NEW STORE PERFORMANCE ANALYSIS 2020
Scott Smith Retail Analytics
Table of Contents
• New Store Performance Updates – Exclusion Criteria – Store Sample – Performance Results
2
Exclusion Criteria
Store samples exclude: •
Stores not transmitting POS data •
Most grocery stores do not transmit POS data
• Stores with unsteady POS transmissions •
Must transmit 300 out of 365 days to be included in sample (“82.2% rule”)
• Stores which don’t fit the typical Ace Hardware format and DIY customer base • Home Centers and Lumberyards • IBR stores • Grocery SWS • Known large niche stores • Stores that had a large % of “unidentified/non - Ace SKU” sales (under 50%) • Conversions eliminated – only analyzing New Investors and Branches
3
Store Sample
Year 1 Analysis • 310 stores
• Year 1 Sales (first full 12 months) • Opened from January 2015 – January 2020 (stores who opened in 2014 were removed from the sample and stores who opened in 2019 and Jan 2020 were added) • Must have completed 12 months of sales by December 31 st 2020 Year 2 & 3 Analysis • 176 stores • Only included stores who have been open for 3 years and transmitted more than 300 POS days all 3 years • Only included stores who opened from January 2015 – January 2018 • Must have completed 36 months of sales by December 31 st 2020
4
Key Takeaways
• COVID had a significant positive impact on key metrics for stores maturing in 2020.
• Avg sales/SQFT has grown $21/SQFT for maturing stores versus the prior year. • Stronger sales among stores maturing in 2020 resulted in stores performing well beyond their proforma, averaging 123% for their first year.
• Branches continue to outperform New Investor stores in most metrics • Combining the last 5 years, Branches have a 26% sales advantage and can drive 21% more transactions in their stores versus New Investors • However, New Investor stores maturing in 2020 performed as strong as branch stores in sales/sq ft but branch stores generated, on average, 28% more transactions per day.
• The average % to proforma over the past 5 years is at 114% overall with stores who matured in 2020 at 123% • Super stores are more likely to outperform their proforma at 128% • More effective owners also outperform their proforma regardless of owner type
• Best Brands – consistent growth amongst all metrics as stores carry more best brands • Stores maturing in 2020 who carry 10-11 best brands • Average % to proforma was 129% • Avg sales/SQFT was $168
• Year 2 & Year 3 Analysis – stores see consistent growth across all key metrics each year. • We continue to see positive growth for all formats each year
5
Overall Sales Performance 2020 Analysis (stores opened from Jan 2015 – Jan 2020)
Last Year’s Analysis (stores opened from Jan 2014 – Jan 2019)
310
313 $1,240,423 57,915 9,643 $135.87 $21.34 162 43.7% 111%
Store Count
$1,337,928
Avg Year 1 Sales
58,646
Avg Trans Count
9,917
Avg Retail SQFT
$140.44
Avg Sales/SQFT
$22.50
Avg Ticket
164
Avg Trans Count/Day
43.5%
Avg GM%
114%
Avg % to Proforma
• Among the stores maturing in the past 5 years, strong performance among stores maturing in 2020 drove the increase across most key metrics.
*Sales per square foot is based off of total retail selling space
Stores opened from January 2015 – January 2020
**GM% is based off of Ace RSC stocked items only
6
Performance Trends
Avg Trans Count Trend Each Year Represents 5 Yr Avg
Avg Sales/Sq Ft Trend Each Year Represents 5 Yr Avg
52,000 54,000 56,000 58,000 60,000 62,000 64,000 66,000 68,000
$105.00 $110.00 $115.00 $120.00 $125.00 $130.00 $135.00 $140.00 $145.00
$140.44
66,799
$134.16 $134.58 $134.25 $135.87
63,513 62,807
$130.32
61,114
$124.66
59,158
58,020 57,915 58,646
$119.31
2013 Analysis
2014 Analysis
2015 Analysis
2016 Analysis
2017 Analysis
2018 Analysis
2019 Analysis
2020 Analysis
2013 Analysis
2014 Analysis
2015 Analysis
2016 Analysis
2017 Analysis
2018 Analysis
2019 Analysis
2020 Analysis
Avg Ticket Trend Each Year Represents 5 Yr Avg
Avg Store Size Trend Each Year Represents 5 Yr Avg
$10.00 $15.00 $20.00 $25.00 $30.00
10,500
$22.50
9,917
$20.73 $21.54 $21.34
10,028
$18.69 $19.26
10,000
9,643
$17.62 $18.06
9,527
9,354
9,334
9,500
9,200
9,028
9,000
$0.00 $5.00
8,500
2013 Analysis
2014 Analysis
2015 Analysis
2016 Analysis
2017 Analysis
2018 Analysis
2019 Analysis
2020 Analysis
2013 Analysis
2014 Analysis
2015 Analysis
2016 Analysis
2017 Analysis
2018 Analysis
2019 Analysis
2020 Analysis
• The average sales/sq ft growth trend from 2013 – 2016 coincided with declining average store size and leveled off as store size started to increase in the 2017 analysis. • The addition of 2020 maturing stores proved to be an anomaly as average store size increased as well as sales/sq ft.
