IMPROVED METHODS OF RECEIVING AT RETAIL STORES by M. Zuiebackaer Lucky Stores Buena Park, California ten stores in the San Diego area. Nelson Discusses Lucky Stores utilization offers a complete selection of both foreign of pallets in delivering merchan- and domestic auto parts and accessories. dise to stores, Kragen Auto Supplies is located in northern California with 11 retail outlets, It is certainly an honor and privilege located in Salinas and San Jose. for me tohave been invited here this after- noon to speak before such a distinguished Dorman’s Tire Stores consists of 14 audience and to have been included with such outlets in the San Diego area. Dorman’s also an imposing group of speakers. has one of the largest tire retreading plants in southern California. Before touching upon the main topic of improved methods of receiving at retail L & G Sporting Goods is the beginning stores, I would like to give you a brief ofa chain of specialty sporting goods stores view of the company I represent, Lucky and it presently consists of four stores in Stores . Orange County. We are presently the seventh largest Our pharmaceutical division operates supermarket chain in volume in the United May’s Drugstores in themid-West and Cal-Pharm States. Our area of operation spreads from operates the pharmacies in our discount California in the West, to Maryland in the centers and in our Gemco and Memco membership East. department stores. This amountsto over 100 units . Lucky is a consumer oriented, diversi- fied retailing company composed of a number Our apparel division operates out of of operating divisions, operating under a our 121,000 square foot soft goods distri- variety of names. We would much prefer to bution center in Pico Rivera. It is com- operate under one name, but unfortunately, pletely automated and supplies 179 outlets. life is not that simple, It processes some 2% million hanging gar- ments plus 10~ million flat garments an- Our fabric division, a most recent nual Iy. From this point on, we will be acquisition, is located in 17 states, mostly describing stores which are more closely in the southeastern part of the United States. associated with the supermarket field. Al 1 Hancock’s 82 stores are about 15,000 square of these units are serviced by our Buena feet in size and are serviced directly from Park warehouse. their headquarters in Tupelo, Mississippi. Gemco is our membership department We are also involved in the automotive store and there are similar units on the business, owning such companies as Auto East Coast operated under the name of Memco. Parts West, with three warehouses, distrib- We have eight discount centers located in uting and selling to jobbers in the San Diego Houston. We operate in this market and area. throughout themid-West under the Eagle name, Nelson Auto Parts sells to the trade Food Basket is a familiar name in the as well as catering to the public from its San Diego atieawhere we operate 18 stores. Journal of Food Distribution Research February 73/page 84 In the southern region, we operate 60 basic hourly rate of around $4.50 per hour, conventional stores under the Lucky banner. we are talking abouta cost per man-hour for These units range in the area of 20,000 a journeyman clerk terribly close to $6.00 square feet. per hour, At this cost figure, it becomes imperative that we take avery critical look Now we get to our newest type store, at all the job functions going on within a our discount center. We are really proud retail store in order to minimize labor and of these units, with their beautiful ex- thereby minimize expenses, and increase teriors and spacious parking lots. Actually profits. the modern discount center, of which there are 63, has been slightly improved over the One of the greatest labor saving de- years. vices that has ever been developed and used within our industry is a very simple wooden Again, all of these stores are serviced structure, 48 inches by 40 inches, commonly from our Buena Park distribution center that known as a pallet. has grown from 400,000 square feet under cover when it was opened in 1962, to well It has not been too many years in the over a million square feet under cover past when all movement of product within today. It is situated on 63 acres of land our industry was done by hand, Equipment and consists of a grocery and non-foods such as two-wheel hand trucks, four-wheel warehouse, bakery, deli warehouse, meat flat carts or dollies, and conveyor belts processing plant, dairy plant, and a future and rollers were developed and slowly came ice creamplantwhich is under construction. into use in order to move more merchandise in a shorter amount of time and with a re- Our meat processing plant handles about duced cost of labor. These devices helped 3,000 head ofbeef a week. We produce about to make the retail store more productive, but 27 items in the bread line and produce over the movement of merchandise to the retail ~ million units per week. We produce all store from a warehouse was still done pri- dairy items except cottage cheese, butter- marily by hand as the trucks were loaded and milk, yogart , whipped cream, and butter, unloaded by using the muscles in an employ- ee’s back. The development and use-of the As you can probably tell, I am extremely wooden pallet greatly reduced the physical proud of the company I work for. We have energy expended by employees in order to expanded dramatically and rapidly in the last move product thereby increasing their pro- ten years, and this expansion has come about ductility and reducing the labor cost of the through two main causes. supermarket. The number one cause is the fact that Lucky Stores incompletely dedicated to Lucky has been a company totally dedicated the concept that the most efficient method to discounting since 1962. It is through of moving merchandiseat the present time in this dedication to a philosophy that we at- the greatest quantities with the minimization tribute our success, We still feel the of labor costs is through the use of this program we are offering is accepted by our simple wooden pallet. customers as being ~enuine and providing for them the best overall value. Pallets are avery integral part of our operation and at the present time have The number two cause of our success 100,000 in use in our operation in the has been our ability to maintain or reduce southe~ region. expenses in our operation through the use of the most modern and efficient methods and The pallet is used in the movement of equipment available. We are all aware that merchandise and product from all of our the prime cost of doing business in this warehouses and plants to our retail outlets, day and age is labor. When we start talking with the exception of the Harvest Day Bakery. about the cost of labor, including all the Its primary value is in the movement of dry fringe benefits that are now available to groceries as they make up the bulk of the the employee through union contracts, and the tonnage moved throughout warehouse. Non-food February 73/page 85 Journal of Food Distribution Research items are also shipped on pallets either in decision, A great deal of milk and milk their original cases orinthe case of small products was lost before we obtained a dif- items, such as health and beauty aids, in ferent pallet forthc d~iry operation, This grey plastic tubs. These tubs are 16” X 21” pallet measures 40” X ll(Jffand is constructed and are 12” high. They are designed to fit with a solid top. These pallets cost $6.50 on a standard pallet six to a layer and can as compared to $5.50 for the regular pallet. be stacked five high if necessary. They This size pallet will accommodate nine cases are designed so that they can be nested to- of milk to a layer and they can be stacked gether for return to the warehouse. They six high. We use 90,000 milk cases in our cost $5.00 each and we have 1,500 in use at operation. the present time. Domestics, such as towels and blankets are also shipped in As you can see, we move a gigantic tubs . These tubs are twice as large and amount of product on pallets. It, therefore, cost $17.00. We have 1,500 in use. In becomes imperative that our retail stores shipments to the stores from the deli ware- are designed and built with the pallet pro- house, we again begin with the basic pallet. gram in mind. With very few exceptions, and Items such as canned hams are shipped on the these exceptions would be some of our very pallet without any container other than old stores and a few stores which were ac- their original cases. The majority of deli quired from other companies, all our stores merchandise is shipped in a wire bin. This are designed to receive product on pallets. bin measures 31” high and is attached to the pallet. These bins cost $30.00 and con- We have two different methods of re- tain two gates, one on each side of the bin. ceiving at our stores. The first method is These gates can be lifted and folded down the use of a receiving dock or truck pit.