NORTH TAZEWELL, Va. -- Acme Markets of Virginia here is boosting sales in the dry grocery aisles with a program designed to routinely shake up the product mix, category by category.
The 11-store operator has instituted a program called "Section of the Month" under which a grocery category is scrutinized each month to root out slow movers and put in new items.
"It's like doing a whole store set a category at a time," said Bob Downum, chief operating officer.
The program represents a manageable way for smaller retailers to integrate sophisticated category management.
Many of the latest high-tech category management tools are not at the fingertips of chains the size of his, according to Downum, "but we're working with the technology we have. We do have computer resources on product movement, scanning data from our wholesaler."
As Downum explained it, the chain has "divided the grocery aisles into 12 categories, and set up a new planogram based on the information on gross profit dollars. Acme Markets studies the costs, gross profits and gross profit dollars for all the SKUs of a section. But it's the gross profit dollars that dictate where items are placed in the new planogram, or if they even stay," he said.
The most profitable items are moved to premium shelf space, while the slower movers are ratcheted down.
Those that aren't earning their keep are removed to give new items a shot. And, nowadays, Downum said, these new products are often of the no-fat and low-fat variety.
Because the low-fat trend is growing and changing rapidly in the grocery department, Downum said the Section of the Month system allows him to "stay more on top of the latest products available."
Acme Market's grocery merchandiser analyzes the selected category each month, and then sends out the latest information on the target category to the chain's stores, which rework their shelf sets and clean out the slow movers.
Downum said that Acme Markets' "sales and gross profits are increasing due to this, simply because we're paying more attention to the individual grocery categories. That's the bottom line."