7
*Sales per square foot is based off of total retail selling space
By Year
Avg Trans Count/ Day
12 months Completed in
Avg Retail Hardware SQFT
Avg Trans Count
Avg Sales/ SQFT
Avg % to Proforma
Median % to Proforma
Avg GM% (based on Ace Valid SKUS)
Store Count
Avg Ticket
Avg Year 1 Sales
2 ^
2015
$1,798,009 10,000 91,566 $241.86 $19.59 253
46%
151% 151%
2016
55 $1,195,357 9,053 56,196 $139.42 $20.93 158
44%
111% 102%
2017
78 $1,290,054 10,540 58,324 $131.30 $21.68 163
44%
110% 102%
2018
61 $1,212,471 9,588 57,329 $134.44 $21.50 160
44%
115% 110%
2019
54 $1,275,725 9,650 55,197 $137.30 $22.98 156
43%
108% 100%
2020
60 $1,699,051 10,473 64,657 $158.80 $25.70 180
42%
123% 110%
Grand Total 310 $1,337,928 9,917 58,646 $140.44 $22.50 164
44% 114% 104%
• Avg Sales/SQFT for 2020 increased significantly (+$21) due to increased demand from the pandemic.
• On average, Year 1 sales among stores maturing in 2020 increased 33% versus prior year as both average transaction count increased 17% and average ticket increased 14%.
*Sales per square foot is based off of total retail selling space
Stores opened from January 2015 – January 2020
**GM% is based off of Ace RSC stocked items only ^ 2 stores in 2015 represent two stores in sample that opened in January 2015 and completed 12 months of sales in December 2015
8
By Format
Avg Retail Hardware SQFT
Avg Trans Count
Avg Sales/ SQFT
Avg Trans Count/ Day
Avg % to Proforma
Avg GM% (based on Ace Valid SKUS)
Store Count
Avg Year 1 Sales
Avg Ticket
Format
Convenience
41 $839,522 5,017 43,866 $173.37 $18.83 122
46%
94%
Core
209 $1,229,568 9,222 55,231 $136.43 $22.46 155
43% 113%
Super
60 $2,055,960 15,687 80,643 $131.90 $25.16 224
43% 128%
Grand Total
310 $1,337,928 9,917 58,646 $140.44 $22.50 164
44% 114%
• Smaller stores continue to be the most productive.
• Super stores are more likely to outperform their proforma at 128% while generating higher average ticket and daily transaction counts versus other formats.
*Sales per square foot is based off of total retail selling space
Stores opened from January 2015 – January 2020
**GM% is based off of Ace RSC stocked items only
9
By Format
Stores matured in 2020:
Avg Retail Hardware SQFT
Avg Trans Count
Avg Sales/ SQFT
Avg Trans Count/ Day
Avg % to Proforma
Avg GM% (based on Ace Valid SKUS)
Store Count
Avg Year 1 Sales
Avg Ticket
Format
Convenience
4 $882,754 4,675 43,485 $184.63 $19.58 120
43.8% 119%
Core
42 $1,345,671 9,088 52,465 $149.80 $25.79 147
42.2% 118%
Super
14 $2,992,419 16,283 107,280 $178.42 $27.16 296
42.2% 139%
Grand Total
60 $1,699,051 10,473 64,657 $158.80 $25.70 180
42.3% 123%
• Among stores maturing in 2020, Super stores performed closer to convenience stores due to stronger average daily number of transactions.
*Sales per square foot is based off of total retail selling space
Stores opened from January 2015 – January 2020
**GM% is based off of Ace RSC stocked items only
10
By Investor Type
Avg Retail Hardware SQFT
Avg Trans Count
Avg Sales/ SQFT
Avg Trans Count/ Day
Avg % to Proforma
Avg GM% (based on Ace Valid SKUS)
Investor Type
Store Count
Avg Year 1 Sales
Avg Ticket
Branch
210 $1,432,615 10,369 62,078 $144.18 $22.63 174
43.8% 116%
New Investor 100 $1,139,086 8,970 51,438 $132.58 $22.25 144
42.8% 109%
Grand Total
310 $1,337,928 9,917 58,646 $140.44 $22.50 164
44% 114%
Branch Advantage
26%
21% 9%
21% 100 bps
7 ppts
• Branches continue to outperform New Investor stores in most metrics • Branch stores are more productive despite their larger size • Branches have a 26% sales advantage and can drive 21% more transactions in their stores versus New Investors
*Sales per square foot is based off of total retail selling space
Stores opened from January 2015 – January 2020
**GM% is based off of Ace RSC stocked items only
11
By Investor Type
Stores matured in 2020:
Avg Retail Hardware SQFT
Avg Trans Count
Avg Sales/ SQFT
Avg Trans Count/ Day
Avg % to Proforma
Avg GM% (based on Ace Valid SKUS)
Investor Type
Store Count
Avg Year 1 Sales
Avg Ticket
40 $1,823,714 10,946 69,670 $158.93 $25.20 194
42.6% 123%
Branch
20 $1,449,725 9,526 54,630 $158.56 $26.69 152
41.7% 123%
New Investor
Grand Total
60 $1,699,051 10,473 64,657 $158.80 $25.70 180
42.3% 123%
Branch Advantage
26%
28% 0.2%
28% 90 bps
0 ppts
• Branch stores matured in 2020 continue to outperform New Investor stores • Branch stores outperform New Investor stores by a slim margin in terms of sales/sq ft, but benefit the most from generating a higher average daily transaction count.
