Nolans Finest Foods

By Group 4
Abhishek Machama
Ankita Kunwar
Ashok shashidharan
Dhiraj doley
Kranthi Rayapati
Rohan Kulkarni
Sanjay OS
Case Facts
Nolans Finest Foods is a high-end food-and-drug
combo stores.
Located in San Francisco Bay area.
Chain features a variety of high quality products.
To face the anticipated competition from Valumart
Grocery Chain, Nolans Finest Foods is
experimenting with category management.
Nolans decides to do pilot test category
management in Shampoo category before
implementing it for all other categories.
Hal Jeffreys suggested Knock out the slow
sellers approach.
1: What are the national sales trends in the shampoo category?

Total U.S. Supermarket Dynamics:

Shampoo Exhibit
1
SKU
# SKUs Dollar
#Active % New Handl Velocit
52 Weeks SKUs SKUs ed y
$
Category 1,974 15% 235 1.64
$
Brands 1,714 16% 229 1.65
$
Private
ThereLabel
has been 241
an increase12%
in the % of5New SKUs 1.33
at Nolans.
There has been an increase of 15% in Overall $(Category) at
Nolans.
Generic 19 - 1 1.00
There has been an increase of 16% in Brands at Nolans.
No change in Generics observed.
 1: What are the national sales trends in the shampoo category?

Shampoo Dollar Share

Exhibit
2
Trade 12 M 12 M
Channel Last Year This year
Food 51.7% 50.5%
Drug 25.6% 25.0%
Mass
Merchant 22.7% 24.5%
Mass merchants gaining prominence over the last year
compared to Food and Drug stores in the US Supermarket.
There has been +1.8 percentage points increase in the dollar
sales of Mass merchants.
 1: What are the national sales trends in the shampoo category?

Shampoo Growth
Exhibit
3
Dollar Sales %
Change
Trade Compared to a
Channel Year ago
Food 0.9%
Drug 4.2%
Mass
Mass Merchants shown higher growth in sales of shampoo
merchan
t Drug Stores.
compared to Food and 8.1%
From Exhibit 3 & 4, we can infer that sales of shampoos in
Food and Drug stores is increasing at a lower rate when
compared to other categories at Food and Drug stores.
 Q2: What are the differences in shampoo sales trends at Nolans compared with national trends?

Dollar Sales: Percent Change versus a Year Ago

Exhibit
4
Market Nolan's

13 weeks 52 weeks 13 weeks 52 weeks

Total dollar sales 0.1 1.2 - 10.6 - 4.5
Health Beauty
Dept. 1.5 4.2 - 8.5 - 4.3
Shampoo category - 3.5 0.7 - 19.6 - 9.7
In the last quarter the overall market has not performed well but over
a period of last year, market has just managed to cross the sales
figures of last year.

Nolan's shampoo category is performing worse than the overall

market. Last year the % increase in dollar sales of the overall market is
0.7 but Nolan's under performed in that period.

HBA department sales are increasing in the last quarter as well as in

the last year but shampoo category is not performing at the same
rate.
Q3: What would be causing these differences?
Nolan products are expensive compared to other stores in the
market.
Exhibit 5 Mass merchants and Food #2 sell at a lower price
than Nolan.
Mass merchants sells 103 items at lower price than Nolan.
Food #2 sells 44 items at lower price than Nolan.

Nolans brand ranking is slightly different than the rest of the

market.

Nolans product mix is slightly different than the rest of the

market.

From Exhibit 2 & 5, we can infer that Mass merchants are the only
stores which are performing well in the shampoo category in the
US marketbecause of their lower prices.
Q4: Suggest a plan of action?

We partially agree with the advice given by Hal Jefferrys i.e.,

knock off the slow seller approach and below are the items
which needs an action by Nolans chain:

1st Impressions have to change their SKU because even though

"1st Impressions" ranked #2, it is the slowest selling SKU at
Nolan. (Refer Exhibit 6 & 8)
Silky Style SKU needs to be removed as it is ranked #5 and
even it is the slowest selling SKU at Nolan. (Refer Exhibit 6 & 8)
Suds SKU should not be replaced, even though it has less
market share but the remaining market growth is higher i.e.,
107.1%. (Refer Exhibit 8)
Gentle gold should not be replaced as it is being completely
consumed at Nolan which means this product is only available
at Nolan. (Refer Exhibit 8)
Thank you!