Outstanding success using maverick methods.
Becomes Gourmet Grocer
After five years of toiling as a Certified Public Accountant, Marc Skaler decided to break his pencils and put on a grocer's apron, even though he had no experience working in a supermarket. When an independent grocer who Skaler did the books for began having trouble at his unit in Lafayette Hill, a wealthy Philadelphia suburb, Skaler put together a financing package and formulated a plan to turn the loser into a profit producer.
"I had never thought of becoming a grocer, but I did want to have my own business," says the 31-year-old Skaler, who opened Top Shelf Fine Foodery in October 1982. He believed the location had potential as a specialty grocery store instead of a conventional supermarket. Skaler asked for support from relatives, friends, business associates, and anyone else who could kick in a few dollars. To obtain money from conventional sources, he put up his home as collateral.
Then, he donned a grocer's apron and started stocking shelves. During the first week of business, sales were $30,000 at the 7,000-square-foot market. Volume now averages $65,000 per week and has topped $75,000. Due to the concentration of service departments, perishables and specialty foods, the net profit is considerably above the industry average.
"My accounting background taught me that you should make money on every product you sell," Skaler remarks. "I do not try to attract people who are driven by the desire to save a few pennies. My customers are primarily working couples. Convenience and quality are the reason they shop here, not price."
Since every penny that Skaler could scrounge up went into the purchasing of the stor, he had no capital to invest in remodeling. All improvements had to be funded by cash flow. "We did things gradually because of the financial situation. At first, we just remerchandised the store, putting in more specialty items. We also cleaned and polished the store, and did some inexpensive remodeling."
As the profits started to trickle in, Skaler invested them in the store, mainly by adding service departments. His plan was to install small shops within the store, where consumers could buy products such as quality deli goods, seafood and coffee beans. "We took every department one step at a time," he notes.
The service deli, which accounts for 9% of sales, has been one of the most successful additions. Working women are particularly fond of the barbecued chicken prepared on the rotisserie; the deli also cooks capons, ducks and spare ribs that shoppers can take home and eat. The department even cooks its own kosher corned beef, mast beef and turkey, which sells at a pricey $7.99 a pound. Skaler hopes to add a larger selection of hot foods to the mix in the near future.
The seafood counter, which takes in 3% of sales from a mere 8 feet of service case, has been another pleasing addition. Top Shelf usually has about 15 varieties of fresh fish on ice, and the seafood manager is always available to answer questions.
The other perishables departments are performing just as well as deli and seafood. Produce accounts for 12% of sales, and is a prime draw. Meat represents 19% of sales. Most of the beef sold is prime.
"This store is an extension of my personality," says Skaler. "As a grocer, I am free to do whatever I want. I did not have that freedom as an accountant. That makes me always try a little harder, because I can be rewarded for my efforts. Nothing is certain in this business, but that little bit of insecurity is what has made me successful and happy as an entrepreneur."
A Smoky Mountain Home
As assistant sales manager of Merchants Distributors, a large wholesaler based in Hickory, N.C., Jim Hamby saw almost every back road in North and South Carolina. Although he enjoyed visiting all the grocers, the constant traveling began to tire him. As he was rehinking his career choice, he fell in love with the Smoky Mountains in western North Carolina, and decided to settle there as an independent grocer.
"The Smokies have the most beautiful scenery I've ever seen," says Hamby, who operates Linville Foods in Linville, N.C., a town in the shadoe of Grandfather's Mountain. In 1973, Hamby purchased a 6,000-square-foot store owned by one of his accounts, and has been happily running the market for a decade. He has remodeled 10 times in 11 years.
The reason behind the rash of remodelings is that many others have also discovered the beauty of the Smokies. According to Hamby, the county where his store is located is one of the fastest growing in the Carolinas. As more people from the Southeast travel there for vacations, many are purchasing condominiums and other second homes in the vicinity of his store. One-acre lots in Elk River--about 10 miles away--sell for $100,000 to $115,000. That's just for the land; the house is extra.
As the upper-middle-class people from Atlanta, Winston-Salem and other communities across the Southland moved to the communities around Linville, Hamby upgraded Linville Foods to satisfy their needs. The present 12,000-square-foot store is a far cry from the original unit that Hamby purchased, which was more a general store than a supermarket, featuring clothing and shoes alongside meat and produce. Today, Linville Foods carries 100 different cheeses fresh seafood from the Carolina coast and more gourmet and specialty products than most supermarkets in the South.
"We had to do something extra to distinguish ourselves from other grocery stores," says Hamby. "We thought we could accomplish that by stressing quality in the perishables departments and selection in grocery. Our competitors are conventional supers. They have more space than we do, so we had to do something better instead of bigger."
Meat is a principal draw, having been expanded from 10 linear feet when Hamby acquired the store to 66 linear feet today. A butcher is always present in the summertime, when the market does most of its business. Volume at Linville Foods can triple in the summer, compared to November and April -- the slowest months. Year-round sales average about $70,000 a week.
The store pushes prime meat in summer, and also handles veal, lamb and other specialty meats. Hamby says, "We sell every cut of meat that we can buy and get delivered up here." During the summer, when golfers, fishermen and other outdoor enthusiasts descend on the store, the meat department sells a lot of thick steaks, kabobs, chicken parts and other meats suitable for outdoor grilling. Meat distribution runs as high as 30% during July, and drops to 25% in the winter.
