EZ Stop N Save Convenience Stores

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1 EZ Stop N Save Convenience Stores Case Study Sponsored By: Page1

2 EZ Stop N Save Convenience Stores Case Logistics You will have 12 minutes to present to the coffee buying team of EZ Stop N Save. You should come prepared with materials to influence your buyers. Included work materials o Store vs Industry Business Analysis o Consumer Insights Page2

3 EZ Stop N Save Convenience Stores Case Overview You work for Coffee Craze, a leading manufacturer in the coffee industry supplying premium quality coffee for convenience stores. You are part of a key account team that is responsible for calling on EZ Stop N Save Convenience Stores which have 300 stores operating in 5 states (TX, OK, LA, FL and GA). Your primary responsibility is to find business building opportunities to help mutually grow your business and the account s business. Mission Statement: To make your life EZ ier Coffee Category Strategy: Traffic Building / Increasing Customers through the door Overall Account Goals: - Grow Total Coffee Sales by 5% - Maintain a margin of at least 40% - Be competitive within the marketplace You should use the materials in this case to influence the buyers of EZ Stop N Save to make decisions that will improve the coffee category performance. - EZ Stop N Save Performance vs the Market Performance - Consumer Insights - Coffee Profitability Page3

4 Sales Competition Round 1: Increase Inventory Coffee consumption has increased ~5% per year for the past decade. However, inventory management principles have remained unchanged at EZ Stop N Save. As a result there has been an increase in the incidents of Out-of-Stock. Consumer research tells us that 50% of consumers will go to another store to get their coffee & 50% will purchase another drink option. Selling Objective: Sell a strategy of increasing Days of Supply from 10 days to 14 to ensure sufficient inventory to meet growing demand while maintaining the minimum overall account goals of EZ Stop N Save. Consumer Insights for Coffee One-third (33%) of coffee consumers pay attention to ads or displays while in stores. Coffee consumers spend an average of $5.35 total per visit. Page4 Average coffee consumers visit c-stores 4 times per week. Coffee consumers are resilient with respect to economic conditions. 37% of coffee consumer pick their primary stores based on low prices.

5 Business Analysis Total Coffee Sales State # of Stores YAGO EZ Stop N Save YTD % Change YAGO Market YTD % Change TX % % OK % % LA % % FL % % GA % % Total % % Coffee Craze Sales State YAGO YTD % Change EZ Stop N Save Price Market Price TX % $1.09 $0.99 OK % $0.99 $0.89 LA % $0.89 $0.99 FL % $0.89 $0.99 GA % $0.75 $0.79 Page5 Additional Information: figures above are number of bags Each bag brews approximately 10 cups Cost per bag of coffee: $5.20

6 Profitability Formulas Margin % Profit Revenue Break- Even Amount of gross profit contained in each sales dollar (Sales price Cost) / Sales Price Total sales dollars. Retail Selling Price - Purchase cost Total income from sales. Selling Price per Item X # of Items Sold A measure of increase / decrease in sales that must occur after price change to maintain profit dollars. (Current Profit Dollar x Current ) Proposed Profit Dollar Growth Based on Market Performance A measure of how much revenue could have been earned had the account performed at the same rate as the market Account CPW YAGO x Market % = New YTD CPW New YTD CPW Actual Account YTD CPW (x Revenue x 52 weeks) Page6

The National Association of Convenience Stores (NACS) defines a convenience store as:

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