Ok so today management calls me to the office to discuss product availability. So he tells me I need to back our ad better by not running out, now take into mind I only ran out the last day of the sale. My thing is this, with sale items you dont make any money I know it is with the hope they buy other things that are profitable but in most cases I see them buying only the meat items on sale. So what Im asking is does everyone agree that when they only do this dosent it kill your gross profit? Yet management is bitching about wanting the gross profit to be better ie...25%-30%. Yes I understand that when ordering extra sale items for the sale to insure you dont run out you can always make more money with it at regular price but with our customers they just walk on by when they see it costing more. We season and merchandise as much as possible but sometimes it just dont help then we are forced to take the lost. So that brings me back to the begining with them wanting product availability vs running out and not losing anything. Sorry for the rant i am just looking for opinions and advice.
-- Edited by Jason19991 on Thursday 28th of April 2016 09:57:02 PM
Jason you bring up several questions in your post. First of all let me say not knowing the size of your company I may be off a little with this reply. That being said we first have to look at the basics of retailing.
1) The customer is boss because without them there is no cash-flow. Need I say more about this?
2) There is a law on the books called bait and switch. By that I mean if you are going to advertise a sale item then you had better have the sale item. If not you should provide the "payee" (the customer) with a rain check.
3) Everybody runs out of sales items from time time. We are just humans. Yes it's true you can over order sale items to possibly make your g.p. look a little better next week but if you are a professional and you sound like you are, likewise you should never short sale items to protect g.p. either.
4) When gross profit projections are created they are created with non-sale items as well as sale items and an average is determined. This is the responsibility of the high grade level people. Not you.
5) You are not the owner of the store and you did not set up the advertising. Your job is to receive incoming merchandise, cut it and package it correctly under your companies policies and present such merchandise in the best possibly ways you know how to the "paying" public.
My advise to you is to do your job to the best of your ability and give the customer what he/she wants. Just let the cards fall where they fall. Keep the variety our there on more profitable items. Keep them displayed near the sale items if possibly. There have been sale items advertise since Mosses came down from the mountain with the tablets. You are not unique. Today me and the wife went to our local Food Lion because they had something on sale that the wife buys all the time. The item wasn't even a meat item it was a produce item that sells for a few bucks. We walked out of that store spending $40. Why/ Because that $3.00 item brought in the door!
I agree with Coalcracker you must do your best to stay in-stock on sale items and yet, we would all run out from time to time. My approach was to "buy-in" the sale item near the end of the week and try to make profit the following two weeks on the item. One of our best items to buy-in was Insides, then the following 2 weeks we could make a ton by even grinding them!
That said, I also managed some stores which were hopeless. The customers would go to each of 6 stores in the area and only buy what was on sale at each of them. In the end, those neighborhoods ended up with one or zero stores in their neighborhood because none of the stores could operate profitably.
Have some in the back but don't display it. If someone asks, get it for them. Show them a few, but not a lot. Pass the word on to the others. Have them do the same thing. PULL THE SIGN. Have it handy in case some a$$hole store manager, etc., wants to see it. It fell off. This way you don't run out and your gross will be better because some people will buy higher profit items. If you must have some in the counter, make as small a display as possible. I know this isn't possible in stores where they dictate where you may put ad items. Some want it in the large display at each end of your coffin counter.
I had a boss who did this and a few other dirty tricks, and he always had the best gross (out of 26 stores)
If you have steaks on sale, such a strips or shortloins you can try trimming a little less. I have mixed feelings about that as I liked to give 100% regardless of what the item is, but many of the people I worked with over the years did not give sales items as much attention as everything else. This both increased profit on that item as it had more fat on it and it mde it a little less attractive which led some customers to buying a full priced item instead. A lot of times sales items do not pay for all the attention you are giving them, so it might make more sense to do the bare minium with them and focus more on what is making you money. As the other said, it is just to get them in the door.
The actions you suggest parallel the way we operated when I worked for independents. When I went to the big chain it was NOT acceptable. We had a 1/8" trim standard and that applied whether or not the item was on sale. I came to accept that as not only the correct ethical choice but also the best for the overall business. None of the independent markets I managed did more than $20k weekly. When I went to the big chain which mandated pushing sale items my meat department averaged over $100k/week and definitely contributed more to the bottom line than the independent markets I managed even though the GP% was lower.
fdarn wrote:
If you have steaks on sale, such a strips or shortloins you can try trimming a little less. I have mixed feelings about that as I liked to give 100% regardless of what the item is, but many of the people I worked with over the years did not give sales items as much attention as everything else. This both increased profit on that item as it had more fat on it and it mde it a little less attractive which led some customers to buying a full priced item instead. A lot of times sales items do not pay for all the attention you are giving them, so it might make more sense to do the bare minium with them and focus more on what is making you money. As the other said, it is just to get them in the door.
The actions you suggest parallel the way we operated when I worked for independents. When I went to the big chain it was NOT acceptable.......................
Sometimes you have to do things that aren't acceptable
I have to respectfully disagree with most of these suggestions. Oh I've been guilty of pulling a sign or reducing a display on occasion when I was concerned I would run out, but ONLY then! I realize in different companies you must play the game and shoot for what management wants most. I was fortunate I guess in that our management saw the big picture. Many of our stores averaged over $1 million per week in this 150 store chain. This was in 1980 dollars.
GP DOLLARS are so much more important than GP % or Shrink %. Case in point, I was sent to manage a store in Delaware. The previous meat manager had the best shrink and best GP% in the company but they busted him. That meat dept. was only averaging $28k/week in a store that did $450k-$500k/week! When I got there it was easy to see what was going on. There was next to nothing in the case! And items on sale were pretty hard to find. This guy ran a pretty consistent shrink of 0.25% to 0.50%. Within 6 months I had this department averaging $80 k per week. I ran shrinks of 2.5% to 3%. GP% went from mid-thirties to mid-twenties, but GP DOLLARS tripled.
My next stop was a store that did over $1 million/week on a good week but only averaged about $850k/week. The meat dept. was not too badly run (IMO) but only averaged about $65k/week. Management asked me if I could give them a 20% increase in average volume. Once I had a handle on what was going on by walking the dept. and observing, I said "Sure, if you can handle a 4% shrink."
They told me absolutely yes. I explained that I was going to over-produce just about everything but still do our best to control losses. Again, in 6 months this dept. was doing between $85k and $100k/week. Keep in mind that at Pathmark, sales of seafood, luncheon meats/cold cuts, cheeses, hot dogs, canned hams, bacon, etc all were NOT in the meat dept.; only fresh meat and poultry were. This was because dairy and deli clerks made much less than meat cutters. Funny thing though, after a year or so of doing $85k-$100k/week and doubling GP dollars, all of a sudden a 3.8% to 4% shrink DID become a problem to them!
My next stop was a department that was pretty well run but had a shrink problem averaging over 5% shrink but pretty good otherwise. That was pretty easy, back to the basics, to get things back in order.
Anyway, what I want to convey, based only on my experience, is that you must give the customer choices and variety. If they have the choice of choosing 1 to 3 or 4 of any item, or nothing, they will often choose NOTHING.
Burgermeister wrote:
Have some in the back but don't display it. If someone asks, get it for them. Show them a few, but not a lot. Pass the word on to the others. Have them do the same thing. PULL THE SIGN. Have it handy in case some a$$hole store manager, etc., wants to see it. It fell off. This way you don't run out and your gross will be better because some people will buy higher profit items. If you must have some in the counter, make as small a display as possible. I know this isn't possible in stores where they dictate where you may put ad items. Some want it in the large display at each end of your coffin counter.
I had a boss who did this and a few other dirty tricks, and he always had the best gross (out of 26 stores)
I have worked in stores where controlling the shrink was the main issue in the Meat Dept. and the Meat Manager would tell us to just cover the holes and barely put anything out. I hated that, but then I also worked in stores where they over cut everything and the shrink was horrible. You kind of have to find the middle ground and management needs to make up their mind. Do they want low shrink or high GP dollars. They usually can't have both. Especially now-a-days when the meat consumer is a lot more cautious than they used to be. I 100% agree with Jim's variety concept. A lack of options is going to make them just turn around and walk away. I had a hell of a hard time explaining that to some very shrink conscious minded people. If you are advertising something, you better have it out there if you are in a self service meat dept. or people are going to be upset if they can't find it. However, I think if you are going to spend your whole day slicing loss leaders and making them perfect when they don't make you any money, you are wasting precious time that could be used on the money making items. Most meat depts these days are way downsized from where they were in the 80s. They don't have as much manpower to spread around as they used to so corners sometimes have to be cut.
.................Anyway, what I want to convey, based only on my experience, is that you must give the customer choices and variety. If they have the choice of choosing 1 to 3 or 4 of any item, or nothing, they will often choose NOTHING.........................
