Tuna Audit Sam Heneger Ally Martin Will Dunlap

Flagship Sales Dollar Volume HighMediumLow Core Traffic Cash Machine Under Fire Maintain Rehab Gross Margin % High Low

Category Role: Cash Machine A majority of the stores had all brands of tuna displayed together, inside the aisles, grouped by brand name. However, both Aldi stores, Fayetteville and Springdale, had tuna displayed on an end-cap near the register Gross Margin: At the Harps in Springdale, we noticed that Star-Kist grossed 68.8% of the revenue, which was higher than a majority of the brands we audited. Sales: We compared our gross margin percentages per facing in each store and found that Star-Kist, once again, had a majority of facings which indicates high levels of sales. According to the Marsh data, Tuna had one of the lowest weekly sales in category management.

Customer Demographics Tuna was most popular among Hispanic households, households with 5+ people, and people ages and ages Brand name tuna was more frequently purchased by higher income households. These were typically older, empty nesters or young people in urban areas. Private label tuna was purchased largely by low income households. These were typically younger families in more rural areas or senior singles.

Differences between Store Trading Area Demographics We recognized that the WalMart on MLK outnumbered the other WalMart’s by at least 5 times the number of customers in the age range. This is due to the fact that they target low income and University of Arkansas students. We also recognized that the WalMart Neighborhood Market on Mission and Crossover targeted the higher income population in the areas of Goshen and East Fayetteville. The WalMart on Joyce targeted a middle income population because of it’s location between Fayetteville and south Springdale. We found that the average age of customers shopping at this store was elderly people between the ages of 75 and above.

Circular Trade Areas: Fayetteville Area Supercenters

Category Assessment StarKist was the only brand consistently found at every store except Aldi and it was given the most shelf space at each store Aldi’s brand differed from Wal-Mart’s in that it was lower cost and price efficient StarKist and Bumble Bee were considered “Type C” brands, meaning they had high gross margins and high costs. According to Private Label Strategy’s Figure 6-1, tuna’s private label brands had a lower price gap with manufacturer brands and higher private label shares

Store# SKU% of Cat WMJ5530.1% WMW % Harps SD168.7% Harps G147.7% IGA116.00% SAMS95.00% WG-TWN73.8% WG-M73.8% ALDI-SD73.8% ALDI63.3% W-OAK G10.05% Wal-Mart on Joyce had the most assortment with 30.1% of all the SKU’s found!! We found that many times the PL is placed directly next to the “Grade A” brand to encourage consumers to purchase based on price to be true Retailers Audited

Category Strategy We had several high grossing manufacturers ranging from Dongwon, Bumble Bee Tuna, Thai Union Group, and the Private Label brand at each store. MFR Brands: Dongwon Industries produced Star-Kist Tuna Bumble Bee Tuna produced Bumble Bee products The Thai Union Group produced Chicken of the Sea Tuna products The Private Label brand produced Great Value, Market Pantry, Best Choice and Northern Catch We found that Star-Kist consistently had greater shelf space and more SKU’s at a majority of the stores we sampled in our audit.

We looked at the 5 ounce cans of Chunk Light Tuna for all the brands and found that the cost for the cans varied by different values : $0.85 (Bumble Bee), $1.27 (Chicken of The Sea), $0.72 (StarKist), $0.65 (Private Label) Private label does not have a place in the Tuna category since the quality is low grade and a majority of private label’s overall sales don’t come from Tuna. Aldi’s seemed to be the only one to be committed to private label since that’s a majority of what they sell at their locations. Brands like Wal-Mart’s Great Value and Target’s Market Pantry allow higher returns in the store since that is a source of revenue for the chain. Unfortunately, private label does not have a higher gross margin’s on their returns since they only produce the bare minimum to put a product on the shelves. Category Tactics

Looking back—A category review We felt like private label was declining especially in the tuna industry. This was because manufacturers just put products like Great Value out there just to have a product, not pouring all their resources into tuna like the Star-Kist brand and so forth. The share of display was over-run by Star-Kist at a majority of the 15 stores we audited. The tuna industry doesn’t have new products enter the market very often since there is only so many ways you can package tuna and make a new brand identity out of it. Competition in the tuna market depends on whether or not the tuna is low quality or high quality then depending on brand recognition.