customer was too narrow, it has sought to find ways to make its clubs more attractive to primary shoppers, i.e., women. And that’s a pretty tough row to hoe, as Costco has done a pretty good job at satisfying the club customer in general and BJ’s has been going after female shoppers for several years now, with some success.
Having fewer managers with more direct responsibility could create a tighter knit club-level management and shorten lines of responsibility and accountability. Yet, without differentiating the offering, execution isn’t going to overcome all of Sam’s challenges.
That being said, a store-level management realignment might be overlooked at other retailers, but, this being Wal-Mart, everyone has to make a big deal about it. But that’s the price you pay as the big guy on the block.
Weekly Retail Fix
THE NEWS: TOYS ‘R’ US EARNINGS GAIN 40.1%
WAYNE, N.J. Toys “R” Us today posted net earnings of $199 million for its critical fourth quarter, which meant it turned a profit for the fiscal year ended Feb. 3. But special charges and gains had an impact on its numbers. —
Sales for the previous fiscal annum were $142 million, the difference translating into a net earnings increase of 40.1% year over year. For the last fiscal year, Toys “R” Us posted net earnings of $85 million versus a net loss of $384 million for the previous period.
Operating earnings in the fiscal 2006 fourth quarter gained 53.1% to $571 million versus $373 million for the fourth quarter of fiscal 2005. For the last fiscal year, operating earnings were $649 million versus an operating loss of $142 million for the previous period.
THE FIX: Improved shopper experience ups comps
Of course, any observer has to take into consideration special financial circumstances. Fiscal 2006 operating earnings were positively impacted by $96 million from gains on property sales, slightly offset by restructuring and other charges. In fiscal 2005, operating earnings were negatively impacted by $410 million in costs relating to the merger of the company, as well as $58 million of costs and charges relating to contract settlement fees, restructuring and other charges.
Still, sales were trending up at last year’s end. Net sales gained 15.8% to $5.7 billion. In the full fiscal year, net sales advanced to $13 billion, up 15.2%.
Comparable-store sales for the Toys “R” Us’ U.S. division gained 0.6% in fiscal 2006, and that represents the division’s first comps increase in six years. Comps at Babies “R” Us were up 4.8% and those at Toys “R” Us international were up 2.6% for the fiscal year.
Jerry Storch, chairman and ceo of Toys “R” Us, said the company is “pleased with the strides we made in fiscal 2006 to improve at all levels of the organization and reposition the company for profitable growth over the long term.”
He said the company’s new management team has been focusing on executing a strategy that would turn the retailer into a global toy and baby products authority.
“This translated into higher overall sales, positive comparable-store sales, improved gross margins and strong operating earnings growth for the 2006 fiscal year,” Storch asserted. “The key to our strategy has been improving the customer shopping experience in our stores. We are accomplishing this by delivering a more compelling merchandise selection, better service and a cleaner and more comfortable shopping environment.”