• New Investor stores maturing in 2020 had a stronger average ticket versus branch stores.
*Sales per square foot is based off of total retail selling space **GM% is based off of Ace RSC stocked items only
12
By Operator Type
Avg Retail
Avg Trans Count
Avg Sales/ SQFT
Avg Trans Count/ Day
Avg % to Proforma
Avg GM% (based on Ace Valid SKUS)
Store Count
Avg Year 1 Sales
Hardwa re SQFT
Avg Ticket
Operator Type
BRANCH
210 $1,432,615 10,369 62,078 $144.18 $22.63 174 43.8% 116%
An owner/operator 50 $1,440,299 9,908 61,156 $155.99 $23.51 173 43.4% 121% Involved - operated by Mgr 137 $1,452,518 10,694 62,670 $139.91 $22.64 175 43.7% 115% An absentee owner 21 $1,333,295 9,507 61,704 $148.23 $20.87 170 45.2% 112% NEW INVESTOR 100 $1,139,086 8,970 51,438 $132.58 $22.25 144 42.8% 109% An owner/operator 60 $1,132,391 9,295 51,127 $126.92 $22.51 143 42.9% 105% Involved - operated by Mgr 29 $1,228,605 8,775 55,185 $145.28 $21.99 155 42.1% 123% An absentee owner 11 $939,598 7,713 43,260 $129.94 $21.47 119 43.9% 91%
• There isn’t a correlation between owner involvement and key metrics for branch or new investor stores.
*Sales per square foot is based off of total retail selling space
Stores opened from January 2015 – January 2020
**GM% is based off of Ace RSC stocked items only ***Includes only stores that had this question answered on new store survey
13
By Owner Rating
Avg Retail Hardware SQFT
Avg Trans Count
Avg Sales/ SQFT
Avg Trans Count/ Day
Avg % to Proforma
Avg GM% (based on Ace Valid SKUS)
Store Count
Avg Year 1 Sales
Avg Ticket
Owner Rating
BRANCH
210 $1,432,615 10,369 62,078 $144.18 $22.63 174 43.8% 116% 3 $1,179,694 9,900 47,582 $116.66 $24.05 132 41.5% 113% 21 $1,351,707 10,895 58,459 $129.17 $22.61 163 44.0% 104% 105 $1,430,576 10,452 62,063 $140.64 $22.57 173 44.0% 116% 78 $1,478,109 10,080 64,094 $155.91 $22.68 181 43.6% 121% 100 $1,139,086 8,970 51,438 $132.58 $22.25 144 42.8% 109% 7 $955,695 10,207 47,231 $95.78 $19.91 134 43.4% 72% 14 $963,134 8,599 44,662 $126.36 $21.58 124 43.3% 98% 42 $1,084,803 8,634 51,065 $132.29 $21.52 142 43.1% 105% 37 $1,301,975 9,258 55,222 $142.21 $23.76 155 42.1% 124%
1 - 1.9 (ineffective)
2 - 2.9 (not very effective)
3 - 3.9 (effective) 4+ (very effective) NEW INVESTOR 1 - 1.9 (ineffective)
2 - 2.9 (not very effective)
3 - 3.9 (effective) 4+ (very effective)
• However, there is a positive correlation between more effective owners and performance metrics for both new investor and branch stores. • Particularly for new investors, more effective owners are more likely to meet or exceed proforma. • Owner rating is based on an average of scores from 9 different categories ranked 1-5 by DMs (entrepreneurship, leadership, salesmanship, accounting acumen, customer service, operational efficiency, delegation, time management, people development) – therefore, the specific nature of this score is a better success indicator than operator type which is more broad.
