Company Overview
Bernie’s Grocery & More is a retail grocery and
dollar store business serving the local neglected market for grocery items and general low priced merchandise. Located in
San Ysidro a municipality
of Sandoval County in the state of New
Mexico, an economically stable area, we appeal to the middle to lower class market segment.
In the summer of 2005, Christine Trujillo-Page, and Brian Page
recognized that there were no retailers available to meet the Grocery and merchandise needs of San Ysidro and the surrounding
townships. Recent and ongoing price increases in the petroleum industry and the distance to the nearest retailers, have increased
the demand for groceries and general merchandise needs of local consumers and commuters in the area. We saw this as a prime
opportunity to apply our marketing and customer service interests and experience to yield high potential profits and work
in the area of our greatest passion.
Market Overview:
For the past 10 years, the retail grocery and dollar store market
has seen exceptional growth, due in part to a more conscious consumer who is always seeking lower prices. Nationally, current
annual sales of retail groceries exceed $447 billion (2004 Food Industry Numbers). Analyst projections forecast 2.6% growth
in retail sales through 2010. The nationwide market is expected to reach $820 billion in the next 5 years with significant
market share held by wholesale retailers in metropolitan areas. Online sales pose a marginal threat to local retailers, as
the majority of customers prefer the personal service aspect and immediate purchase available only through a local retailer.
On-line grocery stores are projected to reach around 10 to 20 billion in sales by 2010. Although this seems to be a high number,
there is no evidence to support that such on-line grocery stores can or ever will have a significant impact on retail grocery
stores. This is especially true for Bernie’s Grocery Store where the area is compiled of more rural surroundings and
limited on-line use amongst the population. Statistics indicate a strong correlation between travel distances to major retail
chain stores and the amount of total revenue generated by rural grocery store locations. With 2.6 % growth in the grocery
store industry, all economic indicators lead us to believe that we can expect revenue growth parallel to and exceeding that
rate by 2008.
Market Strategy:
Bernie’s Grocery & More offers two distinct advantages
to the San Ysidro market we serve. First, we are the only retailer handling a full line of groceries and dollar store merchandise
within 22 miles; the nearest competitor Albertsons Super Market, is in Rio Rancho, NM—more than 44 miles round trip.
Second, we provide a value-added local service with a highly effective customer loyalty program that should anchor Bernie’s
Grocery & More securely as the source of choice for groceries and general merchandise in the San Ysidro and surrounding
communities. Our general merchandise and dollar store items will compliment the revenue for Bernie’s effectively. The
nearest dollar type store is located in Bernalillo, NM,
which is more than 48 miles round trip. We have planned a carefully focused, targeted media blitz surrounding our grand opening
to create high levels of visibility, with scheduled promotions to continue the momentum into 2008.
Location,Location,Location:
Bernie’s Grocery & More is located directly off the main
highway known as state Hwy 550 that runs through San Ysidro and connects to Rio Rancho on the East end and to Cuba and Farmington
on the west end. It is also the connection area to Route 4, which provides access to the Jemez Pueblo, Jemez Springs (tourist
area) and small villages such as Ponderosa. Our location will provide easy freeway exit and return as well as ample parking
space in a highly visible location.
The building is approximately 25-30 years old and served
as a Circle K "C" Store until 2005. The parking lot is made of black top and is approximately 150’ across and
offers two rows of parking. This appeals to our customers because of the easy access to the building and it is conveniently
located directly off of Highway 550. This location will attract commuters from Rio Rancho and Farmington as well as local residents and year round tourists.
The building is very much a part of our overall presentation to the
community. We are working with community members to create an environment that will make our customers more comfortable and
increase their shopping time and their desire to visit the store again. Our objective is to meet their shopping needs as well
as their product and support needs.
Customer Profile:
Our primary audience is comprised of customers between the
ages of 18 and 65, living in San Ysidro and surrounding areas, with incomes of $30,000.00, who typically already own a car
or home. Bernie’s Grocery & More meets their specific needs for every day grocery items and general products with
the only local selection and cost effective solution for their grocery needs.
Competition:
As noted previously, part of our purpose in starting Bernie’s
Grocery & More was to fill a clear gap in this market. We anticipate very little increase in competition from online resellers;
however, so many customers require personal attention and service with the convenience of location, that we expect online
retailers to actually drive business our way. Research has indicated that very few of our customers use the Internet to shop
and compare; but they want to do business with someone local, for immediate gratification and local selections at competitive
prices.
We believe there is enough of a market in this area to support as
many as 2 similar shops, and are currently considering adding locations of our own within 7 years, once Bernie’s Grocery
& More is running profitably.
