Truckload Sales Drive Value

truck.jpg

download pdf of article

Bloomingfoods Cooperative has been holding Truckload Sales since 1999. Twice each year (spring and fall) groceries, coolers and freezers, carts, cash registers and credit card machines are set up under big tents in the store parking lot. The event begins on Friday night when co-op staff shop, and it opens to the public from 9 a.m. to 6 p.m. on Saturday and 10 a.m. to 5 p.m. on Sunday. At our most recent sale, in May 2008, customers spent more than $64,000.

Years ago, we held three Truckload Sales annually. But we realized that our mid-summer sale suffered slow sales due to vacations and summer heat and settled on two sales a year. Growth has been steady over nine years. Food and fuel costs are rising, and more consumers are looking for ways to save money and make healthy food choices.

Top ten reasons
Other co-ops have started holding tent, truckload and sidewalk sales. There are great reasons to have this kind of event, and knowing what you want to achieve will ensure success. Here are 10 things to think about as you plan:

#Give a phenomenal customer reward. People love it and look forward to each event. They see a real benefit of having a co-op in the community.
#Attract new customers. It is an eye catcher; new customers see the tent and stop in to see what is happening.
#Generate cash flow. Bring in a truckload of groceries and sell it in just a few days.
#Be a discount store for a weekend. With food costs rising, shoppers like to see deep discounts on healthy products-better us than that big name chain down the street.
#Clean out discontinued items and overstocks. This benefits you and your vendor. Some of our departments use this event as a way to make a seasonal shift or to deal with the changing interests of their customers.
#Increase community presence. A major sales event sets us apart in the business community.
#Generate staff and customer excitement. The event is fun and different, out of the store, and everything is such a bargain.
#Get outside. The event is social. People talk, smile and hang out-it’s a real crowd pleaser.
#Strengthen vendor relationships. Your vendors have an opportunity to move slow product out of their closeout list and to sell a truckload or two of groceries to one customer in a weekend.
#Build internal capacity for big community events. This repeat event has allowed us to justify the purchase of additional equipment and to develop a strategy for planning major events all around town. We set up multiple food and beverage tents to serve thousands at the local world music festival each fall-not to mention large annual meetings, large catering events and a Member and Customer Appreciation Day that spans three store locations. We are becoming a very active and visible participant in the community, and the Truckload Sale has been a major component in our external growth.

Operational challenges
How do you get started? What does it take to build a store in your parking lot to sell groceries?

Find a distributor to work with. Will your distributor share the cost of your tent? Will it send staff to your event to sample product, help bag groceries, push carts, and help keep case stacks merchandised? A sales event like this is a great opportunity to strengthen relationships between in-store staff and account managers or sales reps. Your distributor helps reduce costs by offering an additional discount on goods that you purchase for the sale, and your purchases boost their cash flow and sales numbers and also gives them an opportunity to clean up overstocks and discontinued product at the warehouse. They will bring a truck and leave it in your parking lot for a few days-giving you the refrigerated space that you need for the event and giving the distributor an opportunity to promote its partnership with your businesses to anyone who drives past the event site.

Talk to brokers. If you are buying their product by the pallet, brokers can help you get great deals. One challenge is to offer great prices on items that are not on sale in the store; working with brokers will help ensure that you are offering great prices on items while having a minimal effect on in-store sales. Brokers are often able to be at the sale, promoting and sampling their products to customers. You can use this as a negotiation point; when you have 10 brands of juice to choose from, it might be easier to sell pallets of one that is being sampled and promoted by the manufacturer’s representative.

Pick a date. Look at other events that are coming up in your store and community. If you are in a college town with sporting events, be sure to check out the home game schedules: we try to avoid home football games and major community events. Beautiful, sunny days with mild temperatures work really well for an outdoor event. Look at the work flow in your store for things like changing monthly specials and shelf resets. Our experience has been that mid-month, in the spring and fall, works well for our store operations and for our customers. Having the sales in the same month each year has institutionalized our Truckload Sale; customers know when to look for it and plan for a big shopping day.

Evaluate your internal capacity. The event you are able to create will depend on your daily operations and the resources available to you. Do you have the staff to maintain in-store operations and run a second store in your parking lot? What will it take to get electricity to the location of your sale? How are you going to ring up groceries? Can you take credit cards? How much will it cost to rent a tent? How much will overnight security cost? Do you have room to bring the leftover product into the store? Do you have small refrigerators or freezers available to merchandise perishables? How are you getting full pallets of product off the truck?

Pricing and product mix
Evaluating sale leftovers has revealed price points and key categories that are consistently successful. By working with distributors and manufacturers, we are able to offer discounts of up to 60 percent off regular retail pricing. We offer an additional discount on full cases. The margins are slim, but we move the product quickly and try to minimize expenses.

Key items in grocery:
*Expandable consumables: 32 oz. juice, snacks and chips, salsa, energy bars, 6-pack sodas, energy drinks
*Pantry stuffers: cereal, rice milk/soy milk, fruit spreads, mayo, oils, pasta, pasta sauce, box meals/entrees, canned beans, refried beans
*Household goods: 12-pack toilet paper, dish soap, laundry soap
*Bulk: coffee, granola, dried fruit
*Frozen: entrees, convenience items, meat substitutes, frozen fruit and veggies, real meat (bacon, franks), sprouted breads
*Refrigerated (be conservative with order levels): tofu, basic cheeses, soy milk, 32 oz. plain/vanilla yogurt
*Key items in wellness: vitamin C, shampoo and conditioner, toothpaste, lotion, sunscreen in spring, cold season supplies in fall, protein powders, lip balm, bug repellent
*Key items in produce: seasonal items, packaged produce-bagged apples or potatoes, strawberries.

Creating and managing the event
Having a great team with clearly established roles is critical to the success of any project, and Truckload Sale is no exception. We have identified four main roles or leads for the event:
*Truckload Sale Lead: the one person who is in charge of making sure everyone knows what to do and has the tools to do it. He or she facilitates communication, delegate tasks and sets the timeline.
*Sales Team Lead: sets sales and margin goals, identifies key categories, creates a mix that represents all our key departments and creates a great shopping experience.
*Operations Lead: creates the physical store, complete with all the items necessary to shelter, merchandise, and sell product.
*Front End Lead: manages an efficient and pleasant checkout process.

This team works together to schedule, coordinate and run the event. Our set-up begins on Wednesday with the arrival of the tent. Product arrives on Friday morning, and a team of managers, stockers and administrative team members spend the day merchandising product, setting up check stands and preparing the tent for sales the next morning.

The end of the sale requires significant effort as well. Product is moved onto end caps in each of our three stores. Promotional pricing is managed in our POS system. Equipment is moved back into the stores or into storage. Empty pallets are collected and returned to the truck. There is a tent to clean out, the parking lot to sweep, and piles of cardboard to manage. Registers are closed out, deposits prepared, and sales numbers sent to accounting. A sales analysis is done, reviewing what items sold well, where we have surplus product and identifying things that just didn’t work at a Truckload Sale. The team debriefs about what went well and what we need to improve upon next time.

After nine years and 21 Truckload Sales, we have figured out a recipe that works. We cannot grow fast enough to meet the demands of the customers who line up to shop. The tent is packed full within the first 30 minutes of being open. It took years to create an infrastructure that can support $70,000 in sales from a tent in our parking lot, but it has been well worth the effort. The event has become part of what the co-op offers.

Jennifer Hileman is systems and planning coordinator at Bloomingfoods Cooperative in Bloomington, Indiana ([email protected]).

See other articles from this issue: #138 September - October - 2008
Files: