Outstanding achievement in the past 12 months.
In the Puget Sound region of the Pacific Northwest, water sports are popular leisure activities. Since the opening of the Bayview Marketplace on the tip of the peninsula in downtown Olympia, Wash., residents are even able to enjoy the waterfront when grocery shopping.
Ralph and Ken Stormans have operated a supermarket on their peninsula property since the early 1950s. They converted the site to a Mark-It Foods--one of the original warehouse store approaches--in 1971. The store was quite successful for several years, but sales began to drop. The Stormanses decided to sell the property and invest the proceeds into their other two supermarkets.
"The store had gone through the process of evolution, and we were to the point where we either had to remodel or sell," says Ken Stormans, 50. "Since the store is on the tip of the peninsula, with a beautiful view of the harbor and the mountains, it is a perfect place for an office building."
The independent attempted to sell the property to a bank, but the town fathers would not permit a multi-story building to be built on the site. Says Stormans, "We had let store conditions run down because we hoped to sell the property. When that was made impossible, we had to do something with the situation. So we decided to become the anchor for commercial development along the waterfront."
The city council of Olympia wanted to retain the natural feeling of the waterfront. The Stormanses decided to make their store central to that setting by remodeling it into a waterfront showpiece. They added 7,000 square feet and completely transformed the market's appearance and appeal.
"We changed the building's character to conform with the appearance of the waterfront by using pilings, wood that looks weatherbeaten, old ropes and other things that make the market look like a dock," says Stormans.
The independent even landscaped the parking lot to match the character of the area. A children's play area, complete with three simple rides, was also created. Here, a little seal that rocks back and forth has been one of the more popular outdoor attractions. In addition, a deck with benches was built behind the store, enabling people to sit down, relax and enjoy the view.
The interior was transformed as dramatically as the exterior. Explains Stormans, "To attract people into town to shop, we had to do something special. Since our Mark-It store was primarily a price operation, we made the new store into a quality place that stressed perishables. Downtown Olympia is going through a rebirth; a lot of young professionals work in town who patronize our store because we provide a food shopping experience they can't get in a suburban store."
Tyler Refrigeration's distributor in Seattle confronted the task of converting the grocers' ideas into a marketing and merchandising vehicle. The objective was to highlight the perishables in a setting the reflected the Bayview Marketplace's unique waterfront location. The remodeled store was christened in July 1984.
Positioned directly inside the front door, produce anchors the waterfront store. Fruits and vegetables are displayed on fixtures that look like ocean shipping crates. Rope, pilings and walls painted a worn gray complete the boat-like appearance of the produce department, which spans 2,500 square feet.
The service deli and bakeoff encompass 4,000 square feet, and even sport a sit-down eating area with a view of Puget Sound and the mountains. Located on the second floor, above the deli, and eatery can seat as many as 70. People take soup, sandwiches, doughnuts, coffee and hot foods there to enjoy the million-dollar view along with a $2 lunch. Stormans reports that the deli is packed from noon until 2 p.m., when workers from downtown Olympia patronize the section. Many return after work to buy meat, produce and groceries at the supermarket.
The Olympian grocers took a problem situation and transformed it into a positive development for the company and the community. "Sales have responded handsomely--this has been an excellent move for our company," says Stormans, keeping the store's volume close to his vest.
Georgia Grocer Goes
From Five to 14 Stores
Some industry pundits called 1984 "a year of merger mania" in the supermarket industry. Led by the American Stores-Jewel deal and the Fleming-United Grocers combination, it was a year of unprecedented activity on the merger and acquisition front.
The person most affected by merger and acquisition mania was Ron Gurley, a small-town grocer based in Harlem, Ga. Gurley's mini-empire expanded from five to 14 supers last year as he aggressively pursued his goal of adding more markets to his domain.
"I'm always on the lookout for opportunities," understates the 40-year-old Gurley. "I've built a reputation in the counties around Augusta as a businessman who always listens to a proposition." All of the stores that Gurley acquired were originally owned by other independents, who contacted him to see whether he was interested in buying their businesses.
