Background information

Saint Savers Mart $($SSM$)$ is a chain of grocery stores based in South Australia. SSM was first established by Gregory Williams in Goodwood, South Australia, in the $1960$s to sell a broad range of reasonably priced goods to the local community.

SSM$\text{'}$s motto is:

$$Where every purchase feels like a $$heavenly$$ deal$.$

SSM found success by offering a low$-$cost alternative to large grocery chains while still maintaining a broad range of products. The company was so successful that Gregory commenced expanding his network of stores to other suburbs around Adelaide and into some of the larger regional cities, such as Mount Gambier and Murray Bridge. As of today, SSM has $10$ stores across South Australia and has plans to grow further.

Gregory has recently retired and has handed management and ownership of the company to his daughter, Jordan Williams. Jordan has an extensive legal background, and she has been focused on automating business processes by using technology to ensure that SSM achieves cost savings.

Ownership structure

SSM is operated as a family business and is wholly owned by Jordan. As the company$$s rapid growth is putting a major strain on Jordan, she has agreed with management that the company needs to be sold to a larger operator within the next $10$ years.

In preparation for future growth and a potential sale, Jordan has established a board consisting of herself $($as the Managing Director$),$ an independent chairperson and two independent directors. The board also acts as a risk committee to manage the risk management process for SSM$.$ The board members have a broad range of experience $$ including in the fields of finance, information technology and logistics $$ which is relevant and helpful to managing SSM$$s operations.

Risk management

After the Board was established, its first projects were the development of a risk appetite statement and the completion of a risk assessment. To prepare the risk appetite statement, SSM engaged its usual accounting firm, Parto Chartered Accountants. Parto Chartered Accountants has drafted the statement, and it has left SSM responsible for populating the risk appetite fields for each risk category.

SSM outsources most of its financial compliance work; however, it understands that the market is sensitive to economic conditions, and therefore must manage its financial risks to protect itself. Whilst SSM understands that it may not completely eliminate financial risks, it seeks to manage risk to a reasonable level.Company overview

SSM$\text{'}$s operations include the sourcing, procurement, transportation, and sale of fresh and packaged produce. SSM owns a warehouse which is used centrally to receive all goods. Once produce is received to the central warehouse, it is sorted and allocated to stores based on their individual forecasted sales and requirements. Goods received by the stores are then unboxed and stocked to shelves by staff, who are responsible for processing sales at sales registers.

Each store is led by a manager who is responsible for the day$-$to$-$day operations of the store. This includes ensuring goods are displayed appropriately, stock is received and accounted for, expiry of products is monitored, expired products are removed, and sufficient staff are rostered to provide exceptional customer service. All SSM stores operate independently and are each responsible for developing forecasts as well as meeting their own revenue and cost budgets, with store managers receiving bonuses based on their respective store's performance each financial year.

SSM$\text{'}$s support services for its stores $$ including information technology, finance, payroll, human resources, and limited legal support $$ operates out of SSM$$s central warehouse. SSM$$s support services team is small and inexperienced; as such, when it receives any queries that are beyond the team$$s skillset, SSM seeks external advice from L&L$,$ an Australian based legal firm.

Historically, SSM has used debt financing to fund store expansions, and the company currently holds a relatively high amount of debt due to its most recent expansion. Due to some of the company's packaged goods supply chains, SSM is exposed to foreign exchange risk, SSM$\text{'}$s financial controller is responsible in monitoring the company's foreign exchange risk and debt levels.

SSM methodology

Product quality and supply

SSM prides itself on its broad range of fresh and packaged produce and its ability to consistently supply high quality goods to customers without running out of stock. To achieve this, SSM orders quality and in$-$demand produce at the required volume, which enables SSM to lock in supply of products at reasonable prices and ensures a steady supply for their customers. SSM recognises this strategy requires extensive forecasting to determine expected demand and optimal selling price.

Customer safety

Securing quality produce and ensuring that produce is safe for consumption are priorities for SSM$.$ The company sources mainly local produ