*Sales per square foot is based off of total retail selling space
Stores opened from January 2015 – January 2020
**GM% is based off of Ace RSC stocked items only ***Includes only stores that had this question answered on new store survey
14
By Owner Rating
Stores matured in 2020:
Avg Retail Hardware SQFT
Avg Trans Count
Avg Sales/ SQFT
Avg Trans Count/ Day
Avg % to Proforma
Avg GM% (based on Ace Valid SKUS)
Store Count
Avg Year 1 Sales
Avg Ticket
Owner Rating
BRANCH
40 $1,823,714 10,946 69,670 $158.93 $25.20 194 42.6% 123%
N/A
1 - 1.9 (ineffective)
7 $1,672,518 12,973 66,367 $126.10 $24.63 184 43.0% 104% 19 $1,626,301 9,856 64,965 $165.25 $24.56 180 43.5% 125% 14 $2,167,230 11,412 77,708 $166.75 $26.34 219 41.3% 130% 20 $1,449,725 9,526 54,630 $158.56 $26.69 152 41.7% 123% 2 $1,382,597 15,250 57,166 $89.52 $23.45 158 40.8% 76% 1 $1,268,245 7,000 52,253 $181.18 $24.27 144 45.1% 123% 8 $1,243,579 8,781 51,972 $155.06 $24.50 144 41.9% 115% 9 $1,668,047 9,196 56,694 $174.50 $29.64 158 41.4% 141%
2 - 2.9 (not very effective)
3 - 3.9 (effective) 4+ (very effective) NEW INVESTOR 1 - 1.9 (ineffective)
2 - 2.9 (not very effective)
3 - 3.9 (effective) 4+ (very effective)
• There is a similar positive correlation between more effective owners and performance metrics for both new investor and branch stores maturing in 2020.
*Sales per square foot is based off of total retail selling space
Stores opened from January 2015 – January 2020
**GM% is based off of Ace RSC stocked items only ***Includes only stores that had this question answered on new store survey
15
By Size
Avg Retail Hardware SQFT
Avg Trans Count
Avg Sales/ SQFT
Avg Trans Count/ Day
Avg % to Proforma
Avg GM% (based on Ace Valid SKUS)
Square Footage
Store Count
Avg Year 1 Sales
Avg Ticket
<4,000
6
$928,119 3,459 51,454 $262.28 $17.84 143
48.5% 96%
4,000-4,999
9
$923,887 4,544 47,500 $203.02 $19.05 132
46.2% 113%
5,000-5,999
22
$757,246 5,447 40,957 $139.26 $18.41 114
45.3% 88%
6,000-6,999
22 $1,125,224 6,378 54,730 $173.78 $20.87 154
45.1% 118%
7,000-7,999
32 $1,053,463 7,353 50,174 $143.75 $21.91 140
44.0% 105%
8,000-9,999
72 $1,201,869 8,745 54,846 $138.09 $21.94 154
42.9% 116%
10K-11,999
69 $1,326,394 10,491 57,238 $127.69 $23.50 161
42.8% 111%
12K-14,999
52 $1,705,844 12,686 69,955 $133.50 $23.86 194
42.9% 127%
15K+
26 $2,268,818 19,388 84,513 $113.60 $26.52 235 310 $1,337,928 9,917 58,646 $140.44 $22.50 164
42.1% 123% 44% 114%
Grand Total
• Smaller stores continue to see significantly higher sales/SQFT and avg gross margin
*Sales per square foot is based off of total retail selling space
Stores opened from January 2015 – January 2020
**GM% is based off of Ace RSC stocked items only
16
By Density Class
Avg Retail Hardware SQFT
Avg Trans Count
Avg Sales/ SQFT
Avg Trans Count/ Day
Avg % to Proforma
Avg GM% (based on Ace Valid SKUs)
Store Count
Avg Year 1 Sales
Avg Ticket
Density Class
Rural
51 $1,403,169 8,976 55,940 $158.82 $24.53 157
43.3% 131%
Suburban
157 $1,407,605 10,626 62,908 $135.39 $21.73 175
43.4% 111%
Suburban Fringe
83 $1,172,904 9,812 51,439 $123.93 $23.13 145
42.6% 112%
Urban
15 $1,233,822 7,569 59,244 $177.23 $20.39 166
48.1% 92%
Hyper-Urban
4 $1,585,937 5,100 73,173 $309.07 $22.08 202
51.2% 97%
Grand Total
310 $1,337,928 9,917 58,646 $140.44 $22.50 164
44% 114%
• While Suburban is the most common location for our new stores, Urban and Hyper-Urban stores perform better across the majority of metrics (note: urban and hyper-urban sample size is much smaller)
• Urban and Hyper-Urban stores are a smaller store footprint on average, which typically generate higher sales/sq ft.
*Sales per square foot is based off of total retail selling space
Stores opened from January 2015 – January 2020
**GM% is based off of Ace RSC stocked items only
17
By Density Class
Stores matured in 2020:
Avg Retail Hardware SQFT
Avg Trans Count
Avg Sales/ SQFT
Avg Trans Count/ Day
Avg % to Proforma
Avg GM% (based on Ace Valid SKUs)
Store Count
Avg Year 1 Sales
Avg Ticket
Density Class
Rural
12 $1,637,041 10,742 55,686 $152.04 $28.47 155
42.3% 126%
Suburban
34 $1,952,685 10,878 76,699 $175.25 $24.35 213
42.4% 128%
Suburban Fringe
14 $1,136,234 9,258 43,099 $124.65 $26.59 121
42.2% 109%
Grand Total
60 $1,699,051 10,473 64,657 $158.80 $25.70 180
42.3% 123%
• Among stores maturing in 2020, Suburban locations had the strongest sales/sq ft driven by strong annual transactions despite having the lowest average ticket.