Product Strategy:
Bernie’s Grocery & More has established direct relationships
with Kole Imports and Dollar Days who provide wholesale general merchandise, and indirect relationships with the two largest
distributors of grocery and dairy items in New Mexico. We
will offer a complete line of Frozen and fresh meats, produce, dry goods, perishables and dairy for retail consumption, as
well as after-market accessories and dollar store merchandise. Our direct relationships allow us to offer cost effective products
from these distributing companies that cater to a narrower clientele—at higher prices and higher margins for us. Our
relationship with major distributors gives us volume incentives and access to marketing funds to help promote distributor-sourced
products.
Marketing, Advertising & Publicity:
Initially, our marketing and advertising will position Bernie’s
Grocery & More as your hometown grocery store and merchandise mart. Launch promotions will be directed to our specific
market through a cooperative effort with the Jemez Thunder Paper with editorials to be placed in the Albuquerque Journal,
and to the market at large with billboard ads. Radio spots are planned for the first 2 months, and we plan to offer referral
rewards and include special offers at the checkout.
Local and regional media will be invited to our grand opening celebration
and press conference, and a charity auction is planned for our 6th month to renew interest and keep Bernie’s Grocery
& More in the local press.
Management:
Brian Page who has extensive sales and marketing experience as well
as over 10 years in management will run the day to day affairs of Bernie’s Grocery & More. We have hired Mr. Gomez
of Gomez Grocery a business owner for over 14 years who will act as a consultant for the purpose of initial set up and business
operations. To help ensure early success, we have aligned ourselves with the Small Business Association, and will meet periodically
with these local business owners to draw on their expertise and experience in this market. The New Mexico SBA is holding free
conferences every month that will address specific needs of the business owner.
Objectives:
Projected revenues for fiscal year 2008, without external funding,
are expected to be $180,000.00. Annual growth is projected to be 1.6%-3% per year through 2010. We feel that within 12 months
Bernie’s Grocery & More will be in a suitable position to add a sit down Deli and larger product lines to the inventory
while expanding our existing facilities. At this time, our objective is to secure a prominent market position. Our research
indicates that we should be able to meet or exceed projected revenues within 12 months.
To achieve our objectives, we plan to establish strategic partnerships
with specialty food companies that cater to the culture surrounding our market. We also will introduce a deli market and fresh
prepared hot food services to increase revenues and attract mid-day lunch crowds. This will require expansion from within
our existing space that is located next to our store. A simple wall can be removed to open the entire space and incorporate
the deli and hot food areas. At this time we will be able to expand our general merchandise areas or segregate them into their
own internal entity.
Risks:
Like any retail operation, there is always risk associated with owning a business. For
Bernie’s Grocery & More, we see our greatest advantage in the current absence of competition in this area. A significant
threat to our business would most likely derive from a sudden influx of competing retailers, backed by large entities, and
setting up multiple locations within the San Ysidro and surrounding areas.
In the event of a major change in the grocery market, we would expect
to see some reduction in sales; however a shift to 80% dollar store and general merchandise expansion would still drive sales
our way. To reduce a risk of this nature, we have explored the possibility of partnering with video rental and fast food companies
to promote both our businesses, and increase visibility to new customers.
Capital Requirements:
Bernie’s Grocery & More is currently funded by $8,000.00
in personal investments from the founders. Additional funding will be required to complete the necessary improvements to the
retail space leased at 23347 Highway 550, San Ysidro, NM,
87053, and to cover initial inventory and operation expenses for the
first 3 months of business.
Dosh Investmnts has also comitted to assist in some of the initial
capital needed for a share of ownership.
Based on our research and analysis, building on other business owners
experience and what we feel are sound business assumptions, our total capital requirements are for a $18,200.00 line of credit.
We intend to be profitable within the first year, and anticipate covering 100% of the line of credit from cash flow
within 18-20 months.
To accomplish this goal, we have developed a comprehensive plan to
re-invest in store growth on a continual basis using the following formula:
· Full unit cost re-investment
for reordering of sold products.
· Payment schedule for Utilities,
Lease, Insurance, and Advertisement.
· 10% Net return for Personal living
costs.
· 10% Net investment for product
expansion.
· 30% Net return payment to private
investor for the first 12 months or until initial investment paid.
· 10% Net return after initial
investment cost met on a monthly payment schedule (based on return %).
· Initial investment amount of: $18,200.00
To implement these plans we require
a loan or line of credit totaling $51,801.33 or the minimum amount of $18,200.00 for the following purposes:
·
Maximize sales with an extensive campaign to promote our products.
·
All Start-Up costs associated with the operational requirements of the business.
·
Initial Inventory for groceries and general merchandise sales.
