OPERATIONS

Raley’s expands space optimization capabilities with Adata

BY Marianne Wilson

Atlanta — Aldata announced that Raley’s Family of Fine Stores, a California-based supermarket chain, has expanded its use of Aldata Space Automation to create and maintain category- to store-specific planograms for high-volume categories, and, in turn, enable broader vendor collaboration.

With the addition of the Aldata solution, Raley’s expands its existing space optimization capabilities, which already includes Aldata’s shelf planning and web publishing modules, to better enable the company to reduce inventory carrying costs, decrease out of stocks, improve productivity and increase sales.

“With multiple supermarket chains operating throughout Northern California and Nevada, Raley’s needed to move beyond manual planogram creation in order to support high-volume categories across multiple stores,” said Rick McGill, space optimization manager for Raley’s, West Sacramento, Calif., which operates stores under several banners. “With Aldata Space Automation, everyone on our schematic team has software to automate planograms and achieve a much more granular approach to category management than ever before.”

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Worst state for business is where Target has most stores

BY CSA STAFF

Target has done quite well for itself in California, but that doesn’t mean it’s been easy. Ironically, the state with the most extensive network of Target stores also happens to be the one identified as the worst state in which to do business, according to a recent survey.

At the end of the most recent fiscal year, Target operated 252 of its 1,763 stores in California, or a little more than 14% of its entire store base. Despite this extensive footprint, the nation’s most populous state is the one 650 CEOs ranked as the worst state in which to do business, according to a survey conducted by Chief Executive magazine.

CEOs who participated in the survey said California’s poor ranking is the result of its hostility to business, high state taxes and overly stringent regulations, which is driving investment, companies and jobs to other states.

After California, other states who scored poorly were New York, Illinois, Massachusetts and Michigan. Conversely, the best state for business was Texas, a distinction it has received for eight consecutive years. Target operates 148 stores in Texas. It was followed by Florida, North Carolina, Tennessee and Indiana.

“CEOs tell us that California seems to be doing everything possible to drive business from the state. Texas, by contrast, has been welcoming companies and entrepreneurs, particularly in the high-tech arena,” said J.P. Donlon, editor-in-chief of Chief Executive. “Local economic development corporations, as well as the state Texas Enterprise Fund, are providing attractive incentives. This, along with the relaxed regulatory environment and supportive State Department of Commerce adds up to a favorable climate for business.”

The survey was conducted Jan. 24 through Feb. 26 and complete results, including individual state rankings on multiple criteria and methodology details are available at ChiefExecutive.net.

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Target kisses Kindle goodbye, but could gain sales in the process

BY CSA STAFF

Retailers are in business to sell products customers want, except when they’re not, which appears to be the case with the retailer’s decision to stop selling Amazon.com’s hugely popular Kindle devices.

The Kindle was a coup of sorts for Target when it began offering the device in 2010. The e-reader was a hot new item, and the fact that it was available at Target brought the retailer the type of cache it works so hard to cultivate. But then the device outlived its usefulness and a website called “The Verge” this week reported Target would stop carrying the Kindle. The story was widely picked up because, let’s face it, a Target versus Amazon plot line has plenty of intrigue and makes for a good contrast between an old economy, conventional retailer and an e-commerce innovator. The plotline becomes more intriguing when you factor in that Amazon used to operate Target’s e-commerce business and after the two separated Target flubbed the relaunch of its website last fall.

Predictably, the news spawned a lot of commentary about what was the company thinking in the first place when it agreed to carry the Kindle. Especially since Target was offering those who purchased the device a superior way to access Amazon’s assortment and superior website experience.

Good point, except a similar argument could have been made decades ago when Target began selling telephones, a device that enabled customers to order from the Sears or JCPenney catalog. Or more recently, within the past few decades anyway, with the advent of laptop computers and the Internet, every time Target sells a PC it facilitates shoppers’ ability to complete largely tax free transactions on the Internet. The same thing could be said about such Apple products as the iPad or iPhone, which offer a fantastic user experience, access to the iTunes stores and countless other e-commerce opportunities, all of which compete with Target and Target.com.

What made the Kindle different and why Target was wise to dump the device is that it is essentially a loss leader for Amazon in the true spirit of Gillette’s classic razor and blades example, where the razors are essentially free in order to promote consumption of the blades. Kindles aren’t exactly free, but Amazon’s strategy, which Target facilitated, was and is to get the devices into the hands of as many people as possible because the company makes money off the content and products purchased through the device as opposed to the device itself.

It’s also worth noting that Target chairman, president and CEO Greg Steinhafel servs as chairman of the Retail Industry Leaders Association or RILA, a group arguing passionately for legislation know as the Main Street Fairness Act which might as well be called Make Amazon Collect Sales Tax Act.

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