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Welcome to the Tradavo Blog!Offering articles and advice related to the supply and daily management issues of special market retailers!
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Avoiding Painful Mistakes
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Posted by Bobby Martyna on Tue, Jul 13, 2010 @ 11:37 PM
Painful Mistake #1 - Waiting for the Truck
 For a long time, the only option for small format retailers, including hotel managers, was waiting for a truck delivery from the local distributor to show. If a hotel is located in a major metropolitan area, a weekly delivery has been possible, but far from optimal. But for most locations, there have been two delivery choices -- sometimes and never.
The reason is simple -- it costs between $50 and $100 for a distributor to make a stop at a hotel. For wholesale orders of less than $1,000 -- or for locations with irregular ordering patterns (that would be most, if not all, hotels), it is uneconomical for a local distributor to service the location. As a result, deliveries are skipped, orders are short shipped and fuel and delivery surcharges are assessed. Not good for the guest experience or for the profitability of the hotel pantry to say the least.
Master distributors, also known as broadliners, do a very good job delivering food service orders for hotel restaurants and are much more reliable. But not all hotels have restaurants -- and in any event, the selection of retail items offered by broadliners is subpar -- they just are not effective wholesale distributors. While prices may be low, case packs are too large and item sizes are too small. If items don't sell at retail, getting them at a good price is false economics. As a result, broadliners are not a viable option for hotel retail.
Some local distributors, relying on cigarettes, candy and convenience stores for 98% of their business, have attempted to service hotels. At best, deliveries are made weekly on a designated day of the week -- but weekly isn't nearly good enough for most hotels -- and requiring orders to be delivered on a fixed schedule makes managing inventory very difficult where there is limited space for backstock. Additionally, cigarette and candy distributors carry primarily lower quality consumables that are meant for the convenience store customer -- because most of their profit is made on tobacco sales. These types of products sell well in very few hotel locations. Again -- false economics.
For these reasons, the local cigarette distributor as a hotel market supplier has resulted in a very bad experience for the  hotel -- and often, in bankruptcy for the distributor, including QDN and Miller Distributing Corporation in Nashville, TN -- others had more business sense and simply left the market.
Interestingly, a major hotel group purchasing organization -- who understands the truck delivery model for food service -- has failed to understand the business model and economics of truck delivery for hotel retail -- and as a result, is recommending a cigarette distributor as the only solution for their hotel retail customers. Also since cigarette/candy distributors are not able to obtain traditional Direct Store Delivery (DSD) products, such as Ben & Jerry's, Haagen-Dazs and Frito-Lay, they are more than likely selling you diverted or grey market products (more on that in another post). Questionable judgement on the part of the GPO, to say the least!
In our early days, Tradavo built a network of local distributors in an attempt to provide wholesale ice cream to our national footprint of hotels and small format retailers. Frankly, it was an unmitigated disaster, and we very quickly walked it back. Customers were left waiting for weeks, orders were short shipped and invoicing was broken. Since we dropped the program and began shipping wholesale ice cream and frozen dinners via FedEx, our customer satisfaction levels have skyrocketed.
Our experience, after examining all possible delivery methods, has led us to conclude that the best, most economical and most extensible solution involves a truck -- but not a truck from the local cigarette distributor. It's from FedEx and UPS. The advantages of the Tradavo model, which relies on the common carrier distribution network and not on local cigarette distributors, are formidable:
- FedEx and UPS deliver to every zip code in the US for Tradavo customers, six days a week - TODAY
- Customer orders can be placed and delivered as soon as the next business day, and are delivered during business hours, not at 3 AM.
- By using a national network of warehouse partners, Tradavo has far more categories available, including natural/organic, wholesale ice cream and frozen products, gourmet, toys and games, general merchandise and a deep assortment of products within each category.
- Our warehouse partners compete with one another to bring you the lowest prices, greatest selection and highest service levels.
- Because we have a national footprint, we can service all hotels within an owner/operator portfolio with the same high caliber of service levels and low prices.
- Not being bound to a single cigarette distributor with a single warehouse allows us to drive economies of scale, resulting in lower prices. We have lowered prices by as much as 26% in the last year alone
In short, the truck delivery model sounds right, but falls far short of the mark. Our most sincere recommendation is, "Don't wait for the truck".
If you are interested in giving the Tradavo program a try, go to our Registration Page to get started right away!
Happy Selling!
