DeCA EastDeCA East

Mr. Randy ChandlerDirector, SalesMr. Randy ChandlerDirector, Sales

Sales UpdateSales Update

TOTAL SALES ALL 11 ZONES UP

GROCERY SALES ALL 11 ZONES UP

PRODUCE SALES ALL 11 ZONES UP

MEAT SALES 6 OF 11 ZONES UP

TRANSACTIONS 9 OF 11 ZONES UP

TOTAL SALES ALL 11 ZONES UP

GROCERY SALES ALL 11 ZONES UP

PRODUCE SALES ALL 11 ZONES UP

MEAT SALES 6 OF 11 ZONES UP

TRANSACTIONS 9 OF 11 ZONES UP

YTD East Zone Sales YTD East Zone Sales

Thru April 2008Thru April 2008

* Indexed to Region Average

* Indexed to Region Average

DepartmentDepartment ZoneZone Percent Percent ChangeChange Index*Index*

Total SalesTotal Sales 2626 +5.9%+5.9% 145145

Grocery Grocery SalesSales 2929 +5.9%+5.9% 144144

Produce Produce SalesSales 2626 +11.6%+11.6% 183183

Meat SalesMeat Sales 2929 +4.9%+4.9% 397397

TransactionsTransactions 2121 +3.4%+3.4% 237237

East Zone Leaders - SalesEast Zone Leaders - Sales

Thru April 2008Thru April 2008

ZoneZone Dollar IncreaseDollar Increase PercenPercent t

2121 $98,069.26$98,069.26 70%70%

2323 $91,399.50$91,399.50 73%73%

2525 $80,042.38$80,042.38 14%14%

2626 $114,570.59$114,570.59 21%21%

May Case Lot SaleMay Case Lot Sale

Store Dollar Increase Percent

Hanscom $28,206.83 110%

McGuire $55,928.29 111%

Fort Buchanan $31,141.86 100%

Carlisle Barracks

$19,653.94 198%

Fort Meade $89,462.70 66%

Fort McCoy $26,659.13 162%

Ft. Ben Harrison

$20,187.29 150%

May Case Lot SaleMay Case Lot Sale

End of Cheap Food? End of Cheap Food?

Healthcare costs

Oil price surge

Weak dollar

Weather• Drought in Australia

• Flooding in Argentina

Demand• China beef consumption has doubled

Impact of ethanol

Healthcare costs

Oil price surge

Weak dollar

Weather• Drought in Australia

• Flooding in Argentina

Demand• China beef consumption has doubled

Impact of ethanol

WaterWater

It takes 450 lbs of

corn to produce enough

ethanol to fill an SUV gas tank

It takes 800

gallons of water per person per

day to produce

daily food intake

CornCorn

1,500 gls water = 1lb beef

7 lbs corn = 1lb beef

2.5 lbs corn = 1lb poultry

Sustainability? Sustainability?

Consumer Impact Consumer Impact

FMI Trend Reports

• 71% increase in home cooking frequency

• 67% buying fewer luxury items

• 60% buying more store brands

Value will be focus

Fewer trips to secondary stores

Fewer trips = STOCK UP

FMI Trend Reports

• 71% increase in home cooking frequency

• 67% buying fewer luxury items

• 60% buying more store brands

Value will be focus

Fewer trips to secondary stores

Fewer trips = STOCK UP

Retail Shift Retail Shift

New outlets

• Supercenters, 70%

• Dollar stores, 64%

Losing ground

• Drug channel, -3%

• Grocery, -6%.

Same store dollar sales declined as well

New outlets

• Supercenters, 70%

• Dollar stores, 64%

Losing ground

• Drug channel, -3%

• Grocery, -6%.

