McGregor Department Store

To: Mr. McGregor

From: Alan Lee

CC: N/A

Date 2-28-14

Re: N/A

Mr. McGregor I have given careful consideration to our discussion related to changing the employee discount at McGregor’s Department Store. I am in agreement with your goal for McGregor’s to come into closer alignment with other area department stores discount policies. The current 6 tier discount system can be confusing and is negatively affecting the potential for a larger profit margin. It would be in the company’s best interest to change this current policy. Further consideration should be taken to change the discount system to a 10% standard discount on all items, for all employees, regardless of their job or years of service. Further simplifying the discount system would decrease confusion, adding all personnel could increase moral and positively affect the profit margin.

I am aware that you feel there may be some resistance to implementing the new discount policy, especially among the top management positions. Consideration to offer another incentive to this level of employee could increase their acceptance to the decrease discount. Perhaps an additional day of paid vacation or a holiday voucher for an item that McGregor’s sells could be offered.

Other measures to increase profits could be accomplished by excluding the candy and tobacco merchandise.  Currently the store is not making a profit on the sale of such items.  These items tie up the available cash flow and utilize storage areas in the warehouse, as well as the store shelves.  These store areas could be used to increase volumes of higher profit margin goods, such as junior clothing wear. Increasing this clothing area could attract a younger shopping population, as well as younger clerks desiring to work in the store.

Further consideration should be taken on proactive measures to decrease “lost” items. A sale of high profit goods and lower overall employee discount would increase the profit margin; however security items such as cameras could be purchased with the available increased profit margin. Prevention of “lost” items and making these items available for sale to customers would even further increase the profit margin.

McGregor’s has a historically reputation of emphasizing personal service. However, considerations of a minimum required purchase of goods could be instituted to all account customers. This consideration of changing the store’s current delivery policy could further increase profit margin.

 I am aware that your concerns are to increase McGregor’s competitive abilities by being a department store that adapts to changing client demands, offers new retailing items and increases profit margins to promote future growth of the company. The future for your company depends on being proactive towards change. I encourage you to review my suggestions and consider how your company can stay competitive in today’s merchandise world and increase the profit in the long term.