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CASE-READY REVIEW COULD REVEAL BENEFITS: LEVIN

DALLAS -- Proponents of case-ready beef programs always tout enhanced food safety and extended shelf life. What retailers should also consider are the not-so-obvious, harder-to-measure potential benefits, ranging from increased profits from fewer stock-outs to savings from a reduction in employee injuries, a speaker told attendees at the Annual Meat Conference.On his third consecutive appearance at

DALLAS -- Proponents of case-ready beef programs always tout enhanced food safety and extended shelf life. What retailers should also consider are the not-so-obvious, harder-to-measure potential benefits, ranging from increased profits from fewer stock-outs to savings from a reduction in employee injuries, a speaker told attendees at the Annual Meat Conference.

On his third consecutive appearance at the AMC, Richard Levin, a retired business professor at the University of North Carolina, Chapel Hill, showed his audience a breakdown of potential advantages to case-ready programs, during the conference's closing general session. Cryovac Sealed Air Corp. sponsored Levin's presentation and spreadsheet, contained on a compact disc provided to conference goers.

In his two previous presentations, Levin urged retailers to develop consistent accounting procedures, which would enable them to get a clear picture of the department's financial condition, and showed attendees how to measure profitability, step by step. This year, he continued his "do-the-numbers" theme by encouraging retailers to look beyond the obvious and analyze the potentially hidden benefits of case-ready beef products.

Levin walked retailers through a mock calculation, using conservative figures to estimate the possible advantages for a theoretical supermarket company.

One advantage case-ready beef products offer is a more reliable supply of product, Levin said. Having cases full of packaged beef products is bound to boost sales while, conversely, running out of product will have the opposite effect.

"Twenty-five percent of shoppers, when confronted with a stock-out, don't buy a substitute [product] from you," he said.

Retailers could see greater profits on the sale of upscale meats, he said. In traditional service meat departments, ground meat dominates the product selection. Case-ready programs give retailers the chance to sell a bigger selection of upscale meats and, with that, "you attract high-margin, impulse shoppers," he said.

With the elimination of butchers and meat cutters, there's also potential savings from fewer injuries, such as saw and knife cuts, which result in lost work time, he said.

Supermarkets also gain real estate when they eliminate meat-cutting departments, he said. How retailers choose to maximize that space is up to them, and the actual value of that space, depending on the region, varies tremendously.

"Building your next store without 196 square feet set aside for cutting will make you some bucks," he said.

Furthermore, retailers without backroom equipment for cutting and packaging would realize savings in service and maintenance calls on the equipment, and wouldn't have the expense of outfitting new stores with the equipment, he said.

From a labor standpoint, retailers could save money through the elimination of management and supervisory positions in meat departments, as well as costs associated with recruiting skilled labor, Levin said.

Once company officials have decided to roll out a case-ready program, they need to plan an advertising campaign to communicate the news with their consumers. Retailers should budget for additional spending on advertising, he said.

"Don't think shoppers automatically embrace the change," he said. "They need friendly persuasion. Show them that this stuff is good stuff."

In closing, he urged retailers to sit down and do their own analysis.