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December 2010
Copyright © 2010 Balvor LLC. All Rights Reserved.
117 South Cook Street #339
Barrington, Illinois 60010
phone: 847.722.2732
fax: 847.382.1801
Summary of Survey Results
2011 CONVENIENCE RETAIL OUTLOOK
Copyright © 2010 Balvor LLC. All Rights Reserved.
Composition of Retailer Respondents(Retailers completed online survey between 11/9/10 and 11/22/10)
1- 10 Stores,
54%11 - 50 Stores,
21%
51 - 200 Stores,
10%
201 - 500 Stores,
11%
500+ Stores, 4%
Number of Stores Operated(Percent of Retailers)
Top-Line Characteristics
# of retailers: 113
# of store represented: 10,510
1-10 store operator share: 54%
Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
2
Copyright © 2010 Balvor LLC. All Rights Reserved.
4.2%
2.8%
Foodservice Merchandise
3
2010 Dollar Sales Trends YTD - PCYA(Weighted Average*)
* Based on store countSource: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
0.9%
2.3%
5.3%
4.3%
1.0%
3.7%
5.1%
2.5%
1- 10 11 - 50 51 - 200 201+
Foodservice Merchandise
4
2010 Dollar Sales Trends YTD - PCYA (Weighted Average* – Grouped by # of Stores Operated)
* Based on store countSource: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
9%
21%
18%
27%
24%
38%
33%
44%
48%
56%
Drug stores offering commissary-driven fresh foods
Drug stores selling beer in more locations
Foodservice operators expanding into morning day-part
Grocery stores partnering with specific convenience chains to offer fuel discounts
Other convenience stores offering fuel discounts
Very Concerned Somewhat Concerned
5
2011 Competitive Threats – Level of Concern(Percent of Retailers*)
* Ranked in descending order based on percent concerned.Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
14% 15%
10%12%
7%9%
38%
25%
23%18%
11%7%
11%
16%25%
11%
7%6%
Raise retail prices on hot dispensed
beverages
Upgrade hot dispensed beverage
equipment
Add iced coffee to the offering
Consider re-branding hot
dispensed beverages
Adjust cup sizes offered with cold
dispensed beverages
Introduce a smaller cup size in hot
dispensed beveraes
No, Already Did in '10
Somewhat Likely
Extremely Likely
6
Potential Changes to Dispensed Beverages in 2011(Percent of Retailers*)
* Ranked in descending order based on percent likely to change in 2011.Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
9%
13%
7%4%
9%
32%
13%
15% 17%10%
9%
13%
12%
3%
10%
Expand range of products on roller grill
Develop private-label offerings
Install a wholesaler, fresh-food express case
Change product suppliers
Franchise with a branded foodservice
concept
No, Already Did in '10
Somewhat Likely
Extremely Likely
7
Potential Changes to Foodservice in 2011(Percent of Retailers*)
* Ranked in descending order based on percent likely to change in 2011.Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
8% 9%7% 8%
5%
11%
37% 36%
31%
22%
21% 14%
8%6%
5%
4%
4%4%
Add new product categories
Leverage multi-vendor displays
Use more manufacturer floor
shipper displays
Reduce SKU counts Introduce new services
Introduce private label across categories
No, Already Did in '10
Somewhat Likely
Extremely Likely
8
Potential Changes to Packaged Merchandise in 2011(Percent of Retailers*)
* Ranked in descending order based on percent likely to change in 2011.Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
44%
14%
3%
40%
58%
25%
Your Company Convenience Industry US Economy
Somewhat Optimistic
Extremely Optimistic
9
Retailer Outlook for 2011(Percent of Retailers*)
* Ranked in descending order based on percent optimistic.Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
29%
54%
64% 64%41%
42%36% 36%
1- 10 11 - 50 51 - 200 201+
Extremely Optimistic Somewhat Optimistic
10
Retailer Outlook for 2011 – “Your Company”(Percent of Retailers - Grouped by # of Stores Operated)
* Based on store countSource: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
Negative, 30%
Positive, 70%
Classification of Comments(Percent of Retailers Responding)
