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Progress: outstanding sales growth in the past 12 months.

The 35,000-square-foot upscale warehouse store that George A. Hunt of Ashland Wis., built in 1987 is a far cry from the first store his father opened in the community 63 years ago. In fact, it's also five times larger than Hunt's previous unit, and rings up a whopping 300% more in weekly sales.

The 53-year-old grocer, who dubbed his new store Economart, said the operation is a real family affair. He runs it with the help of his wife, Marge, and his children, Jeff, Holly, George and Carrie, as well as his son- in-law, James. The grocer himself joined the business, once operated by his father and brother, in 1968. Hunt, who is now the sole owner, said his children had a lot to do with his decision to undertake the ambitious-and expensivebuilding project.

"I had four offspring who attended college, went into other businesses out of town and then came home," he explained. "I love to have people around, and thought they should have the same opportunity I had. "

Despite the Hunts' years of supermarketing experience, it was no small task to go from a 7,000-foot conventional to an upscale warehouse operation, complete with service perimeter departments. Without his family, Hunt said, the project would not have been a success. "There was no way I could have opened without them," he said, pointing out that most of the relatives have put in 14-hour days this past year.

The store, located 20 blocks away from the former unit, is the fifth supermarket the family has built in the community, and cost $3 million to construct. It currently is the only unit Hunt runs. The grocer credited his wholesaler, Nash Finch, for helping to make the building project economically feasible. "Nash Finch gave us a financial opportunity to grow. We needed its financial direction and help," said Hunt. The grocer also secured some bank loans of his own to support the project.

The relocation and format change catapulted Hunt from last place to first in terms of market share in the community of 22,000 people, where he competes with two conventional independent operations. " We had always outsold the number one and number two people in sales per square foot," Hunt pointed out. He's also proud of the fact that he "outlasted" units operated by such chains as A&P and National Tea.

"We try to be all things to all people," said Hunt. His store has a warehouse-style core displaying discounted groceries, as well as an array of perimeter service departments including a scratch deli, a scratch bakery, a restaurant, two banquet rooms and a bar. (The last three areas are offshoots of Hunt's 10 years in the restaurant business.) The unit also has a large video rental area stocking 1,200 tapes. While Hunt is now in a leasing arrangement with an outside supplier, he plans to purchase his own inventory of videotapes to boost the department's profitability.

The independent today takes in between $180,000 and $250,000 a week. He said that he has "operated in the black" since the third quarter of the new store's first year. However, he admitted that the warehouse-style operation was not an instant hit with the community. At first, he said, residents were not pleased with the "packyour-own" policy, which subsequently has been changed. "After three months we put packers on-which was an expensive proposition-and we started to grow."

Hunt's operation has gone from a staff of 33 unionized workers at his former unit to 147 employees today, many of whom are non-union. His labor-to-sales ratio is 9 .7 % , plus benefits. His warehouse store now has more of a service orientation than it started out with, offering amenities such as bagging and carryout service to a driveup station.

"We're doing supernow," said Hunt. "The people of the area have supported us very well. And we have also worked very hard."-M.A.L.

Keeping up with the clientele

When Brett Barcelona took over Bells Market in downtown Buffalo, N.Y. , in the fall of 1986, it was an old, 20,000square-foot store that looked every bit its age. Today, after a multimillion dollar face lift, it has a whole new look. It's twice as large, sales are up 300%, and its perishables departments have gone upscale.

"This was a very conventional conventional store previously, a very '5Os operation, with a deli strictly selling cold cuts, for example. It needed a drastic remodel in order to be competitive in the market," recalled Barcelona.

The single-store operator described the downtown Buffalo area he operates in as serving a diverse clientele of various income levels, most notably yuppies from the nearby business district and the college crowd from two major universities.

Shortly after the independent took over the store and cleaned it up, the unit posted weekly sales of approximately $133,000. It currently boasts an average volume in the $300,000 range. "I feel it's come a long way," said Barcelona, 28, who is supplied by Peter J . Schmitt. Barcelona's father, Chuck, is president of the West Seneca, N.Y. -based wholesaler. The grocer credited the remodel-which began in January 1987 and was completed last September-for the store's sales increase. He said area residents had not previously enjoyed shopping at the store "because of its age."

In response to the criticism, Barcelona had the store gutted. The revamped unit contains a 20-foot addition, has a new floor, ceiling, compressors and other machinery. It also has been outlined with upscale refrigerated display cases. Barcelona added some service departments and increased the variety in existing perishables areas. For example, a scratch service bakery was installed, and the deli was expanded to include an army of service and self-service areas with a strong foodservice emphasis to cater to the nearby business community.

