Grocery Deli Company

A large supermarket chain has seen declining profits as competition has increased from low cost grocery chains (Wal-Mart etc.). This competition has driven down profits in their grocery department. They want to find ways to improve profitability in their deli department which has seen flat profits for the last several years.

• The deli department consists of two divisions: Deli Meats and Prepared Meals • If the interviewee asks for revenue information on either, provide her with Exhibit 1 • Once the candidate asks about the increase in revenue, tell her that two new products were introduced two years ago into the prepared meals division: chicken wings and prepared sandwiches • Competition: they are facing significant competition in their groceries division from Walmart,hurting overall profitability. Thus, they hope to use the deli division to improve profits

A large supermarket chain has seen declining profits as competition has increased from low cost grocery chains (Wal-Mart etc.). This competition has driven down profits in their grocery department. They want to find ways to improve profitability in their deli department which has seen flat profits for the last several years.

Given the information in Exhibit 2, the candidate should be able to calculate the following: • BBQ: $80 revenue per day, $40 COGS per day, and $40 contribution per day • Sandwiches: $80 revenue per day, $120 COGS per day, and -$40 contribution per day The more effective the candidate is at organizing information from Exhibit 2, the easier these calculations will be Segmenting revenue is the key to solving the case. Once the interview has the basic information, it is a straight forward calculation to uncover that the sandwiches are losing money. Other reasonable areas for a candidate to explore are company, customer segments, competitor information