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Q&A: Rebranding to better serve

BY DSN STAFF

In the past year, the Global Market Distributor Center has undertaken a major rebranding initiative that better captures GMDC’s mission and focus. Drug Store News caught up with David McConnell, GMDC president and chief executive officer, to get a refresher on GMDC’s rebranding initiative and some insight into what the association will address through 2008.

Drug Store News: Before the name change, what did GMDC stand for?

David McConnell: General Merchandise Distributor’s Council. We were founded in 1970 by a group of nonfoods divisions of wholesale grocers. They were looking for an association where they could get some traction in GM and HBC. The name was no longer relevant to who we were and what we were doing in the marketplace today because we were far beyond representing [just] the distributor channel.

DrSN: So how did you arrive at Global Market Distributor Center?

McConnell: We went through this branding process last year; we hired a group out of Denver called Brand-Savvy. Gary Naifeh, who owns the agency, had a lot of experience with consumer packaged goods. He…did the objective and the subjective research within the industry—members, board members, non-members, former members—and came back to us, [saying], ‘GMDC has some brand equity. The big confusion’s around the name, so we have to figure out how we can utilize GMDC and still reflect who and what you are today.’ That was the challenge.

As we worked through this process…our current chairman, Ken Nemeth of Value Merchandisers, developed the name based on where we were going, what core competencies we needed to focus on the most.

We are global from [a membership] standpoint. Ahold is part of our organization, and we have some Mexican, South American and Canadian members. A lot of our manufacturers are global manufacturers. Many of the small, general merchandise manufacturers source all their product globally.

We want to be more than just a couple meetings a year to our industry. We bring value-added, and all the associations are taking on that challenge today. We’re aggressively looking for change and opportunities to help the industry, primarily through collaboration between the suppliers on our board and the customers.

DrSN: So what is the new focus, or mindset, at GMDC?

McConnell: First of all, the [focus] that isn’t changing is the focus on the two annual marketing conferences we do each year—the spring meeting is a general merchandise event and the fall meeting has evolved into our health, beauty and wellness marketing conference.

[Going forward], we decided we could be more effective by changing how we approached education. We have an education leadership council—a board made up of manufacturers and wholesalers/retailers—that looks at ways we can impact and provide business and consumer insights to our members. It’s all designed to be very actionable. We have a great relationship with our retail members, and for many of these studies, we get their stores as labs. As we’re moving forward, we’re doing more studies, [featuring] timely information. Wellness is a good example. You have to stay on top of it because it’s evolving. So we’re constantly looking to get mini-studies or white papers out, up to four to six per year, to try and get as much exposure in the industry to new opportunities and ways to do business more effectively.

We’re very focused on professional development now. The industry is looking for ways to develop good people. We have created a unique alliance with two European companies. CrossKnowledge is the largest e-learning [distance learning] company in Europe, and Mercuri is a classroom-training company that’s focused on sales and marketing disciplines. We’ve signed a deal with these companies, a two-year exclusive [that includes on our site] 160 learning modules that are accessible to our members. This borders on MBA-content, and each module is available in eight languages. It’s all interactive, really cutting-edge.

From our perspective, this is just the beginning. We’re also looking on building some customized certification programs around some of our existing studies, [such as] how to do business with some of our key retail companies. We’re also looking at category management opportunities, developing online [content].

Within the context of all this, while we have an exclusivity on the CrossKnowledge/Mercuri relationship, we’re reaching out to other associations. There is a lot of duplication of effort in the industry between the various trade associations; we’re relying on a lot of the same executives. We need to find ways to partner. I’ve had some really good conversations with Steve Anderson at NACDS. He’s a really excellent leader, really sincere about wanting to collaborate, so we have some discussions going on about how we can partner together. We have some leadership and experience in education and training, professional development, and [NACDS] has interest in those areas so we can help lead that charge. Health-care, Medicare, all the issues around pharmacy, that is not our area of expertise, but we want to support what [NACDS] is doing.

I’ve had meetings with the Natural Products Association because another important initiative that we launched this year was the rebranding of our health and beauty care marketing conference to a health, beauty and wellness event. We had a half-day of wellness awareness, education and insights. We really want to carve out a niche in that area because we’ve done a lot of work there educationally already and we want to be the go-to association for the industry as we move forward. We think there are opportunities to partner with groups like NPA and NACDS.

Three keys that have started the evolutionary process beyond the rebranding for us is a focus on professional development, a focus on health and wellness and a focus on being a catalyst for creating industry collaboration between the associations. Those are three big issues for us as we [make the] transition from 2007 to 2008.

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Fred’s reports both monthly and quarterly record sales

BY Allison Cerra

MEMPHIS, Tenn. Fred’s Inc. reported record sales for the five-week and eight-month periods which ended Oct. 6, 2007.

The company said Friday that its total sales for the month increased 2 percent to $161.4 million compared to the same period last year. Total sales for the year-to-date period increased 5 percent to $1.157 billion.

Same store sales for the month rose 1 percent on top of a 5 percent increase in September last year. On a comparable store basis, sales increased 1.3 percent through the first eight months of fiscal 2007 compared with a 2.7 percent gain in the year-earlier period. Same-store sales are a key predictor of how well the company performs in stores that have been open for several years, and how well the newly open stores will do in the future.

“September sales came in at the low end of our forecasted range of a 1 percent to 3 percent increase, affected by unusually warm weather across our markets and the disruption caused by the updating of 98 stores under our refresher program,” said Fred’s Stores chief executive officer Michael J. Hayes. “We look forward to finishing our refresher program in October with the last 60 stores and to a better economic environment for our customers going forward, as the benefits of the minimum wage increase and the focus of Federal Reserve Board on the credit crunch take hold.”

Fred’s opened four stores at the end of September, bringing total store openings to 22 for the year-to-date period. These new store openings have been balanced by the company’s decision to close underperforming stores. In the remaining months, Fred’s Stores said that it plans to open 14 additional stores, with no further planned closings, which will result in a net increase in stores of 2 percent for the year.

Fred’s Inc. operates 702 discount general merchandise stores, including 24 franchised stores in the southeastern United States.

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Target to open another 61 stores nationwide

BY Allison Cerra

MINNEAPOLIS Target announced that it will be opening an additional 61 Target stores, the company said Friday.

The stores, which will all open Oct. 14, will open in 22 different states. The majority of the stores are making their debut in Arizona, California, Ohio and Texas.

In addition to offering the latest in trend-right merchandise, Target also brings a 44-year tradition of community involvement. The retail chain commits itself to local communities donating more than $3 million each week to area nonprofit organizations, becoming involved in local volunteerism efforts through Target Volunteers, and orchestrating other special projects that help meet area social service, arts and education needs.

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