Barcelona said the deli now takes up 25 % of his store. It consists of a 36-foot service deli meat counter; a 16-foot service salad counter, displaying 20 varieties, half of which are storemade; a 24-foot self-service cheese house; a 16-foot selfservice pizza case; a 24-foot self-service case of heat-and-eat prepared foods; an 8-foot self-service sandwich bar, featuring New York-style deli sandwiches; and an 8-foot Chefs Corner. At the Chef s Comer, upscale entrees and roast meats, such as whole loins of pork, are displayed. The store employs three chefs to create these dishes in its institutional kitchen.

Other service areas that were added include a large seafood counter and an icepacked poultry counter, both of which are tied into the store's foodservice wall.

The young independent admitted that it will "take a while" to reach payback on his substantial remodel investment, but stressed that "gross margins are exactly where we wanted them, and sales are very encouraging. Our gross profit margin is 3 % to 4 % higher after the remodel than it was before. We had to increase gross margins because of the fixed costs, and had to alter our sales mix," said Barcelona. He pointed out that perishables areas, such as produce, deli and meats, have taken sales away from grocery,

Barcelona's customers seem pleased with the change. "We receive a lot of favorable comments," he said. "We're able to offer a larger variety to people, as well as a greater quality of product. Our customers realize this, time and time again."-M.A.L.

A move in the right direction

After 40 years in the same 10,000Asquare-foot store, Don Newsom of Don's IGA made the difficult decision to move his Big Spring, Texas-based operation five blocks away two years ago. As a result the grocer more than doubled his volume in 1987 and he enjoyed another 40% sales increase last year.

To achieve these impressive gains, the two-store operator, one of two independents in the four-chain town of 27,000, made some major investments. He initially undertook a $200,000 interior remodel of the 17,000-square-foot former Safeway in 1987. This entailed revamping the inside of the store to accommodate service departments, and expanding key perishables areas, such as produce.

Last year, the independent added another 5,000 square feet to the 25 -yearold unit and gave its exterior a complete facelift, at a cost of $268,000. The 1988 addition expanded the unit's front end and provided much needed space for displaying HBA items, gourmet foods, and beer and wines, Newsom said.

Before he took it over, the former Safeway had "reached bottom," taking in only $40,000 a week, said the grocer.

Thanks to the remodeling and a much stronger perishables and service orientation, the store now does approximately $165,000 a week, said Newsom.

He attributed much of his success to a strong emphasis on produce. Produce accounts for 15 % to 20 % of store sales, depending on the season. "We have a produce image," said Newsom, who contends that his offerings are fresher than those of his competitors. "We get sevenday-a-week delivery on our produce." The independent explained that much of it comes from his wholesaler, Fleming Cos., the local IGA distributor. The remainder is delivered directly to the store from the San Antonio produce market.

Besides being known for produce quality, Don's IGA also has a produce price image, according to its owner. "We work on a 30% margin for perishables, while most (nearby stores) are looking for 35 % to 40% , " he said. The grocer added that being independent also gives him a great deal of flexibility to take advantage of opportunities to "buy cheaper." For example, "We're always in the market for buying up truck wrecks," he said. "We bid on produce truck wrecks in the area, and last year there were 10 or 11 of them." In one instance, buying produce from a truck wreck enabled him to feature bell peppers at 10 for $1, while his competitors were all selling them for $1 a pound, he recalled.

The produce department also features a much greater selection than did the former Safeway unit, Newsom said. For example, the original remodel increased produce's refrigerated display space to 120 feet, from 40 feet before the revamping.

Other perishables areas that have helped the store move up in the world are the service deli/prepared foods operation and the self-service, bake-off bakery, which together account for 10 % of sales. During Thanksgiving week last year, these well-shopped departments moved 4,000 pounds of corn bread dressing, 2,000 pounds of cooked turkey, 110 gallons of giblet gravy and 3,000 pies, according to Newsom.

Also giving the operator a leg up on the competition are the many extra services his store offers, including catering; madeto-order fruit baskets; charge accounts; and delivery service to a nearby retirement home during inclement weather. "We're the most service-oriented store in the whole wide world," quipped Newsom.

He cited the quality of his employees and their personal approach to retailing as factors figuring prominently in his success. "Customers seem to be tired of being treated like a number."

If growth is any indication, the Texas independent is surely doing something right. He purchased a second unit in Lamesa, Texas, last July, and will be adding on a third store this year. -M. A. L.

Moving fast in Phoenix

At the ripe old age of 32, Phoenix groAcer Dean Miller is in command of a company that operates four Mega Foods warehouse stores that collectively ring up $90 million in annual sales. He has two more stores under construction and plans to have 12 stores in Phoenix and one in Flagstaff 18 months from now.

Miller came to Arizona after a stint working for his father, who owned and operated two conventional stores in Spokane, Wash. In Phoenix, Miller found a developer who had built a shopping center, but neglected to sign up the necessary number of tenants before starting construction. "He was in serious trouble," said Miller. "So he had to deal with a guy who didn't have 2 cents."

The developer provided funds to set up the supermarket in the center, and Miller was on his way. Since its establishment in January 1987, business has boomed.

