NEW YORK -- Cub Foods is already getting positive results from the first phase of a reset of all food and nonfood categories using computerized shelf-space management. The program, which began in the spring of last year, involves only the 55 corporate stores of the 109-store chain, a division of Supervalu, Minneapolis. Almost one-third of the categories have been reset, with the balance scheduled to be completed in 18 to 24 months. Resets are proceeding at the rate of one or two categories a week. "I can't give you any of the actual performance numbers, but I would say that in the area of movement, profit and dollar sales, we are showing [increased percentages] in the higher single-digit numbers," said Paula Ozols, director of Testmark, a Supervalu subsidiary that handles data sales and space management. Ozols described the program at a category management conference here sponsored by The Marketing Institute, a division of the Institute for International Research, New York. "We look at 52 weeks of data as our benchmark, making projections and doing financial inventory modeling," she explained. "For tracking purposes after the resets, we wait 17 weeks and then we compare that to the 17 weeks from the year before."
Testmark is now checking its third 17-week time frame against the similar period the year before.
The resets have resulted in fewer stockkeeping units in each category. Ozols wouldn't give specifics, but said the percentage difference in some categories was in the double digits. Product duplication and too many sizes of the
same item prompted Supervalu to reduce SKUs in each category, according to Ozols. "By looking at each SKU and the needs of the consumer, we have been able to open up shelf space," she said. In one case, in the pet category, more shelf space allowed Supervalu to introduce a new product line -- upscale dog treats, collars and other accessories. Despite fewer SKUs, Ozols said the customers think there is more variety in the store. "So these two areas -- reduction of SKUs and increased variety -- are by no means incongruous," she said. "Fine-tuning these areas has led to enhanced consumer satisfaction. Customer counts are up."
Cub Foods also has been able to increase private-label goods in all categories as a result of the resets. Cub Foods is the first division of Supervalu to reset stores using computerized space management, according to Ozols, but others will get involved within the year. "We have a couple of our divisions that are beginning to do planograms, so we don't have any numbers on that yet," she said. The program has been the first step in employing category management practices and technologies for Supervalu. "The primary focus has been shelf-space management. Over the course of the next year or two, we will be moving heavily into some of the other areas [of category management]," she said.