·
Initial licensing and equipment needed to operate Bernie’s Grocery and More.
·
Associated costs of hiring contractors and professional services.
Conclusion:
The products sold by Bernie’s Grocery & More is clearly
needed by the surrounding communities of San Ysidro, giving us a prime opportunity to capture a large percentage of consumers
an ongoing basis. The consistent sales volume for this market support Bernie’s Grocery & more reaching its break-even
point by July of 2006 or within the 7th month of business and profitability in just 12 months. By driving
10-20% of profits back into the company, we expect to accelerate loan payments and be debt free by the 4th quarter of
2008, a full 1-year ahead of schedule based on retail grocery statistics.
After 24 months of field and industry research, and over 10 years as a marketing sales
professional, Brian Page can provide strong customer service and build lasting relationships within the community. Bernice
Trujillo a family member and wife of the late Bernie Trujillo has lived and worked in the community for over fifty years.
Brian Page and his wife Christine Trujillo- Page (Daughter of Bernie & Bernice Trujillo) moved to San Ysidro in March
of 2005 and found that there was no local retail outlet for groceries and general merchandise. Thinking that there must be
other people wanting to obtain groceries in the area, Brian Page began looking for people who shared this interest. Having
found a Small Business Development in Sandoval County, Brian began contacting people to find out the impact and success a retail grocery
store would have within San Ysidro. They were all excited with the idea of a local grocery store and general merchandise mart.
A large percentage of the community and surrounding residents are frustrated with the driving distances to a grocery store.
In less than a month Brian Page met with Bernice Trujillo, and began to formulate a plan to meet the growing demand for groceries
and general merchandise items in the area.
In June of 2005 Brian starting investigating the needed licensing
and began the process of planning the new business. Bernie’s Grocery & More is now ready to open a retail business
serving the local neglected market for groceries and general merchandise needs. Located in San Ysidro, New Mexico, this store
will serve the needs of San Ysidro, Ponderosa, Cannon’, Jemez Springs, Jemez Reservation and all commuters who travel
the Hwy 550 corridor to and from Rio Rancho-Albuquerque and Farmington, NM, and provide all the conveniences of a local retail
establishment.
With only distant retailers available to meet the needs of the
surrounding communities, Bernie’s Grocery & More is poised to take a front-runner position in this market, with
room to expand as the business grows to profitability. Recent petroleum pricing is creating a steadily increasing demand for
local retail business. We are excited to have this opportunity to apply our desire to serve this community with interests
and experience to meet a need we had experienced ourselves. At the same time, we step out of the corporate environment into
a growing, high-margin business that allows us to work in the area of our greatest interest by serving the communities in
which we live.
Customer Profile:
Our primary audience is comprised of customers between the ages of
18 and 65, living in San Ysidro and surrounding areas, with incomes of 28,000.00 to $30,000.00, who typically already own
a car or home. Bernie’s Grocery & More meets their specific needs for every day grocery items and general products
with the only local selection and cost effective solution for their grocery needs.
More than 70% of our customers fall into these parameters:
Local Worker & Commuter
Age: 25-55
Income: 28,000.00
to 35,000.00
Gender: 40%
Male 60% Female
Family:
Married
Geographic:
Rural Community
Occupation:
Customers Service Centers- Construction-Non-Retail Work
Attitude: Family
Orientated-Religious-Social
Non
Local Highway Commuters
Title: Business Professional
Works In Rio Rancho or Albuquerque
Authority: Decision-Maker,
Influencer, Technical Advisor, and Initiator
Viewpoint: Social with
good demeanor and willing to travel to live in less populace
Emotional Influences:
Social Acceptance, Religion, Family & Friends, Wants acceptance by peers
Practical Influences:
Saving Money, Efficiency, Hard Work
Education: College, Technical School,
and High School
Limitations: Geographical
The other 30% fall within roughly 15% of these ranges, so our market
is relatively cohesive extremely, making it easy to identify and reach these customers with our marketing efforts.
Competitive Outlets:
Starting Bernie’s Grocery & More meets our own need for
groceries as well as the needs of an expanding pool of prospective customers. To date, there are no direct competing retailers
in the immediate vicinity. There is some competition from the Giant C store offering limited products similar to ours.
Giant Convenience Store DBA: Mustang, experiences revenues averaging 50,000.00 to 90,000.00 a month. This is in most part
to their liquor and wine sales and gasoline that has captured the surrounding communities. Giant C-store is the only outlet
for alcohol sales within 10 miles or more. Giant C-store sells some basic food items such as snacks and a small
amount of dairy, sodas, dry canned goods, and lunchmeats. Based on their pricing for eggs and milk at almost 20% above our
own margins, Bernie’s Grocery will not realize any loss or impact to this competitor. A majority of all sales for the
Giant C store comes from Gasoline and Alcohol sales which one in every 3 customers are buying (based on personal survey at
location). We foresee only a gradual increase in competition from online resellers; however, as so many customers still want
the personal touch that can only be found at a “brick & mortar” retailer.