Gurley likes to operate small conventional supers similar to the Harlem unit. His stores range from 9,000 square feet to 15,000 square feet, and serve either a small town or a neighborhood within a larger town. Most are within 100 miles of Augusta, Ga., which serves as the focal point for Gurley's operations. (Gurley's father, four brothers and two brothers-in-law also operate grocery stores that do business under the Gurley's name. The family advertises and buys together to create the impression of a small chain, but the profit and loss statements and ownership are totally separate.)
The independent's acquisition binge began in January, when he purchased five stores that had been doing business as Jerry's Red & White. (The other side of the family purchased six other Jerry's units.) The purchase prompted stories in the local media, which created heightened awareness of Ron Gurley and his desire to expand.
"As soon as the news of the acquisition broke, I began to get calls from other independents who wanted to sell their stores," says Gurley. He adds that none of the stores were profitable, but that they all had potential.
"Each of the supermarkets I bought was in a small community or a neighborhood almost identical to the merketing areas where I had been successful. But the stores were tired. When a grocer loses the desire to operate his business, conditions rapidly deteriorate and customers start to shop elsewhere. I have no more natural ability than the people who sold me the stores, but I am more aggressive," says Gurley.
Since buying the stores tied up Gurley's capital, he was unable to spend much to redo any of the markets. He simply remerchandised the stores, adding more inventory to offer shoppers a better product mix. He also instituted a business plan that permits him to make a profit.
Before becoming an independent, Gurley spent two years working for Winn-Dixie. "My expensive with Winn-Dixie taught me discipline. But even more than that, it taught me that it is all right to earn a healthy profit," says Gurley, who believes that chains often run supermarkets better than independents.
Gurley attributes much of his company's success to Grand Union, which closed its Columbia, S.C., division in 1980. "We didn't pick up many extra sales when Grand Union closed its Big Star stores, but we did pick up a lot of its managerial talent. The biggest single event that led to my growth was Grand Union's closing and the pool of grocery talent it made available. I would never have acquired this many stores if I did not have that talent in my organization," Gurley says.
His only disappointment about his rapid growth is that he trends it increasingly difficult to spend time in the stores. Gurley now directs a headquarters staff of nine; his company employs 300 people, compared with 75 one year ago.
After a year filled with more activity than most grocers encounter in a lifetime, Gurley might be expected to take it easy in 1985. No way, says the independent, who plans to open two new stores this year, and is also in the midst of two remodelings. "Both my banker and I hope this will be a good year for Gurley's Supermarkets," he says.
Piggly Wiggly Goes Home
Fifty years ago, Mike Baker's grandfather opened a grocery store in midtown Memphis, then a bustling commercial entity due to the presence of the mighty Mississippi River. On Halloween Day 1984, Baker returned the family business to midtown Memphis, bringing back the Piggly Wiggly name, which had not been used in its birthplace for many years.
Coined by Clarence Saunders, the late originator of self-service, Piggly Wiggly was the name of the first store that permitted people to pick products up from grocery shelves. The concept was so incredibly successful that Piggly Wigglys soon stood on almost every street corner. But after several years, Saunders ran into financial difficulties. Although Piggly Wiggly prospered in other parts of the country, the name disappeared from Memphis.
Last year, a combination of events brought Piggly Wiggly back in a form that even Saunders would not have imagined. Malone & Hyde, Baker's wholesaler, purchased the franchise rights to Piggly Wiggly. At about the same time, the five-unit Montesi company sold its high-volume supermarkets to pursue other interests.
Baker purchased Montesi's midtown store, located about four miles east of the Mississippi. He says, "When we studied the demographics of the area, we saw both a challenge and an opportunity. The demographics showed somewhat of a paradox -- a neighborhood with both young and old, rich and poor, black and white.
"Yet within all the diverse groups, a trend toward a rising level of income was evident. We decided to make the store more upscale than it had been as a Montesi unit but to still keep it simple enough so that all segments of our potential customer base would feel comfortable."
