Recently, Arkansas’ Edwards Food Giant and Edwards Cash Saver stores hit an impressive milestone - more than a 1% margin improvement in 2023. Grocery industry veteran and Storewise customer Gary Proffitt is the Vice President of Operations at GES, Inc. and took time to discuss the accomplishment.
Proffitt begins by discussing the decision to implement Storewise, emphasizing that it is seen as an opportunity rather than a solution to a specific challenge. They implemented the Temporary Price Reduction (TPR) program, which, once set up, proves to be hands-free and highly effective.
Across 13 stores, the year-over-year comparison reveals an increase in same-store TPRs by 35%, equivalent to about 2,000 additional shelf tags per store underscoring a notable trend in the consumer packaged goods (CPG) industry - discounted prices lead to increased product sales.
In 2022, the 13-store group featured approximately 40,000 TPR tags. Fast forward to 2023, and that number has significantly risen to over 65,000 within the same time frame. The heightened emphasis on TPRs is justified by the fact that the gross margin on these items exceeds that of everyday products. The equation is simple: more tags equal more profit for the retailer and more discounts for the consumer.
Storewise, according to Proffitt, excels in identifying additional revenue opportunities through a unique perspective on cost analysis. Instead of basing costs on margin, they base it on shelf retail and discount, leading to a fresh and fruitful approach. The program seamlessly adjusts TPRs without impacting the customer experience, showcasing its ease of use and effectiveness.
Addressing the importance of price image, Proffitt acknowledges that competing with major retailers like Walmart is challenging. Storewise, however, plays a pivotal role in ensuring they are not at a disadvantage, helping to generate TPRs that improve their price image and resonate positively with customers.
Proffitt expresses his satisfaction with Storewise, emphasizing its role in generating additional margin and revenue for the family-owned business, which has been operating since 1959. The interview provides valuable insights into how innovative technology can drive growth, improve the customer experience, and contribute to the overall success of a longstanding grocery chain.
Let's dive into our conversation with Gary Proffitt.
Storewise: Hi Gary, thank you for taking the time to speak with us today. I'm excited to learn more about how you achieved 1% margin across your 13 stores with Storewise grocery automation software. Congrats on that accomplishment!
Gary Proffitt: I'm happy to share our story.
Storewise: So, let's start by talking about the challenges you were facing before you implemented Storewise software.
Gary Proffitt: We weren’t looking to address a specific challenge at that time. We saw Storewise as more of a potential opportunity than anything. We sat down and looked at the TPR (temporary price reduction) product, and they earned my confidence. Once I felt that the company was a good solid fit for us, we developed a comfort level and let them implement the TPR program. It’s hands free, once we got the set up out of the way, and it has generated a lot of additional revenue for us. I’ve been pleased with the ease and effectiveness of the program.
Storewise: How did Storewise software impact your stores?
Gary Proffitt: More than anything, Storewise has helped by identifying additional revenue opportunities. They are looking at things in a way I had never looked at them before. It’s not rocket science but it’s a unique way to look at the business and the basic premise is that instead of basing a cost on margin, you base it on shelf retail and discount. That was a fresh perspective. If you can live with your regular retail, you can live with a TPR based on that price. We raised our TPR retails per Storewise guidance. That’s how we generate the additional margin on an ongoing basis. The changes did not impact customer experience. TPRs started adjusting, and over a two or three month time we fully implemented the program. In the two or more years that we’ve been on the program it has worked and continues to work well. It doesn’t create issues for us to fix. It’s very hands free. It’s honestly pretty seamless.
Storewise: What kind of impact has Storewise software had on your business?
Gary Proffitt: Bottom line, we’ve seen margin growth.
Storewise: How has the revenue growth impacted you, your stores, and your community?
Gary Proffitt: That growth lets us continue to invest in new opportunities. We’re opening our second store in a year. We’ve been opening about a store a year at a time. That's the revenue that it generates. It all goes into our operations, and allows us to continue to grow and even pick up the pace of growth. We are in a better position to take advantage of opportunities.
Storewise: What advice would you give to other independent grocers who are considering implementing new software?
Gary Proffitt: I’d tell grocery peers that Storewise works as advertised and has for us for a good amount of time now. It’s as involved as you want it to be. I’m very hands off once I set up the rules. Of course I check on everything once in a while to be prudent, but it's easy. If you want to, you can dig in deep every single week and make adjustments. But you don’t have to. It does everything it’s supposed to do.
Storewise: How has Storewise impacted your price image?
Gary Proffitt: Price image is important. We don’t operate in a vacuum and we compete with Walmart and other big box stores. Without TPR’s we would be at a huge disadvantage . The way our rules are set up is to make sure we're generating as many TPRs as make sense. It improves our price image and people respond to that. Inflation and downsizing of products causes consumer grocery bills to go up. We’re sensitive to those issues.
Storewise: That's an important point. It's clear that the revenue growth from Storewise software has had a positive impact on your business. Thank you for taking the time to share your story with us today.
Gary Proffitt: You're welcome. I'm happy to speak about our experience. Our company is family owned, in their third generation, operating since 1959. Investment in Storewise has meant additional margin and revenue which means growth and improvements. It’s a wonderful business.
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