Store managers take on broader role

Home Channel News, Dec 11, 2000

They assume more control over product mix but are under greater pressure to meet productivity targets

A store manager at Lowe's Cos. is a multi-skilled business person running a $30 million enterprise with 130,000 square feet of retail selling space, 200 employees and $6 million in inventory. During a typically strenuous 12-hour workday, that manager's responsibilities include ordering product, hiring employees, resetting departments, crunching numbers, checking in-stock levels, leading staff meetings and handling customer complaints. That manager is also training five assistants to do exactly what he does.

Being a store manager is no joke. It's a hectic job with long work hours, many of them spent on one's feet. It requires a talent for retailing -- a modicum of merchandising savvy, a grasp of operational efficiencies, a head for business, a sharp focus on customer service -- as well as people skills, team-building abilities and leadership qualities.

Lowe's ability to groom and retain people of store-manager caliber will play a key role in how successful it becomes as a national chain. The company's chairman and CEO Bob Tillman said that Lowe's has invested a lot of time and effort in creating a pool of trained store managers that will allow the retailer to confidently open 125 stores in 2001.

"The secret of our success boils down to good store managers," Tillman said. "We don't have a single bad store anywhere. We've got some underperforming stores because of bad managers. [Our stores] are major business enterprises -- some of them are $40 [million] or $50 million dollar retail stores -- so the knowledge and the expertise that the store manager has to have are a lot greater than they were two or three years ago. A store manager today has to have the core competency that a regional vice president had five years ago."

With Lowe's entering new, often unfamiliar markets, it is loosening its highly centralized operational grip and granting store managers a greater role in determining the product mix of their stores. Lowe's is also placing some of the responsibility for assessing the specific product and service needs of their respective communities on store managers.

"It used to be that we took what we were given, so we'd get items that didn't pertain to our area," recalled Eric Ringer, who manages the Lowe's store in Muncie, Ind. Ringer explained that the store would receive shipments of 24-inch outdoor yard hydrants, which were useless to his customers "because in the Midwest, we need to carry four-foot hydrants so that they can go below the frost line." Ringer said Lowe's has become much more open to input from store managers over the last few years.

Mark Walker, who managers a store in Long Beach, Calif., said that in new markets, the manager's involvement in merchandising begins several weeks before the store opens.

"The first thing we do before we open a store is a market survey," Walker said. "The company gives us a laptop computer and we check the competition in the market we're going into. We can add any product to the mix, so we have the ability to go in and tailor the store before it even opens."

But there is accountability, of course. Mike Shirley, a store manager in North Dallas, said that if he wants to make a change in a product, he has to present a full business plan to his district manager, including return-on-assets projections. "This way, managers aren't just going in all kinds of directions on their own," Shirley said. In fact, as of February of this year, Lowe's started tying store managers' bonuses to return on current assets.

"We spent a lot of time in February educating our store managers on the importance of ROCA, so it's been a real learning curve this year for some of them," said Lowe's chief operating officer Larry Stone. "We help them think in terms of a three-legged stool, where you've got sales, profits and ROCA holding up that stool. They've got to learn to balance their business, because that's really what management is all about." Stone added that Lowe's isn't only holding store managers accountable for their stores' financial results, but also helping them make more intelligent business decisions by providing them with the right kind of information.

"We've given them a lot more tools and better reports," Stone said. "They can go in and look at the inventory they want to pull, look at how much they've sold year-to-date, look at what's available in their distribution centers. Several years ago they'd just go in the aisle and order 10 of everything, so we had a lot of overstocks doing that."

Lowe's is also making it a point to communicate market intelligence to store managers. "We're giving them facts and measurements so they can run their businesses better," Stone said. "What are the trends in their particular markets? What is the demographic makeup in the market? What is the opportunity in the market in terms of the products we sell? Is it a market where we should be doing a much better job in paint or kitchen cabinets or flooring?"