*Sales per square foot is based off of total retail selling space
Stores opened from January 2015 – January 2020
**GM% is based off of Ace RSC stocked items only
18
By Competition Level
Avg Retail Hardware SQFT
Avg Trans Count
Avg Sales/ SQFT
Avg Trans Count/ Day
Avg % to Proforma
Avg GM% (based on Ace Valid SKUs)
Store Count
Avg Year 1 Sales
Avg Ticket
Comp Level
High Comp
91 $1,417,190 10,093 61,162 $138.92 $22.30 171
43.2% 106%
Low Comp
219 $1,304,993 9,844 57,601 $141.07 $22.59 161
43.6% 117%
Grand Total
310 $1,337,928 9,917 58,646 $140.44 $22.50 164
44% 114%
• Stores with Low Comp slightly outperform those with High Comp in terms of Sales/SQFT and % to Proforma
• High Comp means the Ace store has 1 Big Box store within a 3-mile radius or 2 Big Boxes with a 5-mile radius • Low Comp means any other stores than those in the High Comp category
*Sales per square foot is based off of total retail selling space
Stores opened from January 2014 – January 2019
**GM% is based off of Ace RSC stocked items only
19
By Competition Level
Stores matured in 2020:
Avg Retail Hardware SQFT
Avg Trans Count
Avg Sales/ SQFT
Avg Trans Count/ Day
Avg % to Proforma
Avg GM% (based on Ace Valid SKUs)
Store Count
Avg Year 1 Sales
Avg Ticket
Comp Level
High Comp
32 $1,787,879 11,145 70,100 $157.05 $24.66 195
42.1% 119%
Low Comp
28 $1,597,533 9,705 58,436 $160.81 $26.87 163
42.6% 128%
Grand Total
60 $1,699,051 10,473 64,657 $158.80 $25.70 180
42.3% 123%
• Although performance is stronger among stores maturing in 2020, low comp stores slightly outperform high comp stores.
• High Comp means the Ace store has 1 Big Box store within a 3-mile radius or 2 Big Boxes with a 5-mile radius • Low Comp means any other stores than those in the High Comp category
*Sales per square foot is based off of total retail selling space
Stores opened from January 2014 – January 2019
**GM% is based off of Ace RSC stocked items only
20
By Transaction Count
Inactive Store Count
Avg Retail Hardware SQFT
Avg Trans Count
Avg Sales/ SQFT
Avg Trans Count/ Day
Avg % to Proforma
Avg GM% (based on Ace Valid SKUS)
Transaction Count / Day
Store Count
Avg Year 1 Sales
Avg Ticket
3
<= 100
49
$636,441
7,702 29,179 $88.31 $21.81
82
43.4%
73%
0
101-125
59
$918,926
9,090 40,532 $108.81 $22.66
114
42.7%
92%
0
126-150
56
$1,069,182
9,655 48,323 $120.41 $22.09
137
43.5%
105%
1
151-175
39
$1,326,955
10,524 57,851 $138.70 $22.97
163
42.3%
117%
0
176-200
34
$1,480,511
10,703 67,314 $148.40 $21.96
187
43.7%
127%
0
201-225
25
$1,661,931
10,512 76,661 $171.04 $21.74
214
44.6%
136%
0
226-250
17
$2,025,472
10,124 85,589 $224.19 $23.81
240
44.3%
156%
0
>250
31
$2,948,754
13,248 120,537 $242.08 $23.96
334
44.7%
176%
Grand Total
310
4
$1,337,928
9,917 58,646 $140.44 $22.50
164
44%
114%
• A rule of thumb being used in the field is at least 150 transactions per day are required to maintain a successful business during a store’s first year • As the data indicates above, stores who have an average of less than 150 transactions per day tend to do worse in most metrics • As transaction count increases, attrition decreases
*Sales per square foot is based off of total retail selling space
Stores opened from January 2015 – January 2020
**GM% is based off of Ace RSC stocked items only
21
By Price Level
Avg Retail Hardware SQFT
Avg Trans Count
Avg Sales/ SQFT
Avg Trans Count/ Day
Avg % to Proforma
Avg GM% (based on Ace Valid SKUS)
Pricing Format
Store Count
Avg Year 1 Sales
Avg Ticket
Ace Retail
95 $1,223,838 9,872 56,662 $133.92 $21.67 159
41.3% 114%
Level 1
167 $1,365,109 10,239 58,775 $135.97 $22.82 165
43.8% 114%
Level 2
44 $1,516,047 8,730 64,509 $176.73 $23.00 179
47.0% 112%
Grand Total
310 $1,337,928 9,917 58,646 $140.44 $22.50 164
44% 114%
• As pricing level increases, stores are able to obtain a higher level on most key metrics.
• Stores at Level 2 pricing are smaller stores on average, which typically generate higher average sales/sq ft.