Bobby Martyna
President and CEO
Tradavo, Inc
Follow me on twitter -- @bmartyna
Posted by Janine Roberts on Sun, Apr 18, 2010 @ 10:51 PM
Healthy Meals and Ice Cream Are Must-Haves The sun is back and summer travel is just around the corner! Make sure your assortment is ready for family vacation sales and also for those business travelers who are trying to shed a few pounds for the warm weather! Steps to take to get ready for summer: 1. Quick Meals - Exchange some of your hot soup and chili offerings that were  popular during the cold months for healthy rice and pasta bowls like Bowl Appetit and Annie Chun's. 2. Health Friendly Frozen - Lighten up the frozen food category from hot, heavy meals to a few of the best selling healthy options like:
- Stouffers Alfredo Macaroni and Cheese with Chicken, 10 Oz, (1 Count)
- Stouffers Smoked Turkey Club Panini, 6 Oz, (1 Count)
- Lean Cuisine Glazed Chicken, 8 Oz, (1 Count)
- Lean Cuisine Lemon Garlic Shrimp, 12 Oz, (1 Count)
- Amy's Kitchen - Natural and Organic Meals
3. Ice Cream. Ice Cream. Ice Cream. You cannot have too many ice cream  options during those hot summer months no matter what guest profile you serve! Below are the Top 10 Best Selling Ice Cream products (in order of popularity) from Summer 2009 to help you plan for the season:
1. Ben & Jerry's Cherry Garcia Ice Cream, Pint, (1 Count)
2. Ben & Jerry's Chocolate Chip Cookie Dough Ice Cream, Pint, (1 Count)
3. Nestle Toll House Chocolate Chip Cookie Sandwich, 7 oz, (12 Count)
4. Ben & Jerry's Chocolate Chip Cookie Dough Cup (w/spoon), 3.60 oz, (12 Count)
5. Breyers Oreo Cookie Ice Cream, Pint, (1 Count)
6. Dreyer's Dibs Vanilla Ice Cream w/Nestle Crunch Coating, 4 oz, (12 Count)
7. Häagen-Dazs Vanilla, Pint, (1 Count)
8. Nestle Drumstick King Size Vanilla/Chocolate, 7 oz, (12 count)
9. Häagen-Dazs Chocolate, Pint, (1 Count)
10. Häagen-Dazs Bar Vanilla & Milk Chocolate, 3.67 oz, (12 Count) *all products listed are available through Tradavo's Frozen Program.
4. Kid Friendly Fare - Be ready for vacation travel, camps, sports groups and more with kid friendly meal options and snacks.
* Meals: Mac and Cheese, Pizzas, Hot Pockets
* Snacks: Wonka Gummies, Skittles Bite Size Candies, Welch's Fruit Chews Whether you are getting ready for the bustle of family vacation travel or just trying to cater to the health conscience business traveler, it is important to make changes to your retail assortment during the summer months. Need help selecting items or prioritizing products within the shelving space you have to work with? Contact Tradavo Retail Services today and they will help you select, price and merchandise a winning assortment for any guest profile no matter how big or how small your store is! Email your request to design@tradavo.com or call 888.205.5920.
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Maintaining revPAR
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As the economy continues to spiral downward, concerns in the hospitality industry over the effect it will have on occupancy rates are at the top of every hotel's planning list. Tradavo recognizes the need to plan effectively to address these inevitable vacancies and to examine the alternative assets you have within your property to keep Sales Per Occupied Room at a healthy level wherever possible. One of the best places to look for additional dollars look is your retail offering. Whether you have a market, pantry, or gift shop, this is an incredible opportunity to make a few adjustments to your assortment to increase revenue coming out of your retail sales. Important facts to consider:
1 - Although we will certainly see a decrease in business travel as companies reconsider their travel budgets and reign in spending, business travel cannot come to a complete stop. For those travelers who still need to travel to conduct business, you will see a decrease in their overall spending - which means travelers who used to go out to eat and spend $20+/meal on their business trips will more likely be grabbing a quick meal from the pantry to reduce per diem cost of travel. 2 - Historically, in times of economic crisis, sales of comfort foods has shown substantial increases. This current decline is no different. Stock prices for companies such as Campbells, Kraft, and Procter & Gamble are actually overtaking stock giants as purchases of comfort foods are showing striking increases. 3 - Food prices are increasing and guests understand that as they are seeing the increases in their grocery bills at home. The price of cocoa, flour, rice, and corn have seen massive double digit increases in 2008. But many retailers have not responded to these market change, so they are actually losing money in their retail operations, because they are not priced according to these staggering cost increases. How to effectively respond to these events: 1 - Increase the number and quality of your meal replacement options for your guests. Give them a reason to stay in, save money, and increase your revenue by providing them with a variety of healthy foods and comfort meals that are less than the cost of eating out. Going out to dinner for a mid-range meal and beverage now averages about $17.50. Pantries can now easily decrease their meal charges by offering quick meal options in the $5-8 range with a $2.50 beverage. That's a decrease to your guest of up to 60%. 