True Value 2015 Annual Report Download - page 3

2 TRUE VALUE 2015 ANNUAL REPORT
We have completed the first full year of executing our long-term
strategic plan to build a stronger, faster growing, more profitable
True Value. It was a year spent doing the hard work required to
drive transformation. We’re proud of the progress we have made
and grateful for the part you’ve played in it.
DEAR TRUE VALUE COLLEAGUES:
TO OUR MEMBERS, SUPPLY PARTNERS AND ASSOCIATES
Transformational change in progress
When we first developed our strategic plan,
we knew the key to a long-term future
was transformational change. This is not
incremental change, with small improvements
here and there. We’re looking to drive
significant improvement across every aspect
of our business, organizing our eorts and
initiatives under three pillars: engagement,
growth and eciency.
We’re very pleased with the progress we
have made across each of the three pillars.
Not everything went exactly as planned. No
transformation ever does. Our journey together
is still in the early stages, but we’re starting
to see positive momentum. The results are
starting to come.
Investing in the future of True Value
Transformation requires investment. As
planned, this year we made much-needed
investments in True Value’s infrastructure
and capabilities to support member growth
and profitability.
We are reinvesting significant resources
to build a better True Value—for today’s
members, today’s customers, and for
the members and customers of the future.
This reinvestment will last for the next several
years and create an organization for the
next generation.
So, what are we getting so far for our
investment?
• National advertising that far surpasses
past strategies in sophistication and reach.
Our investment is driving real gains in
brand awareness and, more important, for
event program participants it’s delivering
dramatically better sales in promoted items
than non-participants. See page 6 of the
annual report for more detail.
JOHN R. HARTMANN AND
BRENT A. BURGER
TRUE VALUE 2015 ANNUAL REPORT 3
NATIONAL ADVERTISING HAS BEEN POSITIVELY IMPACTING BRAND AWARENESS AND, FOR PROGRAM PARTICIPANTS, SALES.
• Educational support like our new Customer
Service Training Program, which we
developed to help our members teach their
people how to be more eective customer
relationship builders. Read more about it
on page 8.
• Programs like our Customized True Blue
(CTB) assortments and our Every Day
Low Pricing (EDLP) program, to help our
members make sure
their customers find
what they want,
for a price they
like. See page 10
for more detail on
the CTB program.
• An overhaul of our technology and
infrastructure that will drive next-level
eciency aimed at increasing your margins
and improving the quality of service we
provide you. Our initiatives range from
revamps of our network, applications and
business capabilities to a brand-new,
more user-friendly intranet site, to an
expanded relationship with our partner,
transportation leader Ryder. See page 12 for
the Ryder story.
Positive 2014-2015 performance
During this time of transformation, sales growth
performance has improved significantly.
Between 2005 and 2013, our sales declined.
In 2014 and 2015, the first two years of our
strategic plan, growth averaged 3.5 percent.
And for the five years prior to the start of
our plan, your retail sales growth averaged
less than one percent. In 2014 and 2015, year-
over-year retail sales growth has averaged 3.1
percent, with Destination True Value (DTV)
stores averaging 4.75 percent.
It was a solid year for DTV, with members
completing a total of more than 600,000
square feet in remodels during the year just
past, and there’s even more in the pipeline for
2016. This is great news for the co-op, because
DTV works. All our data continues to show that
stores with a modern, relevant format like DTV
grow much faster than non-updated ones.
Another highlight for 2015 was the addition of
380,000 square feet of relevant retail space.
And the best part is, with solid performers
like new co-op member Busy Beaver and new
space using the latest DTV designs, we’re doing
much more than adding space. We’re making
our co-op stronger and better.