Baker solicited the services of Malone & Hyde's store development team, which had just completed the design of Mega-market, the wholesaler's super warehouse store. The independent, who operates five Big Star stores as well as the Piggly Wiggly, borrowed some ideas from Mega-market, and others from Dierberg's, Schnuck's, Fiesta, and other operators.
Although the 68,000-square-foot building shell remained intact, Baker was able to increase the selling area by more than 25%, to 42,000 square feet. "We needed the extra footage to make this an exciting place to shop. The Piggly Wiggly name and concept lends itself to people having a good time," says the 35-year-old Baker.
Baker offers the service fish department as an example of his theory of making the store a fun experience. The service fish case features 30 items, all merchandised on ice. But the real excitement comes from the lobster and catfish tanks positioned next to the service case on a platform that makes them highly visible. The store has been selling so much catfish that it has problems keeping the tank filled.
Instead of just keeping the exciting departments around the perimeter, Baker decided to create an area of activity in the center of the store. About 220 bulk food items are displayed toward the front of the center; an international food section is near the bulk foods.
The floral section adds to the active feeling of the Piggly Wiggly's mid-section. Complete with a working fountain and a Southern-style gazebo adorned with hanging plants, the floral department draws many shoppers who had no thoughts of purchasing plants.
One of the most unusual and exciting features of the store is the diamond-shaped end displays. A platform was built on each of the 18 endcaps making it obvious that the products on the end are different than those on the grocery gondolas. Although the diamond shape requires that the endcaps be hand-stacked, Baker believes that the massive look of the displays is worth the extra labor cost. He says the endcaps are changed weekly.
"Excitement means more than just having a pretty store," adds Baker. "It means that there should always be something new happening."
Baker believes that his investment of $850,000 has created a store that will perform exceptionally well. His proximity to the main office of Malone & Hyde is a plus because of the wholesaler's commitment to its Piggly Wiggly franchises, and its expertise in superstores. By next fall, Baker expects his reborn store to consistently top $400,000 in weekly sales. Clarence Saunders would have approved.
Boosts Sales Sevenfold
When Bob Gardner became the store manager of the A&P in Norwalk, Ohio, in 1973, volume at the market hovered around $30,000. During his six years of managing the store, he built weekly volume to $100,000, making his market one of the best in the Cleveland division. Since he acquired the store in 1979, sales have skyrocketed even further, to well over $200,000 weekly.
"I was a career man with A&P until fate made me an independent grocer," says Gardner, who worked for A&P for 31 years before losing his job when the then-struggling chain closed its Cleveland division. "I was never eager to own a supermarket, and had some hesitation when Cardinal Foods approached me about this store. My hindsight tells me that I should have become an independent grocer many years ago, but I liked the security of working for a major chain."
Gardner lost his security when A&P retreated from northern Ohio. Although he had already stepped down as supervisor of the Cleveland territory to become a store manager in Norwalk, that reassignment was nothing compared to potential unemployment. Then, Cardinal Foods, a Columbus, Ohio-based wholesaler, called to see if he would be interested in buying the store he had managed. After half a dozen phone calls, Gardner traveled to Columbus to listen to their proposal. The partnership plan was acceptable, so the A&P career man was reborn as an independent grocer.
"I made money here despite all the restrictions imposed by A&P, so I knew that I could do well when given free rein," remarks Gardner. His first act was to upgrade service levels, particularly on the front end. "At A&P, I was told what I could spend for labor, and then tried to operate the store under those directives. Now, I have the freedom to let the amount of business that we do determine how many employees we have."
Gardner believes that the business basics he learned with A&P are the underlying reason he has been successful. "A&P had some problems but, overall, it was a fine company that ran good supermarkets. It stressed clean, well-stocked stores with quality products and courteous employees. I built on those strengths, and instituted some improvements and programs that showed that we were better than a standard A&P," Gardner says.
