Skip to main content

COVER STORY: Different by design

Looking for smart new store design ideas? Scout out the local independents. That might not be a chain retailer's first recourse, given that independents have generally been known for excelling at function more than fashion. But with more than a little help from their wholesalers, some independents are using elegant strategies in design and decor to give their chain competition a run for its money.

While the original "neighborhood markets" are often heralded for offering great service and deeply connecting with their communities, the average independent hasn't offered much in the way of design, beyond basic pastels. But as the going has gotten tough, the tough have gotten creative. Some of the nation's leading wholesalers are helping their independent customers wield design elements as competitive weapons, to highlight the retailers' points of differentiation, whether those are perishables, low prices, or simply their rapport with the communities in which they operate.

The wholesalers leading the way include Supervalu, Associated Wholesale Grocers (AWG), Associated Food Stores, and Fresh Brands. Their strategy is to provide their retail customers design services on a par with big-city agencies, but on more economical terms. Can it be done? The evidence is in the gorgeous natural lighting, the expressive signage, and the latest in fixtures and flooring that wait behind many of their independents' doors.

As these wholesalers see it, nimble independents are gaining an edge on the big chains when it comes to design. "A big chain tries to be all things to all people," notes John Domino, v.p. of real estate design and construction at Minneapolis-based Supervalu, Inc. "Independents are closer to their neighborhoods. They aren't tied to a prototype or rigid planograms." Domino is also managing director of Design Services Group, a design division of the wholesaler that works with outside companies, including foodservice operators.

Design will be a major competitive force going forward for independents, asserts Steve Reich, v.p. of marketing at Associated Food Stores in Salt Lake City. "You look across America today and see the same stores in different cities," explains Reich, "but people want a local feel on their own streets. Independents have the ability to customize by community, and build around that image."

Ultimately, the driving force behind any successful retail design is really good merchandising, and that's where today's leading independents excel. "As good as our design people are, they only have limited input and influence on the store. It's really the merchandising vision of the operator that makes the store successful or not," acknowledges Supervalu's Domino.

Indeed, smart design and the merchandising skill to go with it are keys to withstanding mounting competition, says Scott Wilmoski, s.v.p. of real estate and store engineering at Kansas City, Kan.-based AWG. "That's why they've survived, even with all the square footage that's been added in the marketplace. Design is important because it allows the retailer's strengths to be embellished in the consumer's mind. So if an operator has an excellent meat reputation, for example, we can communicate that in the surroundings he's in, through decor."

Freshening up sushi

Take, for example, the unusual sushi department AWG is creating for a remodeled Sun Fresh Market located, ironically, in an upscale neighborhood of greater Kansas City, Mo., the heart of beef country.

The store has already built a reputation for great sushi, so AWG's designers are playing up that strength by incorporating a bamboo kiosk for the sushi station, accented by a huge inverted Oriental umbrella and eight 25-foot chopsticks made of black lacquer. "Sales are going to go through the roof once the store reopens," predicts Wilmoski.

Sales have certainly been good at Cosentino's Market in Brookside, another AWG customer and a store that Progressive Grocer profiled as a Store of the Month earlier this year. Through cutting-edge decor, AWG's design group, which is officially known as DSG (Design Services Group), accomplished a lot in the 20,000-square-foot space, highlighting the store's high-quality perishables departments and creating a welcoming atmosphere for time-starved shoppers.

"A lot of the design at Cosentino's in Brookside was based on people who have less and less downtime," explains Lori Quick, director of design and decor for DSG. "We wanted to help customers relax and get a sense of unhurried downtime. We used a lot of materials that you'd find in home -- molding, plaster, and other comfort materials."

It's not just the upscale areas that are getting such special treatment, however. Price-focused formats that cater to increasingly blue-collar demographics are being made over, too, with fun decor that doesn't stray from the value-based premise. AWG is modernizing its 40-plus Kansas City-area Price Chopper stores, for example, with quirky design touches such as a giant fork hanging near the salad bar.

The stores, which average 75,000 square feet, were originally created as warehouse formats. "We've taken the price-driven format, kept it as much of a warehouse setting as we could, and accented the outstanding produce, fish, bakery, and pickup service, so you have customer service, as well as quality perishables, still under the price-driven format," says Wilmoski.

The larger frozen departments in the new Price Choppers feature more thoughtful signage with a bit of personality, notes DSG's Quick. "Instead of saying 'frozen food,' the signage displays more consumer-friendly messages, like 'So many meals, so little time,' 'Time flies,' and 'Grab some time.'"

Supervalu has taken a similar approach with its new Bigg's, a store that recently opened in the upscale Hyde Park neighborhood, near Cincinnati. "They still wanted to be known for price and value, but wanted to upgrade their perishables and better cater to the neighborhood," says Domino. "By enhancing the perishables yet keeping a focus on grocery and price, and playing with the colors to warm the store up a bit, we were achieved a nice balance of high-quality food and affordable price."

Sheboygan, Wis.-based Fresh Brands, which services 75 independents that operate under the low-price Piggly Wiggly banner, has likewise ramped up interior decor packages by incorporating breathtaking skylights, distinctive signage, wavy soffits (the exposed underside of an overhead component such as an arch), and other curves in some of its new and remodeled stores, including two units in the more high-end neighborhoods of Hartland and Oconomowoc, Wis. The design is "elegant without being pretentious," notes Karla Krueger, corporate store designer at Fresh Brands. "We don't want to intimidate the customer and make them think they're paying extra for splash."