Same store dollar sales declined as well

Defining TrendsDefining Trends

Four trends will shape the retail operating

environment the remainder of this decade: Aging population

Increasing ethnic diversity

Need for speed

Health & wellness concerns

Opportunities products, alterations to the

store (lighting, store set) accommodate

older shoppers’ limitations

Four trends will shape the retail operating

environment the remainder of this decade: Aging population

Increasing ethnic diversity

Need for speed

Health & wellness concerns

Opportunities products, alterations to the

store (lighting, store set) accommodate

older shoppers’ limitations

The Three PsThe Three Ps

Manufacturers trying to keep pace with new

items

• Portability

• Preparation simplicity

• Preparation time

New product concepts must respond to

speed-of-life issues without sacrificing flavor

Manufacturers trying to keep pace with new

items

• Portability

• Preparation simplicity

• Preparation time

New product concepts must respond to

speed-of-life issues without sacrificing flavor

Fastest-Growing CategoriesFastest-Growing Categories

1. Drinkable yogurt

2. Fresh fish/shellfish & seafood

3. Alcoholic cider

4. Ready-to-eat salads

5. Baby formula

6. Dairy-based drinks

Source: executive news report from nielsen global services,

december 2006

1. Drinkable yogurt

2. Fresh fish/shellfish & seafood

3. Alcoholic cider

4. Ready-to-eat salads

5. Baby formula

6. Dairy-based drinks

Source: executive news report from nielsen global services,

december 2006

>$1 Billion>$1 Billion

New Team Members New Team Members

Michelle Frost – Chief, Semi-Perishable

Division

Brad McMinn – Chief, Perishable

Barbara Merriweather – Category Manager,

Local/DSD

Michelle Frost – Chief, Semi-Perishable

Division

Brad McMinn – Chief, Perishable

Barbara Merriweather – Category Manager,

Local/DSD

Promotions Promotions

Total items published reduced 21%

• Dollar Sales Per SKU + 5%

• Units Per SKU + 7%

Increase Pallets/Shippers

Incorporate Club Packs

• Averaging $6.8 million per month

• $2 million per month increase

Seasonal Programs + $9 million

Total items published reduced 21%

• Dollar Sales Per SKU + 5%

• Units Per SKU + 7%

Increase Pallets/Shippers

Incorporate Club Packs

• Averaging $6.8 million per month

• $2 million per month increase

Seasonal Programs + $9 million

Front End RacksFront End Racks

Fixtures have been selected

Currently

• Developing stock assortment

• Surveying stores select type of fixtures

60 days to manufacture equipment

Phased implementation - September

Fixtures have been selected

Currently

• Developing stock assortment

• Surveying stores select type of fixtures

60 days to manufacture equipment

Phased implementation - September

Check It OutCheck It Out

Shoppers choosing self-checkout:• Wal-Mart (45%)

• Kroger (43%)

• Target (40%)

• Publix (28%)

• Costco (26%)

• Whole Foods (14%)

• Safeway (13%)

• Meijer (11%)

• Albertson’s (11%).

Shoppers choosing self-checkout:• Wal-Mart (45%)

• Kroger (43%)

• Target (40%)

• Publix (28%)

• Costco (26%)

• Whole Foods (14%)

• Safeway (13%)

• Meijer (11%)

• Albertson’s (11%).

Space Allocation – Bragg North Space Allocation – Bragg North

Today little variance in plan-o-grams

• Based on historic sales data

• Sets based on class of store

• No factor for lost sales or promoted volume

Reduce space in declining categories

• Fewer items = IN STOCK

Reconfigure flow to maximize allocation

efficiencies

Today little variance in plan-o-grams

• Based on historic sales data

• Sets based on class of store

• No factor for lost sales or promoted volume

Reduce space in declining categories

• Fewer items = IN STOCK

Reconfigure flow to maximize allocation

efficiencies

Organic OptionsOrganic Options

Organic food sales represent just 2.5%

Organics grew 30% in 2007

Grown roughly 20% per year for past five years

Grocery annual sales grew 3–5% overall

Organic food sales predicted to double as early

as 2009

Organic offerings in personal care, nutritional

supplements, household cleaners, and pet food

Organic food sales represent just 2.5%

Organics grew 30% in 2007

Grown roughly 20% per year for past five years

Grocery annual sales grew 3–5% overall

Organic food sales predicted to double as early

as 2009

Organic offerings in personal care, nutritional

supplements, household cleaners, and pet food

Organic Products• Items up 39% in last 12 month – from 460 to 641

• Sales up 40% (Apr–Mar over prior year) to 33.5m

Environmental Initiatives Reusable grocery bags

sold starting 10/30/2007• Over 1,007,000 sold thru 05/14/2008

Compact fluorescent light (CFL) bulbs, FY 08

Goal: 1 Million • Over 733,000 sold FYTD – thru 05/14/2008

Organic Products• Items up 39% in last 12 month – from 460 to 641

• Sales up 40% (Apr–Mar over prior year) to 33.5m

Environmental Initiatives Reusable grocery bags

sold starting 10/30/2007• Over 1,007,000 sold thru 05/14/2008

Compact fluorescent light (CFL) bulbs, FY 08

Goal: 1 Million • Over 733,000 sold FYTD – thru 05/14/2008

Focused on “Green” EffortsFocused on “Green” Efforts

Expand Benefit - Access G/R Expand Benefit - Access G/R

Developing staff office for support Serve as single POC for store support

• Logistics

• Communication

• Transportation

• Equipment

Develop “Virtual Solution”• Internet ordering – on site payment

• Develop total solution to include payment

• Expand – self fulfillment

Developing staff office for support Serve as single POC for store support

• Logistics

• Communication

• Transportation

• Equipment

Develop “Virtual Solution”• Internet ordering – on site payment

• Develop total solution to include payment

• Expand – self fulfillment

Retail PerspectiveRetail Perspective

Consumers are plugged into technology

Logging on to plan trips search for

restaurants and socialize

Top 15 web domains

• eBay.com, 1st

• Amazon.com, 5th

• Target.com, 12th

• Wal-Mart.com, 15th

Consumers are plugged into technology

Logging on to plan trips search for

restaurants and socialize

Top 15 web domains

• eBay.com, 1st

• Amazon.com, 5th

• Target.com, 12th

• Wal-Mart.com, 15th

Mr. Randy ChandlerDirector, SalesMr. Randy ChandlerDirector, Sales

Thank You!Thank You!