When it comes to new grocery concepts, there’s plenty of elements in the new Giant store on North 23rd Street in Philadelphia that take your breath away, from the produce department featuring unique items such as gift-wrapped pink pineapples, to the bakery case full of fruity pastry from a local patisserie, to the fresh-churned gelato near a breezy outdoor terrace. But for Giant Co. President and CEO Nick Bertram, the most beautiful feature of his new 65,000-square-foot urban flagship just might be the employee break room.
“You’ve never seen a break room like this,” says Bertram, sitting proudly among smiling employees for an exclusive interview with Progressive Grocer on grand-opening day in March. “It makes me happy to see our team smiling. They’re the heartbeat of this thing. It’s a beautiful store. It’s great products, but most of all, we wanted them to have this.”
The break room is truly spectacular, with a floor-to-ceiling glass wall offering employees grabbing a snack gorgeous views of the Schuylkill River flowing through the Logan Square neighborhood of Center City Philadelphia. For those workers who’d rather watch TV, flatscreens streaming the in-house TV network, GTV (launched internally two years ago), are also available.
The big break room with beautiful views at the Riverwalk store is just one of the ways that the new store brings to life the Giant Co.’s self-described “modern, fun and caring culture,” which made the new Philadelphia format possible.
“Our 98-year heritage has been an amazing foundation to build on, and we have proudly evolved into a purpose-led organization,” Bertram says. “Connecting families for a better future is what unifies us, what challenges us, and what guides all of our strategic, commercial and talent ambitions. It led us to our brand promise, designed for the way families live now, which is what shows up in our employee and customer value propositions.”
The value proposition for Carlisle, Pa.-based Giant which operates 187 stores in the Mid-Atlantic region under the Giant, Martin’s, Giant Heirloom Market, Giant Direct and Martin’s Direct banners, has been evolving quickly since at least 2019. That’s when the company began experimenting with smaller formats in Philadelphia. That’s also when the grocer launched its new e-commerce brands, Giant Direct and Martin’s Direct, offering grocery pickup and delivery.
In early 2020, the company changed its name from Giant Food Stores to The Giant Co. as it looked to distinguish itself from sister chain Giant Food, based in Landover, Md. (both chains are operated by Dutch firm Ahold Delhaize USA, which last year had annual sales of $88 billion). A few months later, Giant rolled out a new strategy and brand platform: For Today’s Table. Building on the new company name, For Today’s Table mapped out a course for the company’s growth.
“For Today’s Table is grounded in our strong belief that gathering around the table for a meal with your family to make meaningful connections is now more important than ever,” Bertram explained at the time.
Since then, the pace of change at Giant has only accelerated. The grocer has expanded e-commerce services, pushed into new merchandise categories, overhauled its store design, and implemented technology ranging from mobile pay to robots. According to Bertram, Giant’s latest store concept in Philly is a showcase of the next evolution of the retailer’s operational strategy.
“The beauty of this store is that it has brought category innovation, technology innovation and operational innovation,” he says.
When it comes to inspiration for the new format, Bertram says that his team visited chains such as H-E-B’s Central Market, Mariano’s, Publix, and even the flagship Whole Foods Market in Austin, Texas, for ideas. The team also looked at its own customers and teams through various research groups and weekly visits. Giant borrowed from some of its strongest formats in the suburbs and rural areas as well.
“We brought those elements in, but then added innovation on the format side, on the technology side, on the operational efficiency side, on the product side,” Bertram explains. “And then we really just wanted this to be a space to be, to dwell; it’s a spot now. Somebody’s going to get married out on the terrace one day.”
Finally, the grocer leveraged the resources available to it from it from Ahold Delhaize.
“We look to our sister companies in Ahold Delhaize USA, to our sister brands in Europe and Indonesia, and, of course, stay abreast of emerging technology and innovation through industry share groups like FMI,” Betram notes.
He believes that the format will work well in urban areas, but there are elements from this store that he can see being implemented in non-urban stores. For example, the store features a one-way checkout lane similar to those seen at off-price stores. It also offers self-scanning, mobile checkout, electric vehicle charging, a VIP elevator for residents who live in apartments above the store, and a 450-SKU plant-based set.
