Kudler Fine Food (Kff)

Introduction

Kudler Find Foods’ goal is to be the premier gourmet grocery store for savvy shoppers who are searching for the finest meats, produce, chesses, and wine (Kudler Fines Foods). Kudler Fines Foods (KFF) is a grocery stores offers premium products. After opening the successful store in La Jolla, KFF expands adding two more stores. Although KFF receives moderate success, it faces two keys challenges; (a) managing the inventory and (b) direct and indirect competitions. The goal is to study the key problems KFF faces and recommend feasible solutions.

(a) Managing the Inventory

K FF carries fresh and fine food and products for their customer. KFF’s Cost of Goods Sold (CGS) is 64.5% of the Sales in 2003. Cost of goods sold is the direct cost of the products and services the business sells. This includes the cost of labor and overhead to produce the goods and freight to obtain the goods (3 Keys to Profitability). As KFF carry finest products around the world, it had very high Cost of Goods Sold. Majority of the KFF product are perishable goods. It rotates out 12% the inventory every two or three days. These perished goods account for approximately of $835,814 (12% of Cost of Goods Sold of $6,965,118) which is very significant. The best procedure that could mitigate the loss of perishable goods is inventory control. Inventory control consists of attention to product condition and shelf life during the storage period, tracking the product based on date of manufacture or product expiration (Reducing Spoilage Risks…). Emphasis on reduction of inventory using just-in-time delivery system could yield in lessen overstocking of goods.

(b) Direct and Indirect Competitors

According to a study by the U.S. Small Business Association, only 2/3 of all small business startups survive the first two years and less than half make it to four years (Starting a Business). The main reason for the failure of small businesses is competition. Many small businesses do not have...