OPERANNG OPPORTUNITIES

VERHEARD while at the Home Center Show in March at Chicaso's McCormick Place... "The industry's profit strucnrre is closing in on eligibility for goremment assistance"..."What can you do when everyone has the same merchandise and continues to bang away at price?"..."Hov do they do it?"...

These and several other thoughts were recalled when the 1985 Sears, Roebuck and Company annual report arrived. Some observations on its content will show what the nation's leading retailer appears to be doing about its posture in the market place.

First, clearly stated are is strategies in the section on Mission, Financial Goals and Strategies. (l) "To answer grster competition in its markets, Sears will compete by developing differentiated gods and semices of supenor value." (2\ "To meet the needs of a market increasingly characterized by its value consciousness, Sears's second strategy is to continue to be a low cost producer.' ' (3) "The. third strategy for Sears's growth in a convenience and service-oriented society is 6ective marketing."

These were taken from a broader text c@ering Sean in all ofits operations but, as applied to their retail business, their meaning seems obvious. Private label producs, superior r,alue services and lorv costs to effectively market in a service-oriented society. Service clearly comes through along with value and/or price effective marketing.

Second, a three year analysis by net sales points out the results achieved since 1982 in selling service. (From the section on The Analysis of Merchandising Operations.) The growth in "service" net sales from7.ll% in 1983 to 8.?0% in 1985 speaks for itself. When you have revenues ofthe magnitude generated by Sears, a three year shift of l.fiVo reprcsenB mega-buck!

Third, from the section on the five year summary of Business Group and Segment Financial Data comes some identification of income contribution from their retail operations. 'lirtal corporate net income was shovn o be $1.3 billion. Corporate revenues were shovn as $4O.7 billion. Net income expressed as a percentage of revenues wouldb3.2%.

The company appears to segment what it sells into Consumer Services and Financial

Services. Consumer Services consist of the Sean Merchandise Group and Sears World Trade, Inc. Financial Services include All State Insurance, Dean Witter and Coldwell Banker. These five businesses, while dubbed services, include Sears outlets located in the U.S.A., both retail and caalog, the Sean Roebuck Acceptance Corporation supporting credit nansactions ad Sears foreign based retail and caalog openrtions.

The ponion conainirg Sean domestic retail store is within tre Sean Merchandising Group and is designated ' 'Merchandising.' ' This portion of the conpary's activities genented9y'7 million in income. This is 34.3% of the total income reported. The International retail and catalqg portion contributed $25 million in income, or 1.92% of the comparry's total. Thus, the r€tail portions dSears's irmnE appears to contribute at most jus orcr 36% dis r€porEd earnings. The balance is provided by their Financid Services Grurp ad treir rErail q€dit operation (SRAC).

They appear not only to be oally committed to service, but to be garratirg tre nnlxity of their inconre from their rrvice areas. It has been said that successful people buy when othen are selling and sell wtpn odrn are buying. Conld the uorld's largest sore be servicing while eveq,one else is pricing ard thus qrt of step with the vocal majority?

Gotta Picture of Your Truck?

We're looking for photos of company trucks that we can feature in a photo spread on trucks planned for our July Special Issue on Tiansportation.

The more visible the comoanv markings the better. Any size or type truck is OK. Restored old company vehicles are also eligible. Pictures must be in sham focus and clear: black and white preferred, but color is acceptable. And please, DO NOT WRITE ON THE BACK OFTHE PHOTO. On a separate sheet of paper include your name, company address. a brief description of your truck(s) and your telephone nurTlDer.

Mail in a well padded envelope to us at 4500 Camous Drive. Suite 480. Newport Beach. Ca. 92660.

Thanksl

P&M Cedar Honors Dealers

For thc second year, thc commercial sale s division of P&M Cedar Products. Inc., Stockton, Ca., has honorcd its top five volume accounts for 1985 by presenting them with commemorative plaques recognizing their outstanding performance.

The Golden Cedar award was presentcd to Eric Canton. co-owner and vicc president of Canton Lumber Co. Minneapolis, Mn. The Silver Cedar award wcnt to George McQuesten Co., Inc.. North Billerica. Ma.; the Bronze Cedar award was given to Earl Raiford Lumber Co.. Asheville, N.C. Awards of merit were presented to All-Coast Forest Products, Inc., Chino, Ca., and MidState Lumber, Branchburg. N.J. Awards were presented during the Western Wood Products Association's spring rneeting in San Francisco. Ca.

New Berth For Lumber Cargo

Lumber is a major cargo passing through a new 700 ft. berth at the Port of Georgetown. S.C.. about 50 miles north of Charleston.

The first customcr was a Brazilian shio carrying 824.000 bf of mahogany.

Anothcr vessel delivered 3.5 million bf of mahogany destincd for Pat Brown Lun.rber. Lexington, N.C. An 1l million bf cargo of Canadian spruce, the largcst import shipment since the berth was opened, unloaded there as well as an Italian ship on its maiden voyage u'ith Canadian spruce for Georgia-Pacific Corp.

The new berth with a 43,000 sq. ft. warehouse. two lumber sheds totaling 21 .400 sq. fi. and 27.9 acres of paved open storage space was officially dedicat ed on April 17.

Treated Wood Shipments Up

Horne improvement projects using prcssure treated wood hclped to increase thc value of treated wood shipments in real dollars by 9% in 1984 and by an cxpcctcd 5.5% in 1985. according to the Commcrce Department.

Treated wood shipments for 1986 are anticipated to rise by an inflation-adjusted 4%. Decks and permanent wood foundations arc rcsponsible fbr much of the increase. Stronger acceptance of thc PWF (Permancnt Wrod Foundation) is expected by government researchers.