A Unified Direction

New chain identity supports changes in merchandising

Like an athlete preparing for a big contest, The Pantry is focusing on retail fundamentals to better compete in today's complex, customer-driven marketplace.

Now that the retailer has more fully digested its acquisitions and moved into a single store identity consolidated under the Kangaroo Express moniker, all 1,650-plus stores are moving in one direction, unified by chainwide merchandising and marketing plans. Technology programs have been implemented to facilitate information flow and tracking in nearly every conceivable area, ensuring that planning, ordering and pricing consistencies are successfully achieved. Both shelf- and backroom management are now tools for growth, fueled by verifiable and constantly updated information.

Kangaroo Express has come a long way from its most recent past of dissimilar convenience stores with a menu of names scattered across the southern United States.

Jon Bratta, vice president of merchandising — packaged goods, told Convenience Store News that at The Pantry, “Job one is more like job three” and all of the points intersect. “It's about improving our processes and function in three separate areas: category planning, space management and inventory control.”

Ultimately, it all supports one identity for consumers: Kangaroo Express.

For Bratta, a relative newbie at The Pantry since he arrived less than a year ago from BP's ampm stores, the changes are all about good, basic category management.

Bratta's job is to help maximize the growth in the packaged goods categories and ensure that all of the forces align with customer needs. “It all starts with a strong operational foundation,” said Bratta. “The category plans are only as good as they can be implemented at the store level.”

At The Pantry's Kangaroo Express stores, the focus is clearly on taking care of business — as it always has been, just better and more efficiently. And now with more up-to-date systems that link all the stores, regardless of when they were acquired, the chain functions as one cohesive unit and not as disparate entities. The management team, store-level personnel and the company's suppliers are working together through a defined, integrated planning process that begins with goal setting and moves to clearly defined strategies and tactics that are based on a thorough internal and external evaluation.

In addition, Kangaroo Express is bringing in key suppliers to help its executives better understand consumer behavior and product trends so the growing chain can tap into the best resources available to aid its growth category by category.

Equally important, noted Bratta, are the contributions of the company's internal stakeholders such as sales operations, information technology, finance and more, all of which are contributing their expertise to drive efficiency, sales and profitability.

While the process is ongoing and will always be fluid, the early results are exciting: the chain is getting better at controlling and managing inventory levels by SKU and ordering more effectively for each merchandise category. In the case of the retailer's confectionery program, for example, the changes in minimum order quantities have meant on-hand inventory has begun to decline toward the projected levels with no negative impact on sales, and the available inventory is fresher.

With regard to space management, Kangaroo Express is migrating from a supplier-driven approach to an internal driven model, said Bratta. The goal is to have a more hands-on approach that delivers programs fitting the customers and stores, and tapping into current consumer trends.

Bratta said he's challenged his team to remake and modernize the stores' assortment to better appeal to today's customers on an everyday basis and to increase the overall appeal of the merchandise assortment to garner more “fill-in” or supplemental grocery shopping dollars in those categories where convenience stores are visited for mainly fill-in shopping occasions. In these categories, Kangaroo Express will add packaged goods items from outside the commonly found c-store fare, offering more goods typically found in grocery stores. To accomplish this, Kangaroo Express is adding sourcing partners to help them evaluate products that best meet their goals. In the categories that are staples in the c-store world, Kangaroo Express will continue to optimize its assortment with new items and elimination of slow sellers or products where the assortment is deeper than sales levels indicate they should be.

“Ultimately we're changing the process on how we think of categories and squeezing every penny we can in sales out of those categories by having a more innovative product assortment,” said Bratta.

Kangaroo Express will keep an eye on both product- and brand-centric fare, he said, announcing that many categories will now implement a flex space program, dedicating as much as 10 percent of its packaged goods space to local or store-specific products geared to local tastes. Store and field management will decide how best to assort this area to meet the needs of each store's customers, satisfying them with locally purchased goods authorized by the chain's category manager. This is an entirely new procedure for The Pantry.

While picking the right products is important, so is getting the goods to the stores at the right time. Bratta said the chain is working toward being faster to market on new items and as far as the new flex space goes, making a fast recommended deletion decision. He wants local management to have the ability to make substitutions from something that's sitting on the shelves or turning slowly to something that's selling better, and noted “it's a place we need to evolve to quickly.”

As it relates to private label goods, Bratta said his team is currently assessing the existing private label program, evaluating SKUs for their value to the customer as well as to The Pantry. “We'll play where it's appropriate,” he said.

Bratta believes the chain has the potential to add premium private label goods and maintain a two-pronged private or proprietary program that includes both premium and value private label products, even within the same category. Bratta is keeping his eye on “where we can intelligently expand” the private label offerings. He's expecting the chain to broaden the private label assortment in various snack categories, while either improving branding in other categories or dropping out of them if they do not make sense from a customer standpoint. Currently, The Pantry offers store brand water, candy, meat snacks, various non-food items such as batteries and automotive accessories, among others.

“We're going to evaluate our program,” said Bratta. “We will make the assortments more relevant to consumers, changing and/ or modernizing them, creating umbrella brands,” he said. Bratta further noted the c-store chain will innovate when and where possible, or where it can be best serviced by a national supplier, it will go that route. Ultimately, the goal is to provide value and margin enhancements to Kangaroo Express.

Bratta said he's challenged all managers to look at categories in which the company can compete and be relevant in a different way. This includes looking at merchandise categories not previously considered by the chain. In one category, Bratta told CSNews that Kangaroo Express stores will soon introduce value-priced earphones/earbuds from DGL in multiple colors that are bright and youthful to attract younger consumers, as well as LED flashlights that have performed very well in other channels of trade as impulse items.

His team is open to limited-time offer products, as well as category refreshes. In packaged food, Bratta said “we are open to suggestions from our suppliers.” Currently being considered are new items in the traditional c-store meat snack category. Bratta remarked that “flavor and style innovations” in meat snacks may very well mean the chain might step up its offerings beyond the commonly expected SKUs, and at the same time, pare back its offerings that are repetitive in nature.