“First time we ever did that was at our first Giant Heirloom Market,” Bertram recounts. “We were overwhelmed with the response. So we took that and we applied it across dozens, if not 100, stores in our company, as we did remodels. And now that particular department is growing. This set is the biggest that we’ve ever done.”
The Giant team spent a lot of time mulling the perfect spot in the store for plant-based SKUs. That department is now on the perimeter, where it flows naturally from produce to the meat department.
The new format also boasts one of the largest produce departments in the chain, according to David Lessard, VP of fresh merchandising for Giant.
“We’re labeling them Garden,” Lessard observes, “and obviously, we have a focus on local. Even when we’re not in season, we still have over 60 local items because of our relationships with local farms and growers.”
Lessard points out that Giant’s new Garden department is set up by zone.
“This is our local zone,” Lessard notes as he leads a tour of the store’s departments. “We have an organic zone, with more than 170 items. And local is not seasonal: It is year-long, or a 52-week program. You’ll see it in produce, in floral -- throughout the store.”
At Giant, product is the hero, Lessard emphasizes, and that’s what the grocer tries to highlight. At the new Philly store, the merchandising team, made up of Lessard; John Ruane, SVP of omnichannel merchandising; and Rebecca Lupfer, VP of center store merchandising, detail the company’s “discovery program.”
“It's really creating that treasure hunt for our customers,” Ruane says. “So you see the Sumo oranges over there, pink pineapples here.” The pink pineapples are from Del Monte and come in a pink gift box with a bow; Giant was the first grocer on the East Coast to stock these.
“You’ll see white strawberries here, Aloha peppers over there,” Ruane continues. The Florida-grown white strawberries taste like a cross between a strawberry and a pineapple.
“Our teams really, really work hard with our suppliers and growers to try to find the best varieties out there, the most unique items for discovery,” Lessard adds. “We want people to see things that they haven't seen.”
The produce department also offers a value-added program with fruit cut in-store, a gelato bar, store-made guacamole and a kombucha tap. Finally, sustainability is always top of mind when it comes to produce.
“What we have done is where we have packaged produce, we’ve looked for ways to eliminate a lot of the packaging,” Lessard says. “Biodegradable trays, less plastic. We’re always looking, as part of the category teams working with the suppliers, to stretch it to the next step.”
Sushi by the Piece
When Giant looked at how to do foodservice at the new format, the team wanted to create a food hall experience, and that’s exactly what they ended up with. The foodservice stations don’t seem like parts of a grocery store: Each eatery feels like its own space, or part of a hip food hall, albeit with high-tech touchscreen ordering.
Giant’s catering to shoppers’ love of local products is especially felt here, where Philly faves Mission Taqueria and Saladworks have spots. There are also made-to-order hoagies (heroes or subs to non-Philadelphians), pizza, and sushi by the piece, something no other grocer on the East Coast offers.
“If sushi by the piece works here, then we will put it in our other stores that have the same demographics,” Bertram says, “but sushi is on fire across the whole company.”
There’s also a smokehouse, with smoked meats such as ribs and brisket offered daily. “We’ll have it in probably at least 10 stores in a couple months,” Lessard predicts. “It’s a really great growth category for us.” Giant also recently reopened its hot foodservice bars, after customers asked for them despite ongoing pandemic worries.
Then there are the beer garden and pub, with more than 40 varieties of beer and wine on tap. After grabbing a meal and a beverage, shoppers can head out to an open-air terrace overlooking the Schuylkill to linger by a fire pit.
The local Philly flair is felt strongly at Giant’s new store, and that isn’t something exclusive just to the store, or even to the city or the region’s Giant locations. Emphasizing local is an aggressive company strategy.
Locally made products can be found in every department of this new format, from One Village Coffee to High Street on Market bread to Caputo Brothers Creamery cheese. In the bakery, shoppers can buy Italian pastries made locally (not in-store).
“We’ve spent a lot of time in the last three years really focusing on local and making sure that what we get in every store is not just demographics and what people want locally,” Ruane explains. “It’s not just Philadelphians or urban dwellers who want local. Everybody wants it. We have a business meeting every year with 500-plus local suppliers to talk about our strategy and where we’re going and what our goals are with local.”
This local flair also extends to the center store, where Giant has introduced curated destinations.
