Cost-cutting conversion.

ASSOCIATED WHOLESALERS, INC HAS A SUGGESTION FOR INDEPENDENTS STUCK WITH AN UNPROFITABLE OUTDATED STORE--convert it to a Save Smart Discount Foods, AWI's no-frills, limited assortment, price-impact format selling groceries for up to 50% less than conventional full-service stores.

"Everything in our store talks to low prices," says Fred Foose, director of marketing/advertising at Robesonia, Pa.-based AWI, which services more than 2,400 accounts through distribution centers in Robesonia and York, Pa., and its White Rose facility in Carteret, N J. "That's what we want customers to remember us by," he says. "We want them to be ingrained to shop here first. Fill up your basket with the things you need so you can save money. Then if you find it necessary that you must have that unique mustard in your house go to that other store, but we're here to take care of your everyday needs."

The first Save Smart opened Sept. 22 in a working class blue collar neighborhood of York, Pa., housed in a 30,000-square-foot, 1970s-vintage, corporate-owned former Nell's ShurFine. "We converted the store over in one week," Foose says.

The prototype competes directly against Weis Markets and Giant Carlisle; a couple of miles away are a Wal-Mart Supercenter and BJ's Wholesale Club. Aldi, Save-A-Lot and Wakefern's PriceRite limited assortment formats operate in the York area, but not on the city's west side.

Shoppers entering Save Smart are met with aisles of case-cut grocery products, walls lined with tables and pallets of closeout merchandise, plus a fair assortment of perishables housed in a clean, neat, easy-to-shop environment. Costs are kept down by employing everyday low pricing. "In this format we have very few price changes because it is a true EDLP philosophy, which helps with the costs," says Steve Hunsicker, operations manager. "I don't have to have a price coordinator doing 56 price changes each week."

Having customers use discarded boxes to carry purchases and charging 3-cents for plastic bags further curtails costs. Service departments--bakery, deli, seafood, pharmacy--have been eliminated to further trim expenses. Service meat has been replaced with 24 feet of case-ready popular items such as ground beef, sausage, ham, pork chops, chuck roasts, and chicken.

Other slower turning meat items are sold in a neighboring freezer case. "The person who wants a strip steak can still get it. They just can't get it over here fresh," Hun-sicker says.

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According to Foose, there's a higher representation of produce--some 69 items--than in competing limited assortment outlets. "A key difference is that we did not want to reduce the importance of produce for the customer in that basket experience," he says.

With only 1,100 SKUs, the majority being Shur Savings and White Rose private labels, shoppers may not have the brand and size assortment of conventional stores, but they can still get a week's worth of groceries, AWI officials say. "Our whole principle is low overhead equals low price," Foose says. "Everything we do is designed to set our prices at 30% to 50% lower than a conventional store."

To make his case, Foose points to a display of Martin's potato chips. They're $2.97 a bag, even though the bag is pre-priced at $4.59, and they are fresh with a sell-by date two months out. "Martin's factory is two miles down the road and when this store was ShurFine this was our No. 1 Martin's store, so it is important that we continue to carry them," he says.

RELATED ARTICLE: Save Smart Store facts

GRAND OPENING DATE: Sept. 22, 2008

STORE SIZE: 30,000 square feet

NUMBER OF SKUS: 1,100

NUMBER OF ASSOCIATES: 20

STORE HOURS: 8 a.m. to 8 p.m., Monday to Saturday; 9 a.m. to 5 p.m. Sunday

WHOLESALER/OPERATOR: AWI, Robesonia, Pa.

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AWI debuts save smart, a deep-discount format that can help independents weather tough economic times.