*Sales per square foot is based off of total retail selling space *GM% is based off of Ace RSC stocked items only *Price Level was determined from Ace-housed data obtained at store activation. Pricing level for stores with differing pricing levels by department is based on the pricing level most prominent among the departments.
22
By Price Level
Stores matured in 2020
Avg Retail Hardware SQFT
Avg Trans Count
Avg Sales/ SQFT
Avg Trans Count/ Day
Avg % to Proforma
Avg GM% (based on Ace Valid SKUS)
Pricing Format
Store Count
Avg Year 1 Sales
Avg Ticket
Ace Retail
21 $1,333,070 9,929 55,560 $142.74 $24.07 154
40.2% 112%
Level 1
29 $1,814,097 10,737 63,681 $157.17 $27.27 178
42.8% 130%
Level 2
10 $2,133,980 10,849 86,591 $197.29 $24.55 240
45.5% 126%
Grand Total
60 $1,699,051 10,473 64,657 $158.80 $25.70 180
42.3% 123%
• The trend remains the same for stores maturing in 2020.
• While fewer stores (10) are at Level 2 pricing, these stores achieve the highest avg sales/sq ft, avg daily transaction counts and GM% versus stores at Level 1 or Ace Retail.
*Sales per square foot is based off of total retail selling space *GM% is based off of Ace RSC stocked items only *Price Level was determined from Ace-housed data obtained at store activation. Pricing level for stores with differing pricing levels by department is based on the pricing level most prominent among the departments.
23
Competitive Level by Price Level
Avg Retail Hardware SQFT
Avg Trans Count
Avg Sales/ SQFT
Avg Trans Count/ Day
Avg % to Proforma
Avg GM% (based on Ace Valid SKUS)
Pricing Format
Store Count
Avg Year 1 Sales
Avg Ticket
Ace Retail
26 $1,152,461 9,367 53,978 $129.53 $21.67 151
40.3% 102%
High Comp
Level 1
48 $1,591,240 10,942 64,712 $140.27 $23.52 181
43.5% 115%
Level 2
16 $1,392,073 9,046 64,688 $154.48 $20.02 181
46.8% 92%
Ace Retail
69 $1,250,733 10,062 57,673 $135.58 $21.67 162
41.7% 118%
Low Comp
Level 1
119 $1,273,896 9,955 56,380 $134.23 $22.54 158
43.9% 114%
Level 2
28 $1,586,890 8,549 64,407 $189.44 $24.70 178
47.0% 124%
Grand Total 310 $1,337,928 9,917 58,646 $140.44 $22.50 164
44% 114%
• High comp stores at Level 2 pricing has a lower average ticket than Level 1 or Ace Retail.
• As expected, gross margin increases as pricing levels increase.
*Sales per square foot is based off of total retail selling space *GM% is based off of Ace RSC stocked items only *Price Level was determined from Ace-housed data obtained at store activation. Pricing level for stores with differing pricing levels by department is based on the pricing level most prominent among the departments. High Comp means the Ace store has 1 Big Box store within a 3-mile radius or 2 Big Boxes with a 5-mile radius Low Comp means any other stores than those in the High Comp category
24
Competitive Level by Price Level
Stores matured in 2020
Avg Retail Hardware SQFT
Avg Trans Count
Avg Sales/ SQFT
Avg Trans Count/ Day
Avg % to Proforma
Avg GM% (based on Ace Valid SKUS)
Pricing Format
Store Count
Avg Year 1 Sales
Avg Ticket
Ace Retail
12 $1,252,506 10,391 55,365 $131.63 $22.75 153
39.8% 104%
High Comp
Level 1
14 $2,129,491 11,733 74,064 $163.99 $27.70 207
42.1% 137%
Level 2
6 $2,061,530 11,279 90,321 $191.72 $21.39 250
46.6% 106%
Ace Retail
9 $1,440,488 9,313 55,819 $157.55 $25.82 155
40.7% 123%
Low Comp
Level 1
15 $1,519,728 9,807 53,990 $150.80 $26.86 151
43.4% 123%
Level 2
4 $2,242,656 10,205 80,995 $205.64 $29.29 226
43.9% 156%
Grand Total 60 $1,699,051 10,473 64,657 $158.80 $25.70 180
42.3% 123%
• Among stores maturing in 2020, stores at Level 2 pricing also have a lower average ticket than stores at Level 1 or Ace Retail pricing level.
