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Bon Appetit - three years later.

Safeway's upscale bon Appetit concept--now three years old and three stores strong--has undergone some subtle, yet significant changes.

The first of the service- and selection-oriented stores debuted in the affluent Bay Area community of Tiburon in Marin County in early 1982. Shortly thereafter, a second Bon Appetit emerged in San Francisco. And last spring, the third offshoot opened in high-income Danville, east of San Francisco, in Contra Costa county. All three gourmet units, which acquired their names through a licensing agreement with Bon Appetit Magazine, were once conventional Safeway stores.

the original philosophy--integrating standard supermarket fare with gourmet foods, an impressive selection of fine wines, choice meats and exotic produce items--has changed little since Bon Appetit's inception. If anything, the selection offered today is more extensive than it was at the start, according to Richard Robinson, the newly appointed Bon Appetit Coordinator.

For example, the 18,000-square-foot Tiburon store offers 100 types of mustard, 65 vinegars and 163 kinds of bulk cheese. The 12,000-square-foot San francisco unit boasts 200 varieties of wine ranging in price from $2.59 to $267.50 a bottle.

"We also continue to offer USDA choice meat and a superb produce variety," adds Robinson. (The store stocks radicchio, limestone lettuce, Maui onions.) "Our selection is broader now in almost every category, and we're continually looking at new items."

After three years of "trial and error," Safeway has made some adjustments in Bon Appetit's recipe.

For example, Bon Appetit now tries to get as many lines as possible supplied from a single source. An outside distributor called Gourmet Specialties Company supplies the stores with an extended array of dry grocery items these days. "We use this supplier as much as we can," says Robinson, "but we still have a tremendous number of independent vendors as well." An example of this is the local supplier that delivers fresh sushi, the Japanese rolled raw fish delicacy, t o the Tuburon store's deli each day.

Another change is taking place in the floral departments of all three stores, which are being expanded in size and selection. Robinson explains that this includes sprucing up the San Francisco units front-of-store floral section. With only 9,200 square feet of total selling space, the store--housed in a building complex--is the smallest of the Bon Appetit units. Robinson says that additions, such as a canopy over the section and some new display cases, will help to make the area look more like a full-fledged department. He adds that the store does a brisk business supplying nearby office buildings with flower arrangements and plants for reception area use--another reason for the expansion.

The Bon Appetit stores have also started to offer more gift baskets during appropriate holiday seasons, according to Robinson. "We didn't have gift baskets at the start, but the response has been tremendous, especially at the San Francisco store."

A recent addition to all three units is plastic carryout bags, which Robinson says are being offered along with the traditional paper sacks, in response to customer requests.

Pleasing shoppers plays a key role in Bon Appetit's product mix as well. While the stores tend to feature specialty lines (positioned at eye level) and nationally advertised brands (on lower shelving) in lieu of private labels and generics, house brands are sometimes brought in to satisfy shoppers. At the San Francisco store, for instance, Manager Gary Johnson points to Safeway's Lucerne brand ice cream sitting side-by-side with the gourmet lines. He explains that many customers were used to getting the private label line at this location before the Bon Appetit conversion took place a few years back.

Demographics also dictate what's offered at the various units. The San Francisco store has a big clientele among office workers, and features institutional-size bags of coffee to accommodate the coffee break crowd. On the other hand, Tiburon and Danville have a wider selection of baby foods because of their suburban locations. Interestingly enough, the San Francisco store carries virtually no dog food because dogs are not allowed in the housing complexes that surround it.

Although new items are continually being added to the Bon Appetit selection, some other products are being deleted. Bulk honey is one specialty that was discontinued because it proved impractical--and messy--to merchandise.