Miller described the stores, measuring approximately 51,000 square feet, as upscale warehouses. Each has a delicatessen, bakery, tonfilaria and a strong perishables department.

As shoppers enter, they come upon a wall of values, followed by a delicatessen, which is set up as an island. Miller said he decided on this unusual setup for the deli because it keep sales people as sales people and preparation people as preparation people." Deli managers in the stores concentrate on hiring gregarious people to serve the customers, Miller said. Deli foods are prepared in a comer of the store, approximately 30 feet away, and then carried to the deli island.

The back wall of each store is taken up by the meat and dairy departments. Continuing along the perimeter, shoppers come to the frozen food section, then the tortillaria and, finally, the bakery.

The company employs more than 400 people. Personnel generally learn their jobs as they go along . "The secret is that department heads and management must be willing to do what's necessary to train and get the job done at the same time," said Miller.

The four stores operate in both lowerand upper-middle-class neighborhoods, Miller said. With quality perishables, the bakery and low grocery prices, "we can succeed in any area." The market is just right for the warehouse format, he said, "because it needs rooftops and families. All in all, Phoenix is a young, familyoriented place."

Sun City, a retirement community on the outskirts of the city, would not be a good location for one of his stores, Miller said"Older people buy less food, shop fewer times a week and have smaller transactions," he said. Furthermore, many of them are seasonal residents, living in the area no more than eight months out of the year. "The other four months I would suck wind."

Miller rarely advertises his stores, the exceptions being holidays. A couple of times monthly, bag stuffers are used 'just to qualify for vendors' allowances."

But Miller enjoyed free advertising of a kind when the local ABC -TV affiliate did a report comparing prices in various supermarkets in Phoenix. Miller said prices in his stores were found to be 10 % to 15 % lower than his competitors'. -S. B.

A need to grow

After 27 years of battling against a supermarket directly across the street, Gilbert and Lwana Barlbort finally won out. The competition packed up and Barlbort's Bellefontaine Market Place, St. Louis, moved from its 100-year-old building to the competitor's larger building, where sales doubled.

The Barlborts had been approached a number of times about buying the competing operation, which changed hands and formats three times while the Barlborts watched from across the road. Finally, about one year ago, they decided to take over the site when the third operator failed in his bid to run a small warehouse store.

"If I didn't take it over, somebody else would," said Barlbort. "Somebody could have come in and put a nice store in here." Barlbort decided he and his wife would do it first. Besides, he noted, "I needed to grow. I didn't want to put a lot more money into a 100- year-old building."

The original building had only 4,000 square feet of selling space and a parking lot only the most adventurous and steely nerved shoppers dared negotiate. "People literally almost took their lives in their hands trying to get into our parking lot," said Barlbort. 'Some of the older people, their reflexes aren't so good, they stopped coming to the old store."

The new location- with 10,000 square feet of selling area-is still not big, but it enables Barlbort to offer increased selection while maintaining the familiar atmosphere of a small, family operation.

"I can't express the warmth of our customers," said Barlbort. "Everybody says they're so happy we moved." Many shoppers who had stopped coming to the original stor "are back trading with us. It's just great." The customers' view the new site as just the right size, said Barlbort. "They're glad because we're not one of those monsters. There are people who don't like the big stores."

Barlbort is happy, too, especially at the doubling of sales to approximately $50,000 a week. Barlbort said he had expected that growth, however, and that his aim now is "just to keep working at it. Every week seems to get a little better."

The new location features a produce section more than 60 feet long, a 30-foot service deli and a 24-foot-long self-service meat case. In addition, there is a 20-foot smoked meat case. Dairy and frozen food sections also are substantial, compared with the old store, Barlbort said.

The original Barlbort's was established by Gilbert's grandfather in 1911. Family involvement stood the business in good stead through the years and continues to do so today, said Barlbort.

His daughter manages the front end and his son-in-law runs the meat department. His wife is in charge of produce"Years ago, our produce department was a weak area in the store, and she just decided she wanted to try it." Lwana regularly drives a truck to the wholesale warehouse district of St. Louis to buy produce.

Having family members in the key managing positions makes a big difference, Barlbort said. "They give you the extra hour, whereas anybody else we would have to pay." Of course, Barlbort noted, there is extra incentive for his daughter and son-in-law: "We've already told them the business will be theirs one day, so they do work that little bit harder at it."

Barlbort continued: "I'm kind of proud that the family has survived this long in this competitive market. It's not always been easy. We don't take many vacations. With a store our size I just feel the owner has to be on top of everything. I don't think it can just be turned over to somebody else."
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Title Annotation:outstanding independent supermarkets; Economart, Bells Market, Don's IGA, Mega Foods, and Bellefontaine Market Place
Author:Linsen, Mary Ann; Bennett, Stephen
Publication:Progressive Grocer
Article Type:company profile
Date:Mar 1, 1989
Previous Article:Dressed for success.
Next Article:Teamwork: extraordinary managerial skills or employee relations.

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