25 • However, stores both in low comp and high comp markets at Level 2 pricing generate higher average daily transactions than stores at other pricing levels. *Sales per square foot is based off of total retail selling space *GM% is based off of Ace RSC stocked items only *Price Level was determined from Ace-housed data obtained at store activation. Pricing level for stores with differing pricing levels by department is based on the pricing level most prominent among the departments. High Comp means the Ace store has 1 Big Box store within a 3-mile radius or 2 Big Boxes with a 5-mile radius Low Comp means any other stores than those in the High Comp category
Investor Type By Price Level
Stores matured in 2020
Avg Retail Hardware SQFT
Avg Trans Count
Avg Sales/ SQFT
Avg Trans Count/ Day
Avg % to Proforma
Median % to Proforma
Avg GM% (based on Ace Valid SKUS)
Pricing Format
Store Count
Avg Year 1 Sales
Avg Ticket
Branch 40 $1,823,714 10,946 69,670 $158.93 $25.20 194
42.6% 123% 111%
Ace Retail
15 $1,254,976 9,689 51,349 $132.73 $24.46 142
40.0% 107% 100%
Level 1
15 $2,185,609 12,268 76,711 $159.55 $26.36 216
43.2% 138% 128%
Level 2
10 $2,133,980 10,849 86,591 $197.29 $24.55 240
45.5% 126% 98%
New Investor
20 $1,449,725 9,526 54,630 $158.56 $26.69 152
41.7% 123% 106%
Ace Retail
6 $1,528,304 10,527 66,087 $167.75 $23.08 183
40.5% 126% 119%
Level 1
14 $1,416,048 9,096 49,720 $154.62 $28.24 138
42.3% 122% 104%
• Stores at Level 2 pricing among those maturing in 2020 are all branches. • While New Investors on Level 1 pricing generated a higher average ticket, stores at Ace Retail generated a higher average sales/sq ft and average daily transaction count. *Sales per square foot is based off of total retail selling space *GM% is based off of Ace RSC stocked items only *Price Level was determined from Ace-housed data obtained at store activation. Pricing level for stores with differing pricing levels by department is based on the pricing level most prominent among the departments.
26
By Best Brands @ Year 1
Stores matured in 2020:
Avg Retail Hardware SQFT
Avg Trans Count
Avg Sales/ SQFT Avg Ticket
Best Brand Participation
Store Count
Avg Year 1 Sales
Avg Trans Count/ Day
Avg % to Proforma
Avg GM% (based on Ace Valid SKUS)
10-11 best brands 52 $1,825,511 10,709 67,993 $167.80 $26.26
189
42.0%
129%
8-9 best brands
8 $877,061
8,939
42,969 $100.32 $22.00
120
44.0%
84%
Grand Total
60 $1,699,051 10,473 64,657 $158.80 $25.70 180
42.3% 123%
• Consistent growth amongst most metrics as stores carry more best brands
• 11 Best Brands include Stihl, EGO, Milwaukee, Toro, Yeti, Scotts, Benjamin Moore, Craftsman, Big Green Egg, Traeger and Weber.
*Sales per square foot is based off of total retail selling space *GM% is based off of Ace RSC stocked items only
27
First 3 Years Overall Performance
Year 1
Year 2
Year 3
Avg Sales
$1,257,722 $1,454,235 $1,631,525
Avg Trans Count
58,155
64,253
69,178
Avg Sales/SQFT
$135.44
$159.01
$178.16
Avg Ticket
$21.41
$22.46
$23.41
Sales Growth
n/a
16%
12%
• Sales per square foot increases at a rapid rate • On average, all other metrics achieve growth in a store’s first 3 years • 176 stores included in sample
*Sales per square foot is based off of total retail selling space
Stores opened from January 2015 – January 2018 (176 stores)
28
Year 2 By Format
Year 2 Average Performance
Year 2 vs Year 1 Avg Growth
Store Count
Trans Count
Sales/ SQFT
Avg Ticket
Trans Count
Avg Trans
Format
Sales
Sales
Convenience
31
$997,858 51,228 $209.86 $19.32 19.2% 13.2% 4.4%
Core
107 $1,371,768 62,110 $151.83 $22.12 17.8% 11.5% 5.1%
Super
38 $2,058,751 80,912 $137.76 $26.00 10.4% 7.0% 4.8%
176
Grand Total
$1,454,235 64,253 $159.01
$22.46
15.6% 10.5% 4.9%
• In year 2, productivity rises significantly for all formats • Similar trend to year 1 – Super stores achieve the highest sales, transaction count and average transaction – Convenience stores are the most productive in terms of Sales/SQFT
*Sales per square foot is based off of total retail selling space
Stores opened from January 2015 – January 2018 (176 stores)
29
Year 3 By Format
Year 3 Average Performance
Year 3 vs Year 2 Avg Growth
Store Count
Trans Count
Sales/ SQFT
Avg Ticket
Trans Count
Avg Ticket
Format
Sales
Sales
Convenience
31 $1,124,490 54,935 $236.63 $20.20 12.7% 7.2% 4.5%
Core
107 $1,541,410 66,993 $169.62 $23.06 12.4% 7.9% 4.3%
Super
38 $2,298,903 86,953 $154.48 $27.01 11.7% 7.5% 3.9%
176
Grand Total
$1,631,525 69,178 $178.16 $23.41 12.2% 7.7% 4.2%
