A unique and succesful formula

Jun 30, 2005

TOM&CO

Background and growth of Tom & co

The pet specialty store Tom & Co celebrated its 13th anniversary this year. In Belgium, Tom & Co is a unique concept. The pet retail chain is part of the Delhaize group, and is primarily specialised in the self-service sale of food products, care products and accessories for pets. Tom & Co' s strategy is based on providing personal service and a broad range of products. A successful formula within the Belgian market of food and non-food products for pets, a segment which is experiencing considerable growth.

The first shop opened its doors in April of 1991 and stocked a range consisting of approximately 1990 different products. By late 1996, the network consisted of 15 stores. At that point, Tom & Co was ready to expand further, primarily via franchising. As a result, the chain experienced enormous growth in the period from 1997 to 2000, expanding from 15 to 75 shops.

In October of 2000, Tom & Co took over 12 shops previously belonging to the Amizoo chain.

Since that time, the total number of shops has risen to 93, 12 of which are Animal centres, and in 2003 the company achieved a turnover of € 100 million. The breakdown within this turnover is:

- dog products 53%

- cat products 27%

- bird-, small animal- and aquarium products 20%.

At present, Tom &Co has established a presence throughout Belgium and the range has been expanded to 3600 products and to 5500 in the Animal Centres. The major difference in the number of different items may be explained primarily by the fact that the sale of live-stock is divided up into three categories: fish, birds and small animals. As a result, in addition to the livestock, there is also a broad assortment of related products available for sale. This is also the reason that the size of the Animal Centre stores is not 400 ㎡but instead 750 ㎡.

The Key to success

The Tom &Co shops enjoy visitor traffic of approximately 18,000 people per day.

There are various reasons offered in explanation of why exactly customers do their shopping at Tom & Co instead of the average supermarket. First of all, the pet lovers choose Tom & Co because of the wide selection. In this specialty store, consumers find a number of products that are not available in supermarkets such as super premium labels, parapharmaceuticals and non-food articles. Additionally, the store's approach also plays an important role. The emphasis is being placed more and more on the concept of "fun shopping".

Moreover, the relationship with the customer is being reinforced thanks to this "fun shopping" as well as the personal contact. Tom &Co continues to offer fun products that make it appealing for the consumer to keep returning to the store. Examples include bones for cats, ice cream for dogs to keep them healthy and fit, snacks to freshen pets' breath, etc.

In order to ensure that the customer is aware of Tom & Co' s special offers, the company distributes folders to some 1.3 million households on a monthly basis. In this 8-page folder, items are covered such as holiday product previews, the Tom & Co anniversary, the veterinarian column, the fun items, etc.

The emotional aspect involved in keeping pets plays an important role and Tom & Co clearly incorporates this into its marketing strategies.

The Delhaize group works with a loyalty card for customers. The Pluskaart as it is called is a card which consumers use to earn points on every purchase which they can then save up and apply toward short vacations, savings on purchases of certain items, meals at selected restaurants, etc.

Private Label

With Pets Budget, a competitively priced house brand, Tom & Co is able to respond to the pressure in the market due to the presence of the discounters. The Tom & Co label is primarily used for products in the non-food range. There is also another Tom & Co label that covers the medium-priced range.

Thanks to a logistics partner, the Tom & Co stores are supplied with a total of 150 deliveries per week, on average. Of course an EDI is used to ensure that the logistics run as smoothly as possible.

Staff training

On a regular basis, the franchisees are invited to participate in internal training programmes involving knowledge on products of specific pets. These programmes are given in collaboration with suppliers, and sometimes include factory visits at the end.

On the Internet

Tom & Co does not yet have an online shop where customers may order a variety of products separate from the website. Of course the company does have ideas how a Tom & Co online may be set up in the future.

Tom & Co online may be set up in the community

Tom & Co in the community

Over the years, Tom & Co has developed a partnership with non-profit organisations such as:

. V.Z.W. nature reserves or Natagora which is responsible for +/-10,000 hectares of nature conservation lands.

. Dyadis, an organisation which is dedicated to training dogs for the physically disabled.

In cooperation with the faculties of animal medicine at the Universities of Ghent and Liè-ge, every year Tom & Co will be presenting an award to a student in his or her final year of study for a final project involving the theme of pets.

Retail Sales of Pet Food and Pet Supllies in Belgium:Value Est. 2003

€ million

2003 (Est.)

Petfood 74%

Supplies 26%

Source: Trade associations (PFMA ), trade press (The Grocer, madd.Co.uk), company research, store checks, trade interviews, Euromonitor estimates

Total number of Shops Belgium

Approx. 1,200 (from extremely small-scale shops in terms of surface area to large-scale garden centres)

Main pet retail chains #shops

Aveve garden centres 230

Horta garden centres 23

Delhaize Groep

Delhaize Groep is a Belgian international food distributor, active in ten countries on three continents. Delhaize Groep stock is listed on the Euronext Brussel Exchange (Symbol: DELB) and the New York Stock Exchange.

At the end of 2003,the sales network of the Delhaize Groep comprised 2559 shops. The Delhaize Groep achieved a turnover of €18.8 billion in 2003, and a net profit of €171.30 million. The Delhaize Groep employs approximately 142,000 people in total. Delhaize Groep strives to occupy a leading position in the food distribution sector when it comes to important mature and up-and-coming markets. To this end, strong regional businesses are set up that both reap the benefits of as well as make a contribution to the strength, expertise and best practises of the group. Delhaize Groep approaches its market with various shop formulas. The group aims to create added value for its customers and offer a locally customized shop experience in each of its markets. The group also imposes high social, ethic and environmental standards upon itself. (www.delhaize.be)