In summing up the secret to the resilience of personal care and health group Clicks, CEO David Kneale says it’s about going back to retail basics and banking on the “you pay less at Clicks” catchphrase. This seems to be a boon for the retailer, even when consumers are facing sustained rising costs, which will likely limit their spending power. Going back to retail basics for Clicks means offering value to customers through its wide range of products, being competitive on pricing and good customer service. And there’s no doubt that this is reflecting well on its cash generation power. Underscoring this is that Clicks has the highest return on equity in the retail sector – about 53.1% for the six months ended February 29, 2016 – positioning …show more content…
The company has been aggressive in growing its market share across all its categories: pharmaceuticals, skin care and beauty, hair care and baby products. It has more market share in skin care of about 27%, followed by hair care (26%) and pharmaceuticals (19%). “Consumers are always looking for value and we are constantly investing in value,” says Kneale. It has largely relied on markdowns and promotional specials to drive up sales and volume growth. Group retail sales for the period grew by 13.4%. Just like other retailers, Clicks has been aggressively investing in price and deterred passing on higher costs to consumers. Its selling price inflation – a key metric used by retailers to assess the price movements of their selected goods – was contained to 4.4% and expected to be between 4% and 5% for the year. Although inflation will accelerate, Clicks’ focus on beauty and skin care will likely make it defensive. Says Kneale: “beauty is seen as an affordable luxury. You might not buy the dress but you will buy the lipstick even it means switching to generic …show more content…
This category includes The Body Shop (which Clicks operates under a franchise agreement), fitness brand GNC and accessories label Claire’s. Its wholesale pharmacy business UPD grew sales by 12.8%. Its armoury for the half-year was a capital expenditure (Capex) of R203 million which helped Clicks to expand its footprint to 496 stores and 384 pharmacies. “Clicks must be one of the few companies currently reporting record Capex spending,” says Rexsolom Invest portfolio manager Anthony Rocchi. The company sees more scope to expand its store and pharmacy footprint by between 25 to 30 stores per year. However, the shortage of qualified pharmacists in South Africa might undermine its expansion ambitions. “We can employ non-South African pharmacists that are qualified in the country. Plus we are building a good pipeline of pharmacists with our bursary programme, which gives out 100 bursaries every year,” he says. Dis-Chem But the pharmaceutical space is competitive with many independent companies in the market, among them, privately owned retail pharmacy Dis-Chem. The company is positioning itself for a potential JSE listing, with Dis-Chem director Rui Morais saying it has appointed advisors to take it through the IPO process. “We are currently going through the preparatory work,” Morais tells
According to Kantar Retail, most of Target’s shoppers are younger on average than its rivals, and more educated. That means it has to consistently offer something different and appealing; it emphasizes more on the latest-trend apparel, eye-catching home décor and exclusive designer merchandise than its competitors. This results in a willingness to pay a bit more for items by customers who are willing to pay a bit more. Moreover, this successful
... Thus, the firm’s pricing policy should be flexible enough not to discourage the price-sensitive consumers and yet allow the company to sustain ever increasing product and service development costs. Also, mergers and acquisitions could be used by the company to its advantage. That would follow in the footsteps of the CVS recent acquisition of Arbor Drug and Revco and comparable transactions performed by the CVS competitors such as Rite Aid acquiring Marco, Thrifty Payless, and K&B. M&A practices make sense as they reduce competition, increase the customer base, and provide convenient locations for the existing customers.
Nevertheless, it must “defend” its current market share if not increase it, by maintaining premium quality and develop innovative products. The marketing mix strategies will effectively achieve targeted revenue and profitability in the near future.
I would suggest that they incorporate more diversity in their ads and campaigns to reach different ethnicities if they want to continue to expand. Also, in stores, particularly the Willow Grove, PA location, is very large and spacious. Upon entering the store it is primarily women’s apparel and accessories, as well as men’s. Maybe the company can incorporate more of its products in this location, to provide consumers with more of a product assortment.
We strive to be the number one provider in the United States by investing not only in our company and technological advancements, but also in the communities in which we serve. Whether our customers are new to this world or our veterans, we know that our company can provide them with the newest and most effective products and services, while promoting the healthy communities in which they live. Through our valued employees, CVS is able to provide quality services and quality products. Retail Pharmacy Growth Strategy: CVS has managed to grow considerably in the past few years with the help of acquisition of beneficial companies and integrated the operations of these companies by creating synergy to drive higher margin and greater economies of scope. CVS is building more and more pharmacy stores in convenient locations.
