Single Store Owner

OCT 2016

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50 / Convenience Store News for the Single Store Owner / OCTOBER 2016 FROM THE EXPERTS How to Make Better Decisions for Your Store Shelves Unproductive items in your inventory can be your worst enemy analysis of total available floor space compared to department sales. 2. Aisle & department perspective: Category adja- cencies should be strategically determined based on how the shopper shops the aisle. This isn't something you should take a guess at; it should be more scientifically determined using data. 3. Category perspective: Once aisle layouts are determined (including where categories belong in the store), it's time to develop category specific planograms. The first two perspectives are typically deter- mined as part of your initial store setup. These decisions are critically important to ensure you have the store setup to best meet your shopper needs. The third perspective, category layouts or planograms, are something you need to understand beyond the planogram picture that a supplier may bring in. A planogram, in its simplest form, is an image of a category shelf set that includes fixture types and products that are specific to a category. Planograms are typically created by your supplier or distributor to give you a visual on how to set up the category in your store. UNDERSTAND YOUR STORE FIXTURES A standard gondola is the physical unit that shelves or pegs attach to, as depicted in the diagram here. Gondo- la height extends from the floor to the top of the gondola and will sometimes vary across different departments and aisles. Your gondola and shelf dimensions will be different than other c-store retailers, which is what makes your shelf requirements unique, too. Based on this, the plano- grams that are provided by your supplier may not T he average weighted in-store inven- tory in a convenience store is $81,493 in U.S. dollars, according to data from NACS, the Association for Conve- nience & Fuel Retailing. This means that, as a c-store owner, you may have more than $80,000 sitting on your shelves. And your inventory turns an average of 11.5 times per year, NACS data also shows. Do you ever think of your business in this way? Do you know which categories in your store have higher turns? Do you realize how unproductive items in your store can be your worst enemy that can tie up costly inventory on your shelves? You should! The shelves in your store — and what you put on them — directly affect sales and profit (what you take to the bank), your shoppers, and your inventory levels. You shouldn't leave your understanding of your retail store's shelves (or space management) to others. Rather, you should always think about how the decisions you make to list new products, delist old products, change shelf sets, or make any other changes in your store affect the shelf — and there- fore, affect the shoppers who come into your store. As a c-store owner, you should have a strong understanding of the fundamentals of space man- agement and how it affects your sales and profit, shoppers and inventory levels. Think of your shelf this way: • A vast majority of your store's dollar sales are from the shelf. • Your shelves tie up your inventory dollars (which could be better invested somewhere else, or could be sitting in the bank). • Poor inventory management results in out-of- stocks, or it results in overstocks leading to low inventory turns and unproductive shelves. Effective shelving, or placement, strategies are critical for your store. Three shelving perspectives you should under- stand are: 1. Total store perspective: It starts with a total store perspective. Think about how you al- locate store and department space, based on an BY SUE NICHOLLS, CATEGORY MANAGEMENT KNOWLEDGE GROUP

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