KMART #3286

• BRUNSWICK OHIO

KMART BRUNSWICK OHIO

• SUBURBAN LOW DENSITY AREA
• POPULATION 74,495
• MEDIAN INCOME $78,570

WHY ARE WE HERE?

• To Serve, Delight and Engage our members while they shop their way
• HOW DO WE ACCOMPLISH OUR MISSION?

KEY RESULTS

• Deliver a "WOW" Member Experience
• Become the World's Greatest Integrated Retailer
• Build a Team of Engaged Associates who Embrace Change & Technology
• Operational Excellence to Drive Profitable Sales

2013 SALES

• $8,830,000
• -3.7% vs. LY
• -$339,000 vs. LY
• -7.4% vs. Plan
• "Buck at a Time"

2013 GROSS MARGIN

• $2,679,000
• Unfavorable -$348,000 vs. LY
• GM% 30.74% vs. 32.57% LY
• Major Opportunities with GM
• Inventory is a Big Miss

EXPENSES & VARIABLE PROFIT

• Expense savings of $141,500 vs. LY
• Variable Profit Contribution $996,300
• VPC Unfavorable by -$262,000 vs LY
• EBITDA $689,000 vs $896,000 LY
• Inventory 2.04% $174,541

PEOPLE

• Develop our Selling Culture
• Communicate through Rally's
• Sales Opportunities
• Gross Margin Opportunities
• Store Process Opportunities

OPPORTUNITIES

• INVENTORY RESULTS
• GROSS MARGIN DOLLARS
• HOW DO WE FIX THIS?
• Profitable Sales, Better Margins
• Drill Down, Numbers don't Lie

#1 SALES

• $8,830,000 (-3.7% vs. LY -$339,000 vs. LY)
• Apparel is carrying the store +$90,000
• Across all categories except Jewelry -$16,000
• Major Opportunity in Food & Consumables
• Major Opportunity in General Merchandise

FOOD & CONSUMABLES

• Sales $1,323,000
• Unfavorable -$102,000
• Households -$44,000
• Food -$42,000
• Tobacco & Alcohol -$12,000

FOOD & CONSUMABLES

DRUG STORE

• Sales $947,503
• Unfavorable -$70,852
• Beauty Care -$33,000
• Healthcare -$19,000
• Cards & Wrap -$8,000

DRUG STORE

GENERAL MERCHANDISE

• SALES $1,358,031
• Unfavorable -$101,500
• Toys & Hobbies -$50,000
• Sporting Goods -$32,000
• Accounts for 82% Dept

GENERAL MERCHANDISE

HARDLINES

• Opportunities in Electronics
• Home Entertainment -$50,000
• *Movies -$18,000
• *Games & PC Software -$22,000
• *Music $10,000

GROSS MARGIN $'S

• 2013 $2,679,000
• Unfavorable -$348,000 vs LY
• GM 30.74% vs 32.57% LY
• EBITDA $738,000 (-$262k)
• Inventory 2.04% $174,541

BIGGEST OPPORTUNITIES

• GROSS MARGIN %
• GROSS MARGIN $'S
• INVENTORY RESULTS

TOP 5 SHRINK

• Electronics $30k (6.72%)
• Music/Games $25k (15.77%)
• HBA $19k (3.83%)
• Cosmetics $17k (7.02%)
• Edibles $14k (2.2%)

TOP GROSS MARGIN OPPORTUNIES

• General Merchandise -$92k
• Hardlines -$61k
• Drug Store -$63k
• Food & Consumables -$38k

VARIABLE PROFIT

• $996,300 IN 2013
• Unfavorable -$228k vs LY
• Expenses $738k
• Expenses Favorable $116k
• Salary% is 9.89%

EXPENSE OPPORTUNITIES

• Alarm Equipment
• Janitorial Supplies
• Exterior Sign Repair
• Labor Managed by % to Sales
• Part-time from 21 to 16 hour average

PEOPLE & COMMUNICATION

• SYW From 67% to 75%
• Member Feedback 28.42% in 2013
• S2H Awareness
• Utilize Secret Shopper Report
• Front End Manager

HOW DO WE FIX

• Key Positions Filled by the right people
• All Processes 100% (BRL, Unload,UI)
• Inventory Result Improvement
• MC&C Focus
• Maintain Merchandise Protection Standards

HOW DO WE FIX cont.

• DSD Receiving Process Broken
• Partner with DSD Community for Sales
• Trust but Verify
• Merchandising & Conditions in Apparel
• Unit Integrity Lead is key success

HOW DO WE FIX CONT..

• Complete Sales Culture Focus
• "Buck at a Time" Philosophy
• Monthly Detailed P&L Review
• Weekly Sales Meetings
• Monthly Shrink Meetings

30-60-90

• Measure Sales Results
• Measure GM Results
• Make adjustments to plan
• Utilize Associate Feedback
• "WOW" our Members Daily

BRUNSWICK OHIO

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