Each retailer is unique in one way or another, says Krueger, and store design ought to reflect that. "Our company has always encouraged independents to develop their own identity. We've never had a cookie-cutter format. Today competition is getting stiff, and the independents have figured out that they have to sell their individuality," she notes.

In rural markets, too, where communities tend to have distinct but less showy personalities, AWG's design group has come up with some suitably creative ideas. For example, in Branson, Mo., the nation's No. 1 tour-bus destination, AWG's Country Mart banner features a decor package with country & western banjos and guitars, cowboy boots, and other down-home touches.

"We don't have one strategy for all our retailers. We have many, depending on demographics and which competitors are in the market," explains Quick. "Design helps tell their story."

Keeping pace with change

While independents often know their neighborhoods better than anyone else, today's rapidly changing demographics can make it difficult to keep that knowledge fresh.

To address the challenge, Associated Food Stores is using GIS (geographic information system) technology, which analyzes data from a specific geographic perspective, providing insight into how to make sure a retailer's design and merchandising strategies fit a particular neighborhood.

"We've always done consumer research in working with our retailers," says Lenny Sperry, Associated Food Stores' director of retail operations. "With the GIS tie-in, we've expanded this service. We can tell within a 2.5-mile radius what the demographics look like, as well as other information, like who the competitors are."

The data is proving to be invaluable as Associated Food Stores helps its independent members revamp to address their changing markets. "In the independent market in general, there's a trend to appeal to older consumers, and the decor has been rather drab," says Sperry. "There are opportunities to reach younger dual-income married couples, many of whom are moving into outlying areas away from city centers. But if you want to reach a younger crowd, you'd better liven up your decor and do away with the pastel stripes."

Bountiful, Utah is one such market in the throes of change. One of Associated's customers, Winegars, has served consumers there for decades, but more recently was blowing opportunities to reach newer residents. The store had had a negative sales curve for several years.

"We took the segmentation process to the full extent with Winegars," explains Sperry. "We determined who the customer was and addressed all stages of merchandising. There were a lot of younger people moving into the base of this community, which is up on a mountain. We had to address them, as well as the upper-income residents who lived on the mountain.

"We moved the aisles to a vertical layout and put produce up front. We added 32 feet of full-service meat case. We gave it a new ceiling and floor. The outside was totally changed, too, including rearranging the parking lot," says Sperry.

Now, thanks to the redesign, Winegars is experiencing 20 percent sales increases in the store, he says.

Associated also applied GIS to Lins Market Place in Cedar City, Utah, which is owned by a well-known local family, the Ortons. Located in a homey college town, the store needed an update to appeal to its transient young clientele, but also to entice a growing subsegment of younger permanent residents.

"There were people who had lived there their whole lives, but also these new residents who were attracted to the small-town environment," says Reich. "So we decided to make the store look retro and name the departments [after] certain aspects of the community. We branded meat as Lin Orton's Meat Market and put in a picture of cowboys standing with horses. We named the cafe Red Rock Cafe after the red rock found in the area. And we made the dairy decor look like an old-fashioned barn."

The store has since seen huge increases in sales, gaining a better footing against competitors that include Wal-Mart, Albertsons, and Kroger, according to Sperry.

What price vision?

While updated decor is directly linked to better sales, as these examples show, independents can be a little jittery when it comes to cost. But wholesalers inherently have certain advantages when it comes to budgeting, the designers note.

AWG's Wilmoski says his company, which is a cooperative owned by its independent members, is able to cut costs by keeping its manufacturing and design services in-house. "There's no way an independent retailer could hire this type of talent on their own. The fee for travel just to investigate a store would probably be equivalent to the cost we charge for the entire design package," he points out.

AWG can work with virtually any budget, adds Quick. "We use a lot of techniques. We can use basic building materials and pursue a design that's cost-effective."

Likewise, Associated Food Stores' Reich says his company designs the majority of its decor in-house and negotiates with its retail members.

Cost is certainly a factor if it gets passed on to shoppers, adds Fresh Brands' Krueger. "We can't overestimate how important design is and then make the retailer's costs so high that they have to raise prices. It's a sacred cow. If you lose your image of value, it takes a long time to get it back."

Sometimes it's the less expensive, subtler accents, such as adding a butcher-block table or a set of nesting tables to merchandise cheese, crackers, and wine, that make a difference in a store's atmosphere, Supervalu's Domino notes. "I think independents are only limited by their creativity and overall vision for their company."

Another restriction independents often cite is store square footage. But Quick views space constraints as a challenge -- and often an opportunity to experiment with creative concepts. "Every time a challenge like that comes up, we anticipate we'll get excellent results. We're problem solvers."

Domino concurs. "A lot of times retailers are limited by the fact that they feel the need to have large grocery departments. When we suggest that they cut back on grocery shelving to create more open and specialty merchandising space, most of them say they would like to, but they're already short on shelving. To truly differentiate themselves, however, they should consider cutting down on total SKUs and focusing more on merchandising with unique items," he says.

Don't try using the size excuse on Associated Food Stores' Sperry. His group took a 6,000-square-foot market in the mountainside community of Panguitch, Utah, and made space for sizable meat, produce, dairy, and frozen departments.

"This was a store that nobody wanted, but a store manager decided to buy it. It's in the middle of a national park, so people [nearby] were used to driving [farther away] to get groceries," says Sperry. Now they don't have to go far for fresh food; the store's remodel has significantly increased perishables volume, he notes. Called Joe's Main Street Market, the little store is becoming a pillar in the community. Although much of its business is seasonal, it's holding double-digit increases even in the off-season, he notes.

Panguitch, Utah? Sounds like it just might be worth adding to your scouting list.
This ad will auto-close in 10 seconds