We also offer a clean friendly family environment without the sales
of pornography or alcohol with fair to moderate prices to meet the customers’ budget. As a result, we fully expect that
convenience store retailers will actually drive business our way. We have established that many of our customers do not use
the Internet to shop and compare; but they want to pick up and hold produce and groceries; inspect it—before they make
a purchase. And they want to do business with someone local, for immediate gratification and saving on the time and cost of
driving 44 miles round trip to the grocery chains in Rio Rancho. Based on our own experience and extensive research, we believe
there is a large market in this area, and expect that as many as 2- 3 similar shops, (several of them ours in the near future)
can operate profitably for an extended period of time. Since we are currently considering adding locations of our own in coming
years we have already identified several potential locations and begun a dialog with property owners and managers.
We are targeting at least 200-300 average turns annually for
each of our products in the overall grocery category. These products usually involve a shorter sales cycle, and 200 turns
will help to ensure the desired sell-through and product rotation. Product turns in the dairy and meat category should turn
faster, at 500 turns per year.
We have successfully established pricing arrangements with manufacturers
and distributors that allow us an average 34% margin on groceries and 40% to 50% margin on general merchandise crossing all
product lines and categories. This provides a sufficient buffer that we can safely run specials on key products roughly once
per week, even occasionally going to a loss leader, should that be deemed appropriate under certain circumstances.
Initially, our marketing and advertising will position Bernie’s
Grocery & More as the community retailer providing grocery and general merchandise sales and friendly hometown service.
Launch promotions will be directed to our specific market through a cooperative effort with our vendors supplying merchandise
and grocery items, and to the market at large with newspaper ads. Radio spots are planned for the 1st quarter of
our second year, and we plan to offer repeat shopping rewards and include special offers at the checkout.
Local and regional media will be invited to our grand opening celebration
and press conference, and a charity auction is planned for our 6th month to renew interest and keep Bernie’s Grocery
& More in the local press.
We noted previously that the Internet serves our customers primarily
as a shopping tool to place orders for later pick or delivery to the homes of the handicap or seniors. We will also include
printable coupons that customers can bring into our store for redemption on selected products. We anticipate the order
system to be in place within 30 days of the store opening.
In-Store
Merchandising:
We believe that our customers are generally very responsive to end-cap
displays (with no price reduction) customer loyalty programs and window ads. To capitalize on this tendency, we will offer
buy-one-get-one free or 50% off and offer repeat shopping rewards with in-store or manager’s specials and use in-bag
fliers.
Brian Page will manage
Bernie’s Grocery Store & More. Bernice Trujillo maintains strong ties to the community in which she
serves and has worked hard with the product selection to insure a successful result in a relatively short time.
Brian Page, the store manager has worked in commercial and retail
sales for over 10 years. Brian Page is currently working as a Regional Manager for the largest Cable T.V. marketing company
in the US and has filled the roll
of Vice President for several television contract service companies. Additional experience in demographic marketing
strategies and a formal management and marketing education will give the necessary skills to direct the operations of Bernie’s
Grocery & More, with primary emphasis on streamlining operations and implementing cost-saving alternatives.
Based on our research, our own personal experience, and careful scrutiny
of the specific audience and area where we are focused, we are convinced that the market for Bernie’s Grocery &
More will support the accomplishment of our stated goals and objectives.
We have built in specific means of measuring our effectiveness in
our marketing efforts, engaged with strategic partners, and secured co-marketing relationships to support our success. The
market is still wide open. We fully intend to maintain the highest standards and become the shopping destination for San Ysidro
and surrounding areas.
Approaching our goals aggressively will allow us to build an even
stronger position than indicated in this plan. Our most recent test marketing indicates that demand may be greater than originally
projected. With careful monitoring, we will be prepared to respond immediately to such shifts in the market, and protect our
market share and profitability.
We are excited about the prospect of turning this business into a
recognized contributor in our community, effectively meeting the needs of our customers, and growing with them as the market
and their needs change.
We will create a unique approach and product line selection that
will become a business trade mark and possibly lead to a franchise opportunity.
Mission Statement:
To provide the highest level of customer service and always treat
others as you would want to be treated. To always seek opportunity to help a member of the community and preserve the
meaning of integrity through honest work. Always recognize success as a gift from God and use it as he would expect of us.
"Reach out to the community and they will reach for you"
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