ARCADIA, Calif. -- Vons Cos. here has organized seven task forces whose recommendations are likely to fuel the chain's growth for the rest of the decade.
The groups will deal with labor productivity, store format evolution, in-store merchandising, category-based merchandising, logistics, real estate and manufacturing.
"We identified those seven areas for long-term study within the last couple of months, and we think the benefits of the decisions we make from the task force recommendations will drive our operating statement for the next several years," Larry Del Santo, chairman and chief executive officer, told SN.
Each task force is headed by an executive "sponsor" and has eight to 10 members from throughout the company. "We cross-pollinated people from different disciplines," said Dick Goodspeed, president and chief operating officer. Each unit will make a report to management every 30 days, and other task forces could be formed as the need arises, Del Santo said.
Both executives discussed each task force, their missions and their likely recommendations in some detail:
Labor Productivity, headed by Phil Hawkins, senior vice president of stores. His goal is to maximize store profitability by improving store labor efficiency while maintaining appropriate levels of customer service. "We've been doing labor scheduling the same way for a long time," Del Santo said, "and we're looking for new, better, more productive ways to spend our labor dollars." The committee is expected to make its initial recommendations later this year "and unless there are systems implications, we hope to put that group's suggestions into our budget immediately," he noted.
Store Format Evolution, headed by Sue Klug, senior vice president of marketing. Her task is "to align our stores with the customers of the future," Goodspeed said. "Supermarkets generally are behind the curve because we start building stores today that won't be open for two years. And we want to be sure we can satisfy the needs of the customers who will shop with us in two years or five years by incorporating certain merchandising and design concepts into our new stores today."
Del Santo said the evolving stores have been designated Vons 2000 and Pavilions 2000. "This will be an evolutionary, ongoing task force," he explained. "Because we're planning to open 12 to 15 stores next year, we have to get with it, and a number of ideas this group will offer will be reflected in the six Pavilions we will open in 1997." He said the changes are likely to be subtle, such as the scope of meal offerings, department location within the store or perishables selection.
In-Store Merchandising, headed by Bob Erickson, manager of sales and promotions. His mission is "very basic -- how to sell more items to each customer," Del Santo said. "We want to determine what we can offer that will increase the average sales per customer beyond what we experience now." He declined to pinpoint that figure.
According to Goodspeed, "What we offer ties in with rationalizing stockkeeping units. By eliminating some SKUs, we should end up with more space in existing stores, and this task force will determine how we use that space and how we can cross-merchandise items or categories that may not be in our stores right now."
Category-Based Merchandising, headed by Harold Rudnick, senior vice president of retail purchasing. He will seek to implement practices, processes and systems to improve merchandising effectiveness and efficiency. "We started using category management in the mid-1980s, but we want to enhance that system and what it can deliver for us today," Del Santo said.
Logistics, headed by George Boyle, director of supply chain logistics -- "what we call our end-to-end task force because it is looking at all costs from the time a product leaves the manufacturer until it is sold," Goodspeed explained. "We tend to look at logistics in terms of distribution and transportation, but we're now putting those two processes together end-to-end to look at such issues as how the warehouse is laid out, how product is handled and how checkstands and gondolas are configured. And the task force will work with the format evolution group to lay out backrooms more efficiently."
Del Santo added, "Warehouse distribution today is done about the same way it was 50 years ago, and we want to find better ways to get merchandise from the vendor to the stores and to line up deliveries with promotions."
Late last year, Vons shut a 300,000-square-foot distribution center in San Diego -- which Del Santo said is up for sale -- "because it was at the end of the store distribution cycle and we determined that we could operate more efficiently with two facilities [in El Monte and Santa Fe Springs]."
Real Estate, headed by Don Howard, senior vice president of real estate and construction. He is charged with doing an extensive study of all real estate opportunities in southern California and Las Vegas "on a more proactive basis," Del Santo said, and "to identify where we want to be vs. where the opportunities are," Goodspeed added.
Del Santo explained, "We think we can be more productive within our present operating area because we think there are still opportunities there in terms of coverage, synergies and organization."
Manufacturing, headed by Chuck Stos, vice president of manufacturing and nonretail procurement. He is designated to examine what Vons manufactures in the fluid milk, dairy, ice cream and bakery categories and to evaluate what it should manufacture in the future, Del Santo said.