L

Gin—Spring 2012Daniel Frazier Maddie Griffith

Category Definition

Total category sales: $369,201,600 2007 sales: $138,739,800 Average % item on deal: 18.2% Not highly penetrated Supplier has control of category No private label available Strong national brands Many small “unique” suppliers

Ad Hoc Base

Item $ Item Buyers

Item Penetrati

on% Repeat

Buyers% Item on Deal

Gin 369,201.6 4,040.4 5.9 87.3 26.7

Beefeater 53,985.3 354.6 .3 36.5 15.5Bombay 11,944.1 144.4 .1 34.9 31Bombay Sapphire 39,146.7 490.1 .4 25.6 27.5

Seagram’s 45,116.9 761.5 .7 44.7 66.3Tanqueray 52,829.1 763.5 .7 35 59.1

Audit ResultsStore Total SKUs Unique SKUs

Crossover Liquor 62 6The Spirit Shop 43 6Weddington Liquor 42 -Friendly’s Liquor 34 1Dickson St. Liquor 32 -The Stellar Cellar(Memphis, TN) 33 4Cork & Bottle(Little Rock, AR) 29 1The Little Brown Jug(Pine Bluff, AR)

18 -

Total Number of SKUs in Audit: 100

Demographics Income above $70,000 2-member households No female head Empty nesters Senior citizens

Demographics Income above $100,000 2-member households No female head Affluent suburban spread Established couples Professional and managerial

employees

Demographics Income above $70,000 2-member households No female head Affluent suburban spreads Senior couples Established couples Professional and managerial

employees

Demographics Income below $50,000 Struggling urban cores Childless younger families Empty nest couples African American (non-Caucasian) Female & non-female head households Not employed

Manufacturer Dickson St.

Cork & Bottle

Crossover

Weddington

Stellar Cellar

GMSKUsFacing

38.71%4

12.5%

27.94%5

16.1%

24.41%7

15.3%

17.82%8

19.0%

18.14%4

12.5%GMSKUsFacing

19.90%3

9.4%

14.88%3

12.9%

18.98%5

8.3%

19.65%3

7.1%

17.7%3

9.4%GMSKUsFacing

39.56%6

18.8%

40.44%4

12.9%

31.45%5

11.1%

42.43%4

9.5%

26.86%4

12.5%GMSKUsFacing

33.53%4

12.5%

37.36%3

6.5%

35.97%6

8.3%

25.90%3

7.1%

32.74%3

9.4%

Category Scorecard

Gross Margin Evaluation

Bombay Sapphire has highest gross margins overall 200 mL: 57% 750 mL: 45% 1 L: 45%

Tanqueray has interesting gross margins 200 mL: 54% 375 mL: 47%

Gross Margin Evaluation

750 mL sizes had consistently higher gross margins Spruce Road Spirits: 62% Tanqueray #10: 58% Hendricks: 56% Corsair: 50%

Category is Cash Machine: High gross margins Medium sales volume

Competing Brands & Private

Labels Very strong national brands with loyal

customers in segmented markets 5 biggest brands account for 60% of gin

sales No private label products in this region Supplier has control over retailer; no outlet

for leveraging this control

Suggestions for Retailer

High gross margins Increased category sales Stock fewer SKUs

Reduced depth ≠ increased sales, but is an opportunity for higher gross margins

Leading brands are close substitutes

MAINTAIN!