DISTRIBUTORS/CO-OPS

Once more with feeling: Ace promotes Craftsman

BY HBSDEALER Staff

Chicago — With a view toward driving profitable sales, Ace VP merchandising John Surane pointed to some merchandise initiatives, regional wins and corporate strategies during the co-op’s 2011 Ace Convention and Exhibits.

One of the brightest merchandising spots was the Craftsman tools brand. Back in February 2010, Ace and Sears announced a partnership that opened the way for Ace retailers to sell the Sears-owned Craftsman brand. 

"We have enough numbers in the bank now to know that this is working," Surane said. He said the tools category has seen 20% sales growth, 9% transactions growth and 9% gross profit growth for those roughly 500 stores participating in Craftsman programs.

Some 500 stores are already participating in the Craftsman program, and the company projects a rollout of 900 in 2011. But there’s no reason that number couldn’t be much higher, he said. 

"Ladies and gentlemen, we’re back in the tool business, with Craftsman," Surane said. 

And to make it easier for smaller stores to participate, the Craftsman booth was showing off its latest program — a Craftsman merchandise program designed for the needs of smaller stores.

Surane pointed to some regional wins — including a member who introduced the Bird Niche and recognized category sales gains of more than 100% in the first 120 days. The Bird Niche program is 48 linear feet and 800 sq. ft. of floor space. Ace’s Wild Bird Food is No. 1 in sales, No. 1 in transactions and No. 3 in profit as a "Red Hot Buy" at the show. 

One of the keys to profitable sales is cost of goods, and Surane offered a commitment on behalf of the co-op: "We will compete and dominate this area," he said.

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Ace CEO sees positive signs in economy

BY HBSDEALER Staff

Chicago — Ace Hardware Corp. CEO Ray Griffith pointed to some positive metrics that should give encouragement to hardware retailers in 2011.

Speaking during the opening general session during the Ace Convention & Exhibits here in Chicago, he said across Ace, same-store sales at retail in the month of February were up an impressive 5.8% over last year. Transactions increased "an equally impressive" 3.6%, he said. 

"We have not seen that kind of increase in over 47 months — not since February 2007," he said.

While housing starts and new-home sales continue to languish at or near-historic lows, other macroeconomic factors support optimism for hardware stores. Griffith pointed to February consumer confidence as the highest in almost three years. The International Council of Shopping Centers retail sales increased 4.2% in February.

And almost as if on cue, the nation’s unemployment rate for March slipped a tenth of a percentage point on Friday to 8.8%, down from 8.9% in February.

"Consumers do seem to be spending more freely than a year ago," he said. "Obviously it’s too early in 2011 to get overly confident about sales, but it has the feel of a much better year."

His advice to retailers: Take advantage of the economic upswing, but be prepared to act quickly in response to change.

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Ace addresses 2011 strategy, supply chain

BY HBSDEALER Staff

Chicago — During a general session that included sales and marketing strategies for success, Ace Hardware Corp. executives also expressed disappointment in the co-op’s wholesale performance during its recent supply-chain conversion.

They also expressed optimism that its systems have stabilized and that the transition will bear fruit in the form of sales and growth.

"For 100 years we were the best in the world, and for the last five months, we struggled," said executive VP John Venhuizen, about the company’s phase 4 transition to SAP. The system’s Event Planner merchandise tool disappointed users during the transition, but he added that the systems transformation represents a "new V8 under the hood at Ace."

Just a few seconds into his opening remarks, Ace CEO Ray Griffith acknowledged the problem in the company’s more-challenging-than-anticipated supply chain transformation: "Ace as a wholesaler has not performed up to your or our expectations, nor our historical high standards," he said.

Reflecting an effort to go back to basics, Griffith spelled out several areas where the co-op will benchmark its wholesale performance.

Cost of goods compared with wholesale competition: Ace expects to be the lowest, he said.
• Service level: The co-op’s service level was 95.9% for 2010; that’s below its goal of 96.7%.
• Wholesale inventory turns: The 2011 goal is 4.6.
• Wholesale purchases: "If you’re not growing, your dying," Griffith said. In 2010, revenues were up 2.1%. The goal for 2011 is an increase of 3.0%.
• Distribution productivity: Ace expects to be No. 1 in RSC sales per employee, sales per RSC and RSC sales per store, Griffith said.

Regarding sales performance in 2011, Griffith said same store sales at retail in the month of February were up an impressive 5.8% over last year. Transactions increased an "equally impressive" 3.6%, he said. 

"We have not seen that kind of increase in over 47 months — not since Feb. 2007," Griffith added.

 

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[email protected] says:
Jun-14-2011 06:39 pm

Maybe if you had not shunned
Maybe if you had not shunned all the smaller stores you would be doing better! I left Ace in 2001 after my dad and granddad where Ace dealer because Ace tried to steal $150 per 2 weeks for Atlanta advertising and we were 2 hours from Atlanta! They didn't even care that I left and the President of Ace at that time told me that was their philosophy! I told him I wasn't going to build his retirement anymore with my hard earned dollar! Ace gets what they deserved in my opinion!

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