SMART & FRIENDLY CUSTOMER PRAISE FOR VARIETY AND SERVICE HELP 130-YEAR-OLD LOCAL GROCER SUCCEED.

Byline: Brent Hopkins Staff Writer

It's 1871, and the hip, young shepherd is looking for some supplies. First stop: Smart & Final.

The name was a little different back then, operating under the sign of Hellman-Haas Grocery Co., and its business was smaller, but at heart, it's the same local firm that's been ringing up sales for 130 years. Of course, Hellman-Haas didn't post sales of $1.86 billion in a year - that's taken the company quite a bit of growth.

``We're kind of the forgotten company in Southern California,'' said Chief Executive Officer Ross Roeder. ``We've had such big companies here over the years, and Smart & Final was kind of overlooked. In that 130 years though, that's quite a story.''

It's a story that's taken the firm from a supply store downtown, to a multinational warehouse grocery operation spanning western North America. J.S. Smart bought in in 1914, and partner H.D. Final signed on a year later, lending their surnames to the moniker that lasts to this day. The secret, according to Roeder, lies in its merchandise quality.

``We really have offered a very solid value over the years,'' he said. ``That holds you in pretty good status as the world is changing, and God knows, it sure is changing these days.''

With its discounted bulk buys, from sodas to cleaning supplies, the chain won over a legion of caterers and small businessmen. Though that sustained it over the years, the company is looking to keep modern, both through the introduction of new merchandise, such as produce and frozen food in the last few years, and the expansion and remodeling of its stores. Plans are in the works to revamp at least one of its San Fernando Valley sites, as well as to develop as many as three more locations locally.

This plan of developing a niche and aggressively clinging to it has endeared the chain both to Wall Street experts and shoppers. In the past six months, its share price has risen from a low near $6 to a crest near $11 last month. Though it dipped slightly in recent weeks, it has been on the rise in the last week, trading in the low $10 range. It closed up 38 cents Thursday at $10.12.

``I like what the management's doing now,'' said Jonathan H. Ziegler, a food and drug analyst for Deutsch Bank Alex. Brown Inc. ``I would have liked to have seen them doing what they're doing now a few years ago. I think they've got a winning concept, and their execution is good and getting even better.''

Marcus Meade, owner and chef of North Hollywood's Uncle Andre's BBQ agrees. The 31-year-old entrepreneur spends nearly $100 daily for meat and seasonings, which puts him on a first-name basis with most of the employees at the Laurel Canyon Boulevard location.

``With the prices and the convenience, I can usually get what I need,'' he said, peeling off five $20 bills from a massive roll of cash to pay for his hot links. ``The staff's real helpful, too.''

Smart & Final also wins praise for its variety. Though gallon jars of mayonnaise and flats of soda are top sellers, restaurateurs also are drawn to its specialty items.

``You can't find things like this anywhere else,'' said Douglas Durben, picking up a six-pack of ketchup dispensers. ``And it's cheaper to buy here than from the big suppliers.''

The 45-year-old owner of Chili Judi, a North Hollywood burger joint, Durben also counts himself as a regular customer, stopping in every other day for dozens of buns and gallons of ketchup.

``These people are our bread and butter,'' said manager T.J. Royon. ``At 500 bucks a pop, you've got to take care of folks like that.''

Though the patronage of small-business owners has always been crucial to the company's success, a significant percentage of customers are home shoppers and small-scale party planners, Roeder said.

``From the high school concession stand to the local Elks Lodge picnic, we'll supply them,'' he said.

This is key to the chain's success, since the number of Americans eating out is on the rise. With many hungry folks choosing to pick up a meal on the way home from work, rather than cook it themselves, most grocers are finding themselves in a tight spot. Not so for Smart & Final, Roeder reported.

``What's great for us is that the one area of in-home consumption of food that hasn't changed is entertainment,'' he said. ``We're in a niche that services both businesses and the serious shopper.''

With this in mind, store merchandise is flexible. In Royon's North Hollywood spot, the product mix is targeted toward both the Jewish and Latino communities. In the meat section, kosher beef sits only a few feet from marinated carne asada.

According to Royon, the main draw isn't really the deals, but the treatment customers get when they walk in the door.

``When they walk in the store, they'll get a hello and a smile,'' he said, before greeting a shopper. ``We'll make them feel good once they're here.''

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3 photos

Photo:

(1 -- color) Condiments by the gallon stock the shelves of Smart & Final emporium in North Hollywood, which attracts restaurant owners and homemakers alike.

(2 -- color) A friendly smile without a request for membership card is the greeting Smart & Final aims to offer entering shoppers.

(3) Restaurant owner Douglas Durben picks up supplies for his North Hollywood burger place at the local Smart & Final.

Hans Gutknecht/Staff Photographer