Store strategy design and optimization

Store strategy design and optimization

Client Challenge

A dominant $3.5 billion store regional grocer was challenged by declining space productivity and lagging profitability. They were committed to realigning their departments’ size through a new store format and space strategy.

The store format and space allocation needed better alignment with core shopper trip types (e.g., those trips that drive loyalty and store choice) with an innovative store design; however, the internal teams lacked the required capabilities and tools.

Radian’s Impact

Developed clear strategic objectives for the new store format in terms of consumer engagement, merchandising priorities, sales and profitability.

Created department and category section size recommendations that optimized sales impact within the store format constraints and strategic objectives.

Identified categories to exclude (i.e., those that do not generate material sales or margin nor drive store choice) and focused on optimizing the assortment for critical categories to deliver a more relevant shopping experience for the consumer.

Results

Radian’s structured, cross-functional approach to store strategy design and optimization ensured alignment of space allocation recommendations at the store, department, and category levels.

Utilized comprehensive analytical toolkit to assess store performance, evaluate store clustering, and optimize space and assortment productivity.

Generated optimized category space allocations and new store schematics aligned with the new customer strategy.

Store design and space optimization created sales improvement of +1% to +3% for center store categories (moderate gains for dry, with higher gains for frozen and dairy) while Fresh departments realized double-digit improvement.