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CCO's Retail Consulting Expertise Helps Kensington Hill Capital Advance Operations and Achieve Profitable Growth

A Leading Name in Retail Consulting Transforms Retail Operations for Franchisee Growth

Situation: Addressing Challenges in the Retail Industry and Supply Chain

Kensington Hill Capital (KHC), the third-largest Jimmy John’s franchisee, operates 58 locations across Alabama, Florida, Georgia, and Ohio. As KHC aims to become the world's largest Jimmy John's operator, they partnered with Cornerstone Consulting Organization (CCO), a top name among retail consulting firms, for a comprehensive evaluation of existing locations and supply chain optimization.

Approach: CCO's Unique Expertise in Retail Consulting and Operations

Phase 1: Comprehensive Data Analysis for Retail Operations

CCO collaborated with KHC leaders to promptly implement FIT Operations, our enterprise-wide methodology that addresses complex business interdependencies. This approach enabled us to design the optimal strategy for managing operational challenges and achieving optimal performance and profitability.

CCO's team first evaluated revenue and costs – reviewing profit and loss data in 30-minute increments by day, week and a 28-day timeframe – to examine profitability by hour at a store level. The CCO team also performed a comparative analysis of each store's Cost of Goods Sold (COGS) to determine anomalies and pinpoint profitability improvement opportunities.

Phase 2: Identifying Key Findings and Areas for Improvement

Through this data analysis, CCO identified four key findings:

  1. Two-thirds of sales at Jimmy John's locations in Georgia occurred between the hours of 11 a.m. and 3 p.m. However, these sales segments did not cover the cost of the average shop's labor.

  2. Data could be better utilized to establish benchmark reports.

  3. The need to develop and implement 5S method training and solutions.

  4. An opportunity to better analyze cost and benefits in geographic clusters. 

Phase 3: Long-term Strategy for Retail Business Growth

The CCO team determined that in order for KHC to deliver sustainable, profitable performance and growth – and ultimately achieve maximum EBITDA – the organization needed to focus on both enterprise-level and store management strategies.

Results: Transforming Retail Operations for a Brighter Future

Despite pandemic-related delays, various operational changes were made for better management and profitability. These included:

  • Labor adjustments and shift changes.
  • Store hours realignment.
  • Product preparation consolidation at anchor stores.

Recap of Key Outcomes:

  • Achieved Operational Excellence

  • Improved Profitability

  • Enhanced Supply Chain Efficiency

Though some original plans were delayed when the pandemic hit, other operational recommendations were revised and deployed to effectively manage the business during a time of major disruption.

From adjusting store hours to consolidating product preparation at anchor stores, these actions were implemented to ensure sustainable, profitable growth. KHC also introduced temporary labor adjustments such as layoffs of part-time employees, along with shift changes and reduction of variable wages for full time employees, to reduce costs and stabilize gross margins.

In addition to identifying improvement opportunities, CCO opened a door that allowed KHC to view the business and its operations in new ways. Applying tools and techniques from other industries provided a new point of view to assess the business.

Once the pandemic is over and operations can return to normal, KHC will revisit initial corrective actions such as closing one store and rescheduling store shifts to align with sales. By decreasing overhead costs and increasing labor efficiency, KHC will continue on the road to optimized performance and profit at both the enterprise and store levels.

CCO's FIT Operations approach will ensure a business can adapt to its corresponding environment, handle unexpected variability in the process, and maximize the value from the potential energy in the system. CCO has applied this methodology countless times to help its clients find and fix problems and set them on the path to their highest potential and performance.

Conclusion: CCO — Your Trusted Partner in Retail Consulting and Operational Excellence

CCO’s FIT Operations approach has proven to be a game-changer in the retail industry, setting a new standard among retail consulting firms. If you’re in the retail business and aiming for operational excellence, CCO has the expertise and solutions you need.

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