ATLANTA —True Value president and CEO Lyle Heidemann delivered a pointed message to co-op members at the fall market in Atlanta last month: Let’s work toward being more alike than different.
At the center of this message is Destination True Value (DTV), the updated, customer-friendly store format introduced by the Chicago-based co-op a year ago. True Value currently has about 30 new and remodeled DTV stores open—a number they hope to increase to between 100 and 120 by the end of 2009.
“We recognize that 4,000 people are not going to remodel their stores, but we believe a portion of the decor elements are right for every store,” Heidemann said. “It doesn’t matter how old the store is or where it’s located; members all need to be migrating to the DTV format in some way.”
Heidemann said that while each store is unique and should have certain niche departments, within the core hardware categories, “a hammer is a hammer, a screwdriver is a screwdriver, a plumbing fitting is a plumbing fitting.”
“From an efficiency stand-point, it’s better for us to be more alike than different,” he said. “Are you giving the consumer a consistent message about the store? You have to look at the big picture.”
Steve Pfeifer, owner of McCoy True Value Hardware in Indianola, Iowa, agrees that a consistent store format generates comfort at the consumer level. He compared the goals of DTV to the familiarity consumers have with certain grocery chains. “When you’re traveling in another town, to be able to go into the grocery store and it’s laid out the same way, you feel like no matter where you are, it’s familiar,” said Pfeifer, who is considering a DTV conversion for his 10,000-square-foot store. “The same could be said for True Value stores.”
Lake Shore True Value in Cedar Lakes, Ind., underwent a remodel under DTV, expanding from 9,800 to 17,000 square feet and adding rental and lumber departments. Co-owner Marion Bunge said that since the store re-opened in September, her customers have commented on the cleanliness and brightness of the new format, as well as how easy it is to get to everything and the depth of assortments. “We had doorknobs before,” Bunge said. “Now we have nice, fancy doorknobs. It’s a little more upscale.”
Many members have already started heading in this direction by purchasing Certified True Blue Assortments (CTBs), the co-op’s recommended product assortments started four years ago by former senior vp and chief merchandising officer Steve Mahurin, now an executive at Office Depot. The numbers now read as follows: 110 line reviews, 422 CTBs, 110,000 CTBs sold to True Value members.
“We’re helping members up date their assortments and make them relevant,” said Mike Clark, who replaced Mahurin in April and continues to lead the charge—including 18 CTBs unveiled at the market. “It helps members be cost competitive. It makes sure they have the right stuff, are profitable and are on trend,” Clark said. “And it brings them closer to DTV.”
Tony DeSanto, owner of Hillside True Value in Kenosha, Wis., has purchased a couple dozen CTBs for his store over the last few years. He said they give a “representative sample” of what should be in the store. Shelley Rugg, store manager for Glendive True Value in Glendive, Mont., said that about half of her 30,000-square-foot store is already made up of CTBs, which she likes because “they have a lot of the A and B items needed to finish projects. And we save a lot of money.”
In terms of co-op health, Heidemann painted a rosy picture for True Value members, saying the company expects to report a sales increase of 2 percent to 3 percent and a net margin increase of more than 50 percent for the third quarter. He stressed the importance of sharing information, pointing out that True Value has been collecting retail sales data from about 1,200 stores, a group that has seen an increase of 1.4 percent in the core hardware and paint departments.
“I think gas prices have caused people to do more small projects around the home, condense shopping trips, shop closer to home,” Heidemann told HCN. “In small towns, where the closest big box is 20 miles away, they may still go the big box, but not as often. I think what the local retailer has to do is recognize that if they’ve made the decision to come to the local store, you’d better be in stock.”
In slow times, retailers tend to reduce inventory, stop advertising, shut some of the lights in the store—all to save money. But Heidemann insists that it’s important to do the same things in bad times as in good, such as keeping the store well-stocked and well-lit. “And if you’re going to reduce inventory, do it on the C and D items, not the A and B items,” he added.
The market also featured a Greener Options display, with more than 2,000 multi-category environmentally friendly products, as well as extensive new products and giftware sections. One of the most striking are as was the 12,000-square-foot Patio Courtyard, complete with working fountains and ponds as well as a wide array of patio sets, fireplaces and fire pits, grills, pots and planters and other seasonal merchandise.
“Our lawn and garden and seasonal departments are the fastest growing of the last few years, partially because consumers are modernizing their patios and decks—whether we’re talking patio sets, grills, statues, fountains,” Heidemann said.
Within outdoor living, the solar lighting category has exploded, with stores selling out of the key items from the last market—prompting True Value to expand the assortment. Other big sellers are pottery items, cast iron figures and decorative watering cans. According to Clark, the emphasis on outdoor living goes hand-in-hand with True Value’s other goals. “This category is a key part of DTV, as it allows us the opportunity to speak to the female shopper,” he said.