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Elegance on a grand scale.

"Good news, Mother. I've located a store in Minneapolis that carries the Lalique crystal figurine you've been looking for. It's $6,800. Shall I purchase it?"

"Of course, darling! Wherever did you find it?"

"In a supermarket."

Plenty of high-style operators have done well over the years, but few have catered to the carriage trade as successfully as Don Byerly and company.

Even before the first Byerly's store opened nearly 20 years ago, word had spread throughout Minneapolis that this was to be no ordinary grocery store. Let's face it, whoever heard of a businessman showing samples of wallpaper to community leaders prior to hanging it? For that matter, whoever heard of hanging wallpaper in a supermarket?

But now anyone even remotely involved in the food business knows that Byerly, the 44-year-old founder and president of the company that bears his name, has spent his entire career giving new meaning to the word unorthodox. Indeed, the above dialogue is no extravagant exaggeration; the flagship of Byerly's six-store chain has a gift shop under its roof where customers can buy one item that costs as much as most Americans would shell out for a modest home.

What makes Byerly's so intriguing, however, is that its appeal--despite the plush decor and outlandish assortment of merchandise--is by no means limited to the upper class. Sure, there's a certain amount of status attached to being a regular Byerly's customer--being seen carrying a Byerly's shopping sack is considered in vogue in certain circles. But who says that only those in the high-income brackets enjoy being pampered with service in a stylish setting?

"I've never felt we should, or could, survive solely on the upscale shopper," says Byerly. His formula for attracting a broader customer base: low prices on hardline groceries.

The catch here is that groceries account for just 35% of total sales--a meaningless computation to your average shopper, but a panacea of sorts for any retailer susceptible to a "high price" reputation. When the competition gets mean, you can drop your gross a full percentage point and all it costs you is one-third of 1%.

But let's remember that Don Byerly hasn't made his mark selling paper towels. Store volume, along with the nationwide media attention the chain has attracted, has derived from this executive's ability to transform the shopping experience from a chore into a cherished pastime. "The supermarket that has no reason to exist other than location is going to become extinct," says Byerly. "That's why I like to do things that make us conspicuously different."

Talk about understatements. Ostentatious in its decor ("We take the money others spend on advertising and put it into fixtures and wallcoverings"), unlimited in selection (fresh fish is flown in daily and the produce department features just about everything that grows) and unmatched in service (employees in their color-coordinated outfits are hard to miss), Byerly's more closely resembles a chic department store than a supermarket. In this atmosphere, there is a greater willingness to "splurge" on high-quality gourmet food and to indulge in general merchandise items that range in price to five figures.

Brilliant Adaptation

Practically born into the business (his father, Russ, was chairman of Super Valu) Byerly had ambitions of being a retail grocer ever since he was old enough to stand up in a shopping cart. After attending Michigan State, where he studied food merchandising, Byerly travelled the country looking at supermarkets. Today, he readily admits that his concept was not so much an invention as an adaptation of other operators' ideas.

That may be so, but there is at least one aspect of his operation that is unique: the corporate structure. Basically, there is none, at least not in the traditional sense. "The executive staff functions primarily as an advisory arm," says Byerly. Not only is each store run almost totally independent of corporate supervision, but there are no buyers, no supervisors and no directors of human resources. For that matter, there's no personal department--despite the fact that Byerly's has over 1,800 employees. You could also say that there aren't any store managers ("We call them general managers"), but that's more a case of semantics. There's nothing ambiquous, however, about the role of department managers. Each is responsible for his or her own department's personnel and P&L.

With so much of the operational function being handled at store level, Byerly spends a good deal of his time doing what he enjoys most--experimenting with new innovations and refining what he refers to as the Byerly "culture".

This drive for absolute consistency in image even extends to the company's private label, which is typically more expensive than similar national brands. Not surprisingly, Byerly's unorthodox approach isn't limited to decor and merchandise. Gondolas, for instance, are at least a foot shorter than standard height." I know that shoppers like to see over the shelves," he says. And the traffic flow is such that it tends to prevent--rather than promote--shopping the entire store. "Loyal customers will know where everything is."

And what does the immediate future hold for Byerly? "We're currently looking at a location for a new store," he says, adding that he's not tied to any long-term growth strategy. "What I'd really like to do is open a convenience store someday, but there are some fundamental problems that would have to be overcome." For now, Byerly is content to reap the rewards of his current accomplishments.

But if you're getting the impression that he sounds ripe for a buyout, erase the thought. "I had an offer recently from a foreign company interested in acquiring Byerly's," he says. "I never even spoke to the man. What would I do?"
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Copyright 1985 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Profit Talks; Byerly's supermarkets
Author:Schaeffer, Larry
Publication:Progressive Grocer
Article Type:column
Date:Feb 1, 1985
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