Linville Foods brings in a full line of fresh seafood every Thursday, and sells it through the weekend. Fish and seafood products that are usually on display include flounder, grouper, red snapper, shrimp, oysters and scallops. In the past, Hamby drove 95 miles to Shelby, N.C., to purchase seafood, but has recently discovered a young man who drives to the coast, buys the fish and then trucks it to inland supermarkets.
Since many of the summer and winter settlers who come to the mountains do a lot of entertaining, Linville Foods offers a vast selection of imported and domestic cheese. The 12-foot specialty cheese case displays cheese cut in various sizes, ranging from whole wheels to small chunks. To further please the people who entertain, nearly one-third of the grocery shelving holds gourmet products.
The seasonal nature of the business necessitates some unusual operations procedures at Linville Foods. The most serious problem occurs toward the end of summer. Most of the students that Hamby hires leave around Aug. 15, but the tourist season is not over until Nov. 1. Since no people are available to replace the students, the full-timers must pitch in and work long hours. "Everybody does twice the work they normally do for two months, but I make it up to them during the slow periods," Hamby says.
The independent grocer also operates a restaurant called "Peppers" next door to the supermarket. Currently a combination deli and fast food establishment, Peppers will soon be transformed into a tablecloth restaurant. Hamby also plans to remodel his supermarket again in april. Its total size after this "last remodel" will be 14,000 square feet.
"My customers think that I get bored every April after the skiers leave," says Hamby, "but that's the only period when we have time to improve our store. With the growth of this area, I'm sure that we'll be getting more competition, so I must always make my super a little better."
Minnesota Super Succeeds
With Southern Foods
With Cub Foods, Byerly's, Red Owl, Rainbow Foods, Super Valu and other top-notch supers, Minneapolis offers consumers a mix of formats and a level of supermarketing well above most cities.
Along with these stores, Minneapolis also boasts one of the country's premier inner city stores--King's Supermarket, owned by LeRoy King.
"Despite all the stores that operate in Minneapolis, there were no supermarkets serving the black community after the riots in the 1960s," explains King, 49. "People who lived in the inner city had to travel three to five miles to shop at a store with a supermarket's selection."
The need for a store in the black community was so apparent that a redevelopment corporation vowed to build a supermarket. With financing provided by General Mills, the First Bank System and others, a package was put together to construct a shopping center in the inner city. King, who is black, was selected to run the store. His 15 years of experience with Red Owl, plus his commitment to providing a supermarket for inner city residents, made him an ideal selection.
The market was scheduled to open on Friday the 13th, back in May 1975. One week before the grand opening, some people slipped into the store and set it on fire. "The fire made me more determined to prove that a good supermarket could succeed in this neighborhood," King recalls.
King's Supermarket opened six weeks later, and has been prospering ever since. The 8,600-square-foot store does $1.2 million in annual volume, and supports 21 employees. But to King, the amount of business that the store generates is not as important as its contribution to the quality of life in his community.
"We are important to this community for many reasons," says King. "First, we provide a store that people can walk to; they do not need an automobile to shop here. We also offer a selection of food that appeals to blacks, selling products that used to be known as 'soul food.' No other store in this city operates with the black customer in mind."
"Black customers want food that is fresh," King continues. The grocer buys many products for the store from the South, where most Minneapolis blacks used to live. King is a native of Louisiana.
The grocer purchases sauage from Mississippi and Louisiana because his customers prefer the spicier taste of Southern sausage. He buys a greater selection of offal products than most supers. Even though he carries greens year-round, he makes a special effort to push collard greens, mustard greens, kale and other products during the holidays. He moved 150 cases of greens in the two days prior to Christmas.
King's grocery selection would be more appropriate in Alabama than in Minnesota. He sells dried black-eyed and crowder peas, cans of okra and sugar cane syrup.
Along with satisfying the needs of black consumers, King has also provided area residents with employment, helping to improve their personal financial situations. He has encouraged young people to pursue college and careers that may have been impossible if they had not found employment within the community.
King says, "A supermarket is the perfect environment for teaching the attributes that make a person successful in the world. A good employee learns to be punctual, to have respect for others, to be honest, hard-working and so on."
Many young people who have worked at king's have gone on to build lives for themselves that may not have been possible without the training they received working under King. Others have opted to make the community-oriented supermarket their career. Regardless of whether they are customers or employees, residents of Minneapolis' inner city have had their lives improved by King's store.
Slick Head Fred
Knocks 'Em Dead
The Hickerson Grocery, which sits on a town square behind the courthouse in Linden, Tenn., is a living testimony to a time when Main Street was more than a road to the strip shopping center. The store even has a canopy and chairs out front, and encourages the townfolk to sit and talk, or play a game of checkers.
"We try to be the friendliest place in twon," says Fred Hickerson, 52, who has done business in downtown Linden since 1948. The grocer complements the friendly atmosphere with a price-oriented advertising philosophy that appeals to the 1,200 citizens of Linden. This has helped build volume at the 8,100-square-foot store to an estimated $55,000 weekly.
"We advertise hot specials in the paper every week, and never have a purchase requirement or a quantity limit," Hickerson points out. "I don't limit quantities even when I have a loss leader. People like a store that doesn't have gimmicks." The feature items are promoted as Slick Head Fred's weekly specials.
Hickerson periodically advertises a "mystery" item by listing the sales price but not the product. These products will always be staples at a rock-bottom price, such as a box of Morton salt for 10 cents. "Peoeple always come to the store when I have a mystery item because they know it will be an incredible price on a product they can probably use," says Hickerson, whose store serves a county that ranks last in income level in Tennessee.
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|Date:||Mar 1, 1985|
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