The situation was a little different with fresh pasta, which had originally been made on the premises. According to store Manager Wendell Day of Tiburon, the practice was abandoned because it was found to be "too labor-intensive." Instead, the fresh pasta products offered today come from an outside supplier. Day also says that it is more cost-effective for the Tiburon and Danville stores to supply their service bakeries with goods from local bakers rather than to produce pastries in-house from scratch. He points out that the stores do some bake-off baking of items like French breads, cookies, brownies and pies, but get fancy pastries and elaborate cakes from the outside. (The San Francisco store has no bakery.)

Controlling labor costs is, of course, always a chief concern at service-oriented operations like Bon Appetit. However, the judicious use of part-timers at the three upscale stores is helping to control the situation, according to Louie gonzalez, regional public affairs manager. The Tiburon store, for instance, employs 65 people, 60% of whom are part-timers.

The other labor-cost controller at Bon Appetit is the practice of having service department personnel do "double duty" in areas other than their own during the appropriate peak periods, says Gonzalez.

"We maintain the same level of service that we always have," adds Robinson, but we know when our busy and slow periods are. For example, the bakery personnel might cover the deli phone during the lunch hour."

Bon Appetit has also had to deal with a lot of competition--some of it fierce--in each of its marketing areas. But Robinson says Bon Appetit is more than holding its own. "The concept is showing real sales growth in all of the stores," he contends. Robinson adds that even the 28,000-square-foot Danville unit--which faces the stiffest competition of the three stores--"has been improving weekly."

Not only does the Danville unit face "price competition" from a Lucky store located right across the street, but a nearby independent--Diablo Foods--provides "service" competition as well. Then, there is also another independent in the area, and two Safeway superstores surrounding it on either side in San Ramon and Alamo. Also not far away, are Alpha Beta and Petrini's, the later of which runs 10 supermarkets and four meat markets in northern California. The Danville store still offers the best selection in the area, according to Robinson, who adds that the store is competitive in price.

The San Francisco unit competes with an independent located on Washington Square, with Safeway's North Beach conventional unit, and with the area's many small specialty shops. The Tiburon store is across the street from a small, four-checkout independent and is also not far from a conventional Safeway store. Robinson, however, views Petrini's as the "strictest competitor" for all three stores, due to its meat selection. "We've only been at it for three years and have done quite well," he says. "Petrini's has been in business for years."

Robinson says, "The three marketing areas are all totally different. And the format of the stores is different as well." Although Tiburon and Danville are more similar to each other in design and area demographics than either of them is to the San Francisco store, he points out that, "Danville is marketing to more larger families, while Tiburon serves more couples. And the Tiburon store looks more like a Bon Appetit. That is, the Danville store was opened very fast and doesn't look as ritzy."

As far as advertising is concemed, Robinson says the Tiburon and Danville stores have started running two-color newspaper inserts on Best Food Day for greater visibility, while the San Francisco unit is continuing with regular ROP.

The in-store promotion picture at Bon Appetit also looks bright, Gonzalez says, adding, "We've become better at merchandising the store in the three year's time." He points out that the Tiburon store manager has more room to exercise creativity than does the manager of the cramped San Francisco store. At Tiburon, an elaborate front-of-store Golden Gate Bridge display was a recent attention-getter. Store Manager Day says that he tries to team up high-gross and low-gross products in his displays. For example, a Thanksgiving end-cap display featured a gourmet chutney next to a conventional cranberry sauce.

This blending together of the standards with the specialites is what makes Bon Appetit such a superb testing ground for new products and services that can later be integrated into conventional Safeway stores. Robinson points out that, prior to Bon Appetit, few Safeways in the division had delis. Now, most of the new, conventional units feature these service counters. Other gourmet elements now incorporated into some Safeway conventionals include self-service coffee beans, cheese tables and lobster tanks.

Although Robinson paints a rosy picture of Bon Appetit's sales progress, he says that no additional openings are planned for the foreseeable future. "The opportunity has not presented itself," he explains. Gonzalez concurs. "As we said in the beginning, it's not the type of supermarket you're going to drop in everywhere."
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Author:Linsen, Mary Ann
Publication:Progressive Grocer
Date:Feb 1, 1985
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