Positive themes• Competitive positioning (delivering value in
more ways today)
• Customer service (focusing on better satisfying needs of customers)
• Foodservice (becoming better at serving up a quality lineup of fresh products)
• Economy (getting better – albeit slower than expected)
Negative themes• Competitive threats (discounting is helping
sales, but hurting profits)
• Economy (creating an on-going drag on consumer spending)
• Supply-side inflation (higher input costs –especially in foodservice)
11
Retailer Outlook for 2011
Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
36%
19%
42%55%
Foodservice Merchandise
Somewhat Optimistic
Extremely Optimistic
12
Retailer Outlook for Company’s Prospects in 2011 (Percent of Retailers)
Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
22%
46%
64%
50%
49%
42%27%
29%
1- 10 11 - 50 51 - 200 201+
Foodservice
Extremely Optimistic Somewhat Optimistic
10%
25%
36%
29%
51%
54%
64%
64%
1 - 10 11 - 50 51 - 200 201+
In-Store Merchandise
Extremely Optimistic Somewhat Optimistic
13
Retailer Outlook for Company’s Prospects in 2011 (Percent of Retailers - Grouped by # of Stores Operated)
Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
5.1%
4.2%
Foodservice Merchandise
14
2011 Dollar Sales Targets – v. ‘10(Weighted Average*)
* Based on store countSource: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved.
36%34%
23%
4% 1%2%
20%
42%
30%
4%2% 2%
Up more than 6% Up 3 to 5.9% Flat to Up 2.9% Flat to Down 2.9% Down 3 to 5.9% Down more than 6%
Foodservice Merchandise
15
2011 Dollar Sales Targets – v. ‘10(Percent of Retailers)
Source: Balvor 2011 Convenience Retail Outlook Survey, Balvor LLC, November 2010.
Copyright © 2010 Balvor LLC. All Rights Reserved. 16
Public Accomplishments
White Papers
• Convenience Channel Opportunity: Insights for the Dairy Industry, Dairy Management Inc., 2010.
• Are Retailers Doing Enough? Preventing Underage Access to Tobacco at Retail, Center for Responsible Tobacco Retailing, Inc., 2009.
• Accelerating Cigar Profits Through an Increased Strategic Focus, John Middleton Inc., 2008.
• How to Succeed in Convenience Retail:A Practical Guide for Product Suppliers, NACS, 2007.
Industry Research
• SKU Rationalization Survey, NACS/Balvor, March 2010.
• Motor Fuels Retailer Survey, Balvor/NACS, January 2010.
• State of Foodservice, Convenience Store Decisions, 2008 - present.
• Tobacco Retail Survey, Convenience Store News, 2008 – present.
Current Industry Affiliations
• Convention and Events Committee, NACS, 2007 – present
• Supplier Advisory Board, Convenience Store Decisions, 2006 – present
• NACSPAC Member, 2008 - present
Biography
David is the managing partner of Balvor LLC, which is a sales and marketing firm that provides consulting, sales support, research, and analytic services to retailers, product suppliers, financial analyst and other organizations.
Balvor’s services support various food channels, covering both foodservice and retail classes of trade.
David has helped many leading retailers evaluate new retail concepts, enhance annual category planning processes, and develop new business support methods related to assortment rationalization, space allocations, or branding strategies.
He helps product suppliers improve their competitive positioning, trade programs, and category management capabilities by better understanding what retailers’ value while also benchmarking versus peer companies.
David also has extensive experience with activity-based costing, channel sales strategy, merchandising assessments, trade communication, and custom analytical support for both consumer packaged goods and foodservice industries.
Prior to founding Balvor in 2008, David spent 12 years at Willard Bishop in various positions, including most recently as partner. David began his career with The Levy Restaurants in operations for new store concepts where he focused on beverage and financial programs.
David Bishop Managing Partner, Balvor LLC
P: 847.722.2732