The independent remodeled, expanding from 15,000 to 20,000 square feet. Produce was moved to first place in the traffic flow; meat was remerchandised in a four-deck instead of a well-type case; two grocery aisles and two checkstands were added. The walls were covered with plywood, and new department signage was hung. As Gardner says, "We did a lot of touching up to make the store appear nice and new. It doesn't look at all like an old A&P."
Along with remodeling, Gardner also altered the advertising and promotional side of his operation. He distributes a circular every week; A&P only did that occasionally. The local merchant also instituted a Golden Buckeye program, giving a 5% discount to senior citizens every day of the week.
In five years, Gardner has built a buisness that supports him, his wife, two sons and two daughters-in-law. He has secured himself a comfortable future, and given his offspring a business to develop. "We are looking to buy another store because my children want lifelong careers in the grocery business," adds Gardner.
Remodeling Boosts Sales
At Buffalo Bells
One businessman's misery can be another's fortune. Bells APOG in Lockport, N.Y., a suburb of Buffalo, boasted a sales gain of 18% in 1984, but only because the fabric shop next door went out of business, providing space for expansion.
"We knew than we could increase our business if we had more room," says Sal Gaglione, who owns the company along with his uncle, Sal Jr., and his father, Joe, who are A Pair of Gagliones (APOG). "There were lots of things we wanted to do, but we simply did not have the room," continues the young Gaglione.
As soon as the storefront next door became available, the Gagliones huddled with the store development department of the Peter J. Schmitt Co., their wholesaler, to plan a 4,000-square-foot addition.
When planning the remodeling, the Gagliones considered consumers looking for freshness and convenience in the perishables departments--those interested in a supermarket offering more than meat and potatoes fare. They wanted to position the store to appeal to young consumers, working couples, singles, and other demographic segments whose desires are not fully satisfied by conventional supers.
Since the store had no bakery, and its primary competitor, Topps, had an extensive one, a scratch operation was positioned along the left wall of the remodeled store, immediately after produce. The store manufactures its own doughnuts, cakes, breads, rolls and other baked goods. From a zero starting point, bakery has progressed to 1.5% of sales since the remodeled store was completed in November 1983.
Deli is operated as a separate department, unlike the deli-bake sections common in Bells stores. To satisfy shoppers who want something to eat as soon as they arrive home, hot foods were added to the mix. Items such as spicy chicken wings (a Buffalo favorite), onion rings, barbecued chicken and other products are now sold for immediate consumption. Two items are featured daily. On a recent cold January day, hot roast beef sandwiches and Polish sausage with sauerkraut were being promoted.
To complement the hot food and deli offerings, a soup and salad bar was positioned near the deli. A tray from the 36-item salad bar was originally priced at $2.29 a pound, but that proved too expendsive. Salad is now sold by the container rather than by the pound, with the smallest serving retailing for 99 cents.
To warm people during the cold Buffalo winters, the Gagliones recently added hot soup, priced at 79 cents for a small bowl and $1.39 for a large container. Two soups are available every day, and the variety is changed daily so there is always something different. During the soups' trial week, 35 crocks were sold. "We tried absolutely anything that had a possibility of working," says Gaglione. "If it doesn't work, we can always take it out."
Encouraged by the sales of the 80-item bulk food section prior to the remodeling, the Gagliones expanded bulk foods to 310 items, one of the largest selections in metropolitan Buffalo. Pet foods, spices, gourmet candies and other categories were added, and are displayed in tamper-proof gravity-fed bins. Bulk foods now account for 3.5% of sales, compared to 2% before the remodeling. A selection of natural foods merchandised alongside bulk food did not perform well, and were removed.
All the new and improved departments are highlighted by photo murals, block style lettering, and other decor touches that have made the Bells stores distinctive in their marketing area. The decor package, the new mix of products geared toward a younger clientele, and the skill of the Gagliones have all helped this New York independent achieve a sales increase greater than expected, to approximately $260,000 a week.
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|Title Annotation:||includes articles on related topics; grocery trade|
|Date:||Mar 1, 1985|
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