I'm not sure if that's a valid counter point (if that's what you're trying to do) regarding my suggestion to hide an ad item. I'm talking about an otherwise very well stocked case, which it always was. My boss made one ad item less easy to find, but easily available for anyone who asked. Sales volume was fantastic and gross profit was month in and month out the highest in the company for the two years I was in his shop. To imply that there's wasn't "choices or variety" is absurd
Coalcracker is right , give them what they want even if it fills like you are losing your butt . I have been on both sides owning a meat shop for 20 years and working with companies for over 50 years . I have found out if you can get it in there mouth you can get it in there cart . so I get a profitable item and demo it and push that product to help my gross profit . my prayers go out to Leon's family , may God bless . Ray the meat man .
I'm sorry but I cannot accept that approach to doing business, by making ad items scarce and hard to find. That will NOT grow your business! If a customer comes in based on what they saw in your ad they deserve to find those items and should not have to ask for them. At one point I worked for a small 11 store chain of independents that operated under the Thriftway banner. We ran our own ad but corporate Thriftway also ran ads. We were told not to honor the Thriftway ad price unless the customer brought the ad in and showed it to us. That's no way to do business, inconveniencing your customers like that. It's no coincidence that once I went to PathMark, any of our meat depts did more volume than any one of that independents ENTIRE STORES.
Burgermeister wrote:
jimhenry2000 wrote:
.................Anyway, what I want to convey, based only on my experience, is that you must give the customer choices and variety. If they have the choice of choosing 1 to 3 or 4 of any item, or nothing, they will often choose NOTHING.........................
I'm not sure if that's a valid counter point (if that's what you're trying to do) regarding my suggestion to hide an ad item. I'm talking about an otherwise very well stocked case, which it always was. My boss made one ad item less easy to find, but easily available for anyone who asked. Sales volume was fantastic and gross profit was month in and month out the highest in the company for the two years I was in his shop. To imply that there's wasn't "choices or variety" is absurd
Coalcracker is right , give them what they want even if it fills like you are losing your butt . I have been on both sides owning a meat shop for 20 years and working with companies for over 50 years . I have found out if you can get it in there mouth you can get it in there cart . so I get a profitable item and demo it and push that product to help my gross profit . my prayers go out to Leon's family , may God bless . Ray the meat man .
I don't care about the stores profit. Partly because they don't care about cutting OUR pay/hours/benefits when they can. I'm on the customers side. In fact I often disappoint my manager by recommending cheaper cuts or fewer steaks. For example, a lady was going to buy 7 rib eyes for a family of 7 and I talked her down. They were thick and heavy and about $17.00 each. I said they could be shared rather than one each. She was so happy! And I was happy to make her happy. But my manager overheard and was mad at me. Also, I'll talk someone out of porterhouse's for a large family, and instead recommend the Tri Tip on sale. Or I'll tell the customer, if I feel it's right, "I always buy the cheaper things, pork chops, chicken, ground beef, how about making sloppy Joe's, I'll show you how
I'm not a manager, have no such ambition. Not a bonus baby. I'm sure the company makes tons of money. So what if the meat dept makes a low profit? I'm positive the company (everywhere I've worked in 38 years) as a whole is doing fantastic and if they want a non profit meat dept, I don't care. I'd like to work in a Military Commissary. They're non profit and that's fine with me
I was just trying to help the original poster in this thread who's stupid so called superiors are on his/her ass about gross profit. His/her company wants it both ways. Give the meat away and also make a lot of money. That can be a little stressful
I'm sorry but I cannot accept that approach to doing business, by making ad items scarce and hard to find. That will NOT grow your business! If a customer comes in based on what they saw in your ad they deserve to find those items and should not have to ask for them. At one point I worked for a small 11 store chain of independents that operated under the Thriftway banner. We ran our own ad but corporate Thriftway also ran ads. We were told not to honor the Thriftway ad price unless the customer brought the ad in and showed it to us. That's no way to do business, inconveniencing your customers like that. It's no coincidence that once I went to PathMark, any of our meat depts did more volume than any one of that independents ENTIRE STORES.
I didn't know Alex (my boss at the time) needed your approval. It was in 1996. Should have checked with you first to see if you'll accept it or not. And FYI, the business did grow. We're talking about 1 ad item each week, or most weeks. Not eliminating all ad items. There's way too many. If we did that, you'd be correct.
