DISTRIBUTORS/CO-OPS

New CEO addresses Destination True Value

BY HBSDEALER Staff

As Chicago-based True Value seeks to encourage and support growth among members, the co-op’s six-and-half-year-old Destination True Value (DTV) remodeling program will continue to play a key role under new CEO John Hartmann.

But there may be some tweaks.

“To be crystal clear, Destination True Value is here to stay,” Hartmann told HCN in an interview during the co-op’s 2013 “Reunion” in Chicago last month. “The new guy is not coming in to turn it upside down. But I have a few ideas about it.”

One of those ideas is to somehow make the program more inclusive or more accessible to more True Value members. When Hartmann raised that point during his general session presentation to members in Chicago, the room applauded spontaneously.

Since 2008, True Value has opened, remodeled or converted nearly 400 stores with the Destination True Value format, representing more than 4.5 million sq. ft. (or as a True Value spokewman describes: “about 75 football fields.”) Year to date, 25 new DTV stores have opened, and the co-op is on track to open another 10 to 15 new stores this year. In total, nearly 1 million sq. ft. will open, remodel or convert to the DTV format in 2013.

Hartmann elaborated on his thoughts about the DTV. “We have a really hard focus on how we to make that format more productive; how do we refresh it? How do we ensure that those who invested in it, and also those who invest in it in the future, are getting a strong return.”

The co-op intends to continue the expansion of DTV across the country by ensuring financial support will continue, Hartmann said. The co-op says it has supplied $25.5 million in loans for stores and another $38.5 million in loans to refresh current stores in the past six years.

The CEO also said the co-op is looking to possibly explore creative ways that “stores can become relevant with the consumer within the DTV formant and potential alternatives to that format.” Any changes would have to avoid “diluting the format,” he stressed. 

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Hardware Store All-Stars: New Mexico, Texas and Oklahoma

BY HBSDEALER Staff

HCN congratulates the 50 hardware store, home center and farm & ranch retailers who made the annual HCN Hardware Store All-Star list.

Now in its third year, HCN’s annual list of high performers recognizes hardware stores — one from each state — that are outstanding in their field. The complete list and analysis can be found in the September issue of HCN. Meanwhile, HCN Daily will work its way across the country with mini profiles, continuing this week with New Mexico, Texas and Oklahoma.

New Mexico: Hart’s Home Center is Moriarty’s answer to the classic hardware store (where, like Cheers, everyone knows your name). Expect service with a smile, as well as a show-and-not-tell approach. Employees are both knowledgeable and willing to stay by a customer’s side as he makes his selections. 

Texas: Fourth-generation owner Kyle Grothues has helped ensure Guadalupe Lumber‘s legacy as a San Antonio mainstay, ranging from its inception in 1915 to its decision to supply lumber in the midst of the Great Depression. Serving the lumberyard niche (as well as miscellaneous market needs that include jackets and Virgin Mary statues), Guadalupe keeps the residential construction sector moving with products for handymen, DIY-ers and light to medium commercial construction.

Oklahoma: Fresh from a new store grand opening in March 2012, Hinton True Value Hardware exceeded sales expectations by a whopping 50% in its first year of business. Though many of HCN’s all-stars are retail dinosaurs that have been around for generations, this particular store bucks the trend with a fresh Destination True Value format that features improved navigation and a more female-friendly selection, as well as a niche plumbing contracting focus – just owner DeWayne Tripp’s way of meeting a need in the Hinton region.

Next week, HCN will highlight All-Stars in North Dakota, South Dakota and Minnesota. For the full state-by-state list of HCN Hardware Store All Stars, click here.

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Pet products emerge as retailer’s best friend

BY HBSDEALER Staff

Chicago — Here is a statistic that is raising optimism within the True Value pet department: 72% of pet owners consider their pet a member of their family. And what’s more, 70% of dog owners think their dog understands how they are feeling better than most people do.

It’s no secret that home owners love their pets, but the category is attractive to independent hardware stores for more retail-centric reasons, according to panelists on a True Value seminar here at the co-op’s 2013 Fall Reunion.

The average pet owner spends $630 on pet food per year, said Bill Hancox, director of marketing insights and analytics for Chicago-based True Value. Pet sales across retail have grown at a clip of about 3% per year, even through a major recession. And no single retail channel dominates the pet market.

"There’s no reason that our stores can’t get their share of this business," Hancox said during the presentation titled "How Pet Can Be a Winning Business for You" here at the co-op’s 2013 Fall Reunion.

Pet is a growing part of the overall business at Kruegers True Value in Neenah, Wis., according to fifth-generation owner Jim Webb. "We want to create a culture in the store, and we want to be known as a welcoming place for pets," he said. "And customers love that." 

Webb says Kruegers has been in the pet business to a serious degree for about a year and a half, dating back to the initial effort of the True Value co-op’s expansion and promotion of the category. A sign outside Kruegers reads: "Well-behaved pets on leashes are always welcome here." The store regularly takes pictures of pets and posts them online.

Webb and other panelists explained that the margin on a typical bag of dog food is below average, but the category is a big booster in customer traffic. "You’re seeing a repeat customer on a regular basis," Webb says. "The pet is always eating. And that gives us an opportunity to offer the pet owner something else." 

Willis Qualheim, president of Qualheim’s True Value in Shawano, Wis., also believes in the drawing power of pet supplies. "If you told me a few years ago that people would pay $55 for dog food, I’d say ‘your nuts.’" he said. "But a lot of our sales are in the premium end at $45 and up."

Qualheim said the pet category lends itself well to marketing events. The store’s Pet and Petal event includes face painting, cotton candy and visits from pet food companies and the Humane Society.

The retailer also said True Value’s involvement makes it easier to order pet merchandise from one source, as opposed to five outside vendors. 

In addition to its own Pet Expert private label brand, True Value recently introduced five new pet brands into the mix: Royal Canin, Natural Choice, Triumph, Nature’s Recipe and Iams. Marketing materials range from advertising programs to paw-print floor graphics. 

"The real benefit for you is footsteps," said Kevin Rewerts, True Value’s divisional VP for farm, ranch, auto and pet.

"What we are offering here is guidance on how to be in the business, up to date products," he addid. "We offered a one-stop shop to make it easy for you to be in this business so that you can buy a single bag or a a pallet of goods to meet your needs."

Retailers starting in out in the pet business are advised to find space for the department, ideally in the front of the store in a female-friendly area, according to the panel. 

The co-op’s wholesale sales of pet are expected to increase 77% in 2013, according to executives. 

"Have fun with it," said Webb, by way of advice. "Business should be fun, and this is." 

 

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