2 - Increase your number of comfort items including chilies, soups, macaroni and cheese, pretzels, chips and salty snacks, cookies and chocolate. Be sure to stick with recognizable brands such as Kraft, Hormel, and Frito Lay as these are always the top sellers in times of crisis. These items will be incredibly popular for guests looking to stay in, reduce costs, and enjoy a tasty meal in the comfort of their room. 3 - Evaluate your pricing! Did you know chocolate manufacturers have increased their prices over 30% since January? Have you changed your pricing to absorb these additional costs? Many pantries and gift shops have not, so their margins are so low it is hardly worth using the retail space to sell the products. Many are even losing money, because the person who orders the products does not communicate the increased cost to the person who prices the products! For example, a King-Size Candy Bar with current inflation rates should sell for no less than $2.00-$2.25. Take a good look at your pricing to be sure that you have adjusted your prices to maintain an average of 60% markup across your assortment - keeping in mind that products such as water and soda will have a 200%-300% markup. To help our customers select an assortment that will increase retail sales and keep revenue numbers at your hotel to contribute to your property's bottom line, we recommend that every property offer the following products and pricing: Products: Snickers, M&M's (plain and peanut), Butterfinger, KitKat, Twix, and Reese's Peanut Butter Cups
Pricing: $2.00-$2.50 Products: Stouffers Meals, Chef Boyardee Meals, Kraft Mac and Cheese Meals, Campbell's Soup at Hands, StarKist Lunch-to-Go
Pricing $3.50 - $6.00 Products: Grab Bag/King Size Salty Snacks - Doritos, Cheetos, Pretzels, Bakes Lays, Cracker Jack's
Pricing: $2.00-$2.50 We are in the midst of some troubling economic times - for some, the most staggering of our lifetime. Your hotel pantry is a tremendous asset to your bottom line. With the right approach and the proper and immediate application of a few basic retail principles, your Market can be a great value to both you and your guests!
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Shoplifting
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Are You Experiencing Revenue Losses Due to Shoplifting?
Posted by Janine Roberts on Mon, Jul 07, 2008 @ 02:37 PM
A Few Tips to Avoid Giving Away Profits!
When running a retail operation of any kind, shoplifting is always a revenue issue that must be considered and effectively addressed. But how do you remain hospitable while trying to deter guests from walking out of your hotel pantry without paying for merchandise?
Try these useful tips for remaining polite while protecting your profits!
1. Have a price list in plain sight in front of the merchandise. Many hotels prefer not to price individual items. In this case, place a neatly typed price sheet in a frame to display on your merchandiser, so guests are clear that these are not free amenities.
2. Be aware of shoppers. Most pantries are located in the lobby and the majority are near the front desk. Be sure to maintain unobstructed views between the front desk and your retail operation. If you are under construction on considering adding a market or pantry, be sure to keep this in mind.
If someone enters the pantry, greet them by saying, "I'll be happy to check you out at the front desk whenever you are ready!" If you are not engaged with front desk activities, step into the pantry and ask if you can help them locate what they are looking for.
Door monitors that make a sound when guests enter or exit can be used if approved by your operations department. These serve as much to let the desk clerk know that there is a customer in the pantry as it does to let customers know that someone is aware they are shopping which can greatly reduce the inclination to sneak in and grab a free snack.
3. Avoid accusations or confrontations. Never speak confrontationally such as "Sir, you have to pay for those," or "Ma'am, that isn't free! If you see a guest take an item without paying for it, make eye contact and say, "Sir/Ma'am, May I ring that up for you?" or "would you like me to charge that to your room for you?"
4. Never let a customer leave without paying in order to avoid an uncomfortable situation. It is a loss of revenue - and no one can afford those! Be polite, but be assertive.
5. Market your pantry! Let guests know at check-in that the pantry sells snacks and sundries for their convenience 24 hours a day. The clearer you make it to guests that these items are for sale, the less likely they will be to come down for a "free" midnight snack.
Other suggestions on ways to deter shoplifting? Please feel free to share!
COMMENTS
Good post! It's important to note that shrink -- a major depressant of profitability -- can be attributed to guests, employees and outside contractors and sometimes from items going out of code. Paying attention to all three of these will greatly improve operations and profits.
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