OK, I get it. You have no desire to be a meat manager and don't care about the company's bottom line. Your department's volume may have grown but it might have grown much more if not hiding an ad item. No way to tell of course; it's a hypothetical. When you say you are on the customer's side, how does that corellate with hiding an ad item? Being in a union shop, I heard a lot of feedback from my crew similar to yours, like "Why should I be loyal to the company when the company is not loyal to me?" I would tell them that they didn't need to be loyal to the company, or even give a sh** about the company, but it was in their best interest to be loyal to their paycheck. That advice wasn't received well of course because as Chief Journeyman/Meat Dept. Manager, I was "management" even though a union member. Then a new BJs opened up in our area. For those not familiar it's the same type operation as Costco or Sam's Club, and non-union. Our union attempted to organize them and along with our shop steward I spent every Wednesday (my only day off) for a few months picketing this BJs and handing out literature. It was very disappointing when I saw some of my crew as well as many other employees of our store shopping there while I was picketing.
(As an aside, what message do you send when your friends and neighbors, who know where you work, see you shopping at the competition?) It's a free country of course, no big deal. Today, every store in our chain is gone but BJs is still thriving.
Respectfully,
Jim
Burgermeister wrote:
jimhenry2000 wrote:
I'm sorry but I cannot accept that approach to doing business, by making ad items scarce and hard to find. That will NOT grow your business! If a customer comes in based on what they saw in your ad they deserve to find those items and should not have to ask for them. At one point I worked for a small 11 store chain of independents that operated under the Thriftway banner. We ran our own ad but corporate Thriftway also ran ads. We were told not to honor the Thriftway ad price unless the customer brought the ad in and showed it to us. That's no way to do business, inconveniencing your customers like that. It's no coincidence that once I went to PathMark, any of our meat depts did more volume than any one of that independents ENTIRE STORES.
I didn't know Alex (my boss at the time) needed your approval. It was in 1996. Should have checked with you first to see if you'll accept it or not. And FYI, the business did grow. We're talking about 1 ad item each week, or most weeks. Not eliminating all ad items. There's way too many. If we did that, you'd be correct.
-- Edited by jimhenry2000 on Wednesday 4th of May 2016 07:40:51 PM
OK, I get it. You have no desire to be a meat manager and don't care about the company's bottom line. Your department's volume may have grown but it might have grown much more if not hiding an ad item. No way to tell of course; it's a hypothetical. When you say you are on the customer's side, how does that corellate with hiding an ad item?
I thought I explained that already. I wrote that I was trying to help the original poster in this thread, Jason on how to sell fewer super low profit ad items and more non ad items.
(As an aside, what message do you send when your friends and neighbors, who know where you work, see you shopping at the competition?) It's a free country of course, no big deal. Today, every store in our chain is gone but BJs is still thriving.
Respectfully,
Jim
Ha ha!! Funny! Do you have someone spying on me? That happened today! Not a friend or neighbor, but a regular customer saw me. We spoke for a few seconds about my store.
I guess you've never owned a foreign car and have no clothes made overseas. What would your neighbors think?
Actually, I have owned a couple VWs in the past, then went to Ford and Chevys. Last year I bought myself a brand new turbo-charged Subaru Forester XT, my wife a new Subaru Outback, and my daughter a 2015 Subaru Impreza. I know the Forester is made in Japan, the Outback is made in Indiana, and I don't know where the Impreza is made. Not sure how any of this matters since I do not work in the auto industry, but I can say that the Subaru Indiana plant is one of my customers.
Burgermeister wrote:
jimhenry2000 wrote:
(As an aside, what message do you send when your friends and neighbors, who know where you work, see you shopping at the competition?) It's a free country of course, no big deal. Today, every store in our chain is gone but BJs is still thriving.
Respectfully,
Jim
Ha ha!! Funny! Do you have someone spying on me? That happened today! Not a friend or neighbor, but a regular customer saw me. We spoke for a few seconds about my store.
I guess you've never owned a foreign car and have no clothes made overseas. What would your neighbors think?
Actually, I have owned a couple VWs in the past, then went to Ford and Chevys. Last year I bought myself a brand new turbo-charged Subaru Forester XT, my wife a new Subaru Outback, and my daughter a 2015 Subaru Impreza. I know the Forester is made in Japan, the Outback is made in Indiana, and I don't know where the Impreza is made. Not sure how any of this matters since I do not work in the auto industry............................
I just think it's ridiculous to think a meat cutter should buy all his/her groceries where they work. Especially on their day off. Who wants to go to their workplace on their day off? I don't think anyone in my store does that. Not one person in any department, management or not.
If you live in USA and are a US citizen, a lot of people think you're un American if you buy foreign cars. Some might even call you a traitor. It's similar to the shop where you work thing, except on a larger more important scale.