Kohl’s also boasts a loyal customer base and strong brand equity. These strengths are critical to offset their weaknesses. Flaws include an imbalance on sales for men’s products and a lacking online presence. (Kohl's Corporation, n.d.) Another way that Kohl’s is actively counterbalancing their negatives is by capitalizing on opportunities. Kohl’s has found that their beauty sections are an immense source of opportunity. As a result, the company is expanding those departments in an effort to capture those sales that would otherwise go elsewhere. (Wahba, 2014) Finally, Kohl’s keeps the knowledge of their threats at the forefront of their decision-making. They understand that their coupon system can be abused and cause profit losses. They also recognize that price wars in their industry can also be very damaging. As a result, they are working towards more secure methods of offering savings and strategically making efforts to remain the leader for price setting. (Wahba,
Maxx benefits from chaos by picking up the pieces, merchandise at a discount, when other retail stores close, or have overruns, or unexpected changes in demand and in return pass these savings on to their customers who shop for value (Levine-Weinberg, 2016) This is the demand-side benefits of scale when the consumer rather pay less for name brand merchandise than to pay more for the same designer in the department store. The stores that where having difficulty in the retail market left themselves vulnerable by not defending their position and T.J. Maxx proactively attacks this opportunity with its purchasing power and passes the savings to its customers. This proactive process of attacking and defending is what Wee (2016) calls the holistic and balanced perspective of handling competition. Moreover, this business warfare strategy of attacking struggling competitors is called offensive marketing warfare strategy (Grewal, 2014).
The ecommerce industry is growing faster than ever. TJ Maxx needs to start focusing more on ecommerce not only to keep up with competition, but also to make sure they do well during weak economic periods. ecommerce, overall, tends to do very well during lackluster economic times. TJ Maxx will be able to cut costs more easily the more they expand their ecommerce business. Our business idea will allow them to expand their ecommerce as we will take over their website and delivery. TJX Companies’ three ecommerce sites accounts for only about 1.0% of the company’s total sales. However, the online channel is a key growth driver and TJX is taking initiatives to improve its online business. The ecommerce sales
And we will purchase capacities when plant utilisation above 90%. This will expand the business size and have a positive impact on economies of scale. Composed with High End and Size products transfer into Traditional and Low End, we have multiproduct in targeted segments. “Higher firm-level ability raises a firm 's productivity across all products, which induces a positive correlation to a firm’s intensive and extensive margin” (Bernard, Redding and Schott 2006). This means with an effective business strategy and management, businesses can boost sales of all products within the segment. With a larger product profile for Traditional and Low End, it works to generate larger market shares. Refer to Graph 4 and 5, Digby sold twice units of products than its core competitor-Baldwin by having Daze and Dixie in its Traditional segment, which drives its segment market share to double Baldwin’s. The boost in sales and market share prove the correct implication of the
The strategy of WFM, co founder Mackey, is to continue offering healthier options for its customers. The movement into Canada and the UK in the last few years, lays the footprint for additional global expansion. Mackey intends to increase WFM to 1000 stores. The question is whether it will happen through acquisitions or new store locations. The answer based on their history is a combination of both. The store in Canada opened in 2002. Since brand recognition is not as strong, the store struggled somewhat in the beginning; however, the expectation is that it will grow to one billion in the next ten years (Patton, 2013). The stores in UK, which are in the greater London area, have received mixed receptions, and some stores are selling well while other locations are not. However, Mackey is not deterred and believes that longevity will produce the desired results.
... strategy of cutting cost is planned in the next one or two years by 2016. The target for online shopping that the company estimates to increase by 8 million people is to be achieved by 2020.
Historically, Dollar General operated in a highly price sensitive market segment, with 55% of its consumer base earning an average annual gross income of less than $40,000.[2] To attract these customers, Dollar General employed an Everyday Low Price strategy similar to Wal-Mart’s. Thus, keeping costs low and driving high traffic volumes were critical to the company’s financial success. Dollar General achieved this strategy in several ways, including keeping rents and labor costs low, locating in low-income, high traffic areas that offered consumers few substitutes, and offering a wide variety of popular CPG and white label goods.
In 2016, Bed Bath & Beyond had the largest market share of any home goods retailer in the country with over ten billion dollars in sales (Statista, 2017). The next closest in sales was Ikea with just under seven billion in sales (Statista, 2017). Bed Bath & Beyond appears to be thriving in some areas; they have an efficient store set-up, a variety of products that appeal to their multiple target markets, and the supplier network to keep up with any fluctuation in demand (Zacks Equity Research, 2017). However, there is a multitude of options that Bed Bath & Beyond can use to improve their sales. For example, they could begin by assessing their products and inventory since the economies of the countries that Bed Bath & Beyond has stores in are
Household and personal care product companies are making efforts to stimulate sales in a variety of ways, such as entering new markets, creating new product categories, adding new distribution channels, and acquiring (and divesting) businesses to be able to compete in this highly competitive industry.
In turn the sales of products and services grew 8% over the same period of previous year, but there was a reorientation of its premises, reducing the share of its Full Line Stores, based on its retail business (78% of the physical space available for sale), and giving way to growing its chain Home Store (offer more specialized products), which nearly tripled the footage of its stores between 1995 and 1997.