• All formats continue to see productivity increases from year 2 to year 3 – All formats experience an increase in both average ticket and transaction count versus year 2. • By the end of year 3, convenience format stores continue to be the most productive over other formats in terms of Sales/SQFT
*Sales per square foot is based off of total retail selling space
Stores opened from January 2015 – January 2018 (176 stores)
30
Year 2 By Density
Year 2 Average Performance
Year 2 vs Year 1 Avg Growth
Store Count
Trans Count
Sales/ SQFT
Avg Ticket
Trans Count
Avg Ticket
Density Class
Sales
Sales
Hyper-Urban
3 $1,705,914 89,754 $360.04 $19.19 22.7% 19.5% 2.7%
Urban
13 $1,595,738 71,742 $234.90 $21.69 37.1% 24.0% 6.6%
Suburban
89 $1,453,186 66,219 $143.42 $21.73 13.4% 9.7% 3.9%
Suburban Fringe
45 $1,324,838 57,375 $139.28 $23.04 14.6% 8.7% 5.5%
Rural
26 $1,581,991 62,740 $185.40 $24.75 14.3% 8.1% 6.5%
176
Grand Total
$1,454,235 64,253 $159.01
$22.46
15.6% 10.5% 4.9%
• Hyper-Urban (only 3 stores) and Urban stores continue to be the most productive and achieve the largest growth in sales & transaction count compared to stores in other locations • These strong sales growth percentages by density remain relatively consistent to previous years analyses
*Sales per square foot is based off of total retail selling space
Stores opened from January 2015 – January 2018 (176 stores)
31
Year 3 By Density
Year 3 Average Performance
Year 3 vs Year 2 Avg Growth
Store Count
Trans Count
Sales/ SQFT
Avg Ticket
Trans Count
Avg Ticket
Density Class
Sales
Sales
Hyper-Urban
3 $1,968,399 99,743 $416.71 $19.94 15.4% 11.1% 3.9%
Urban
13 $1,656,862 76,771 $248.46 $21.50 3.8% 7.0% -0.9%
Suburban
89 $1,659,544 71,657 $163.43 $22.80 14.2% 8.2% 4.9%
Suburban Fringe
45 $1,480,833 61,686 $156.79 $24.00 11.8% 7.5% 4.2%
Rural
26 $1,744,888 66,338 $202.87 $25.84 10.3% 5.7% 4.4%
176
Grand Total
$1,631,525 69,178 $178.16 $23.41 12.2% 7.7% 4.2%
• In year 3, Hyper-Urban and Urban stores continue to outperform all other density classes in most metrics. • While Urban stores have the strongest growth in Year 2, these stores have the slowest growth in Year 3.
*Sales per square foot is based off of total retail selling space
Stores opened from January 2015 – January 2018 (176 stores)
32
Year 2 By Investor Type
Year 2 Average Performance
Year 2 vs Year 1 Avg Growth
Store Count
Trans Count
Sales/ SQFT
Avg Ticket
Trans Count
Avg Ticket
Investor Type
Sales
Sales
Branch
119 $1,533,219 67,032 $161.99 $22.78 12.6% 8.5% 4.6%
New Investor
57 $1,289,338 58,450 $152.80 $21.80 24.0% 15.6% 5.6%
176 $1,454,235 64,253 $159.01
Grand Total
$22.46
15.6% 10.5% 4.9%
• In year 2, Branch store are more productive the New Investor stores, however, New Investor store growth metrics were higher.
*Sales per square foot is based off of total retail selling space
Stores opened from January 2015 – January 2018 (176 stores)
33
Year 3 By Investor Type
Year 3 Average Performance
Year 3 vs Year 2 Avg Growth
Store Count
Trans Count
Sales/ SQFT
Avg Ticket
Trans Count
Avg Ticket
Investor Type
Sales
Sales
Branch
119 $1,734,431 72,289 $183.44 $23.86 13.1% 7.8% 4.7%
New Investor
57 $1,416,685 62,685 $167.12 $22.49 9.9% 7.2% 3.2%
176 $1,631,525 69,178 $178.16 $23.41 12.2% 7.7% 4.2%
Grand Total
• In year 3, Branch store growth exceeds New Investor growth across all metrics
*Sales per square foot is based off of total retail selling space
Stores opened from January 2015 – January 2018 (176 stores)
34
Sales to Proforma Trend
% of Stores performing 90% of Proforma or greater (First year sales to date at end of quarter)
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
=>90% Sales to Proforma
Goal - 65%
• This chart represents the amount of stores that are performing at 90% or greater of Proforma during any given quarter • The increase in sales from the pandemic drove the percent of stores performing at 90%+ of proforma to record levels.
* Percentages are based on counts of stores achieving 90%+ vs total stores currently in year 1 for each quarter
35
Sales to Proforma Trend
% of Stores performing below 90% of Proforma (First year sales to date at end of quarter)
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016 Q3 2016 Q1 2017 Q3 2017 Q1 2018 Q3 2018 Q1 2019 Q3 2019 Q1 2020 Q3 2020 Q1 2021
<90% Sales to Proforma
Goal - 25%
• This chart represents the amount of stores that are performing below 90% of Proforma during any given quarter • The percent of stores performing below 90% of proforma plummeted at the start of the pandemic.
* Percentages based on counts of stores below 90% vs total stores currently in year 1 for each quarter
36
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