“We have also spent a lot of time focusing on how we curate the right assortments,” Ruane says. “We also spent a lot of time in the international aisle. It doesn’t seem big, but it’s extremely important to our customers. It’s Kosher, it’s ethnic. So it’s really saying, ‘Hey, who are the people in the community and what do they want?’”
Additionally, Giant has created destinations in the center store that speak to the hottest consumer trends, such as natural foods and natural beauty. The natural food and organic department is adjacent to the produce department, so there’s an easy transition there for the shopper. There are also such new company features as natural lighting and lower shelving.
“We have lighted shelving in natural and organic and health and beauty because we’re trying to highlight and showcase those sections as stores within a store,” Lupfer says. “Lower gondolas, lighting — all of that really makes it feel like you’re shopping a natural foods store.”
Localizing Private Brands
According to the merchandising team, Giant is only at the beginning of its private-brand strategy. With a more aggressive focus on local, Ruane says that the retailer aims to use more local suppliers for its private brands.
“We are evolving with our private-brand strategy,” he continues. “It is very important to us. I would think that right now, we are doing a good job, but I think we aspire to do a great job.”
And that means a few things, Ruane points out, among them leveraging the company’s scale.
“We have a lot of stores in the organization, and we have to make sure we’re aligning on the right products, the right product specifications and getting all that correct,” he says. “That’s kind of a work in progress. As we evolve, we’re really looking to innovate more than we have. We have some really good innovation, but we want to do more of that. We really want to do more around meals. We also want to be able to provide a very good value for the customer, so when they come in and they see our label, they know they’re going to get the same great quality as the national brand or better, at a much better price every day.”
Transforming the Business
As for what’s next for Giant, Bertram says that he’s focused on supply chain, IT upgrades and e-commerce.
During the pandemic, “our weakness has been supply chain,” he admits. “We’re in the middle of bringing back our supply chain at Ahold Delhaize. We’re also investing in an automated frozen facility with a third party called Americold. That’s going to change so much for us — automation and fulfillment, but also in logistics and third party. It’s necessary just to have better predictability, better reliability.”
The Riverwalk store features a new cold box that has made forecasting and replenishment a lot easier not just for in-store restocking, but also for e-commerce pickers.
“We had our industrial engineers working on this to make it easier to replenish,” Bertram notes. “We have a dairy box; we’ve never done one of those on the sales floor before. It’s built for efficiency.” It also allows e-commerce pickers to walk into the cooler if something is out of stock on the shelf.
He says that most of Giant’s 2021 cap ex budget will go to IT improvements, “behind-the-scenes-upgrades-in-the-back-office stuff, but also in the commercial stuff. We have fulfillment upgrades that we’re doing. We have the Island Avenue facility that opens later this year.”
Giant currently has five EFCs, or e-commerce fulfillment centers. The company plans to open its largest EFC later this year in South Philly. The Giant Direct facility, located at 3501 Island Avenue and set to make its official debut in November, will use robotic picking technology from Norwegian company AutoStore in conjunction with grocery-specific software and pick stations supplied by Swisslog, which will install the system in the 124,000-square-foot fulfillment center.
“That will significantly change our capacity, because our e-commerce has grown faster than the industry average, which we’re proud of, but we’re running out of capacity, which is a great problem to have,” Bertram says. “We have a third-party relationship with Instacart in areas where we don’t have delivery, but Giant Direct as a brand has just taken off. It’s growing. It’s still growing — I think [it’s] tripled. It’s just crazy what’s happened.”
Speaking of growing, Bertram notes that the company still has room to grow inside of Philadelphia specifically, as well as in Pennsylvania.
“We’re [also] very strong in Maryland,” he adds. “Our store of the year is in Keyser, West Virginia. And so there’s communities with our Martin’s brand, with our Giant brand, with our Giant Heirloom Market brand and our Giant Direct brand. Between all of those brands, we have a lot of different ways to play, but we also have channels that we haven’t really fully exploited yet, like business-to-business. So if you think about an extension of our e-commerce prop, there’s another to explore.”
Bertram is aware of the intense competitive climate, but he looks more at what the customer wants than what the competition is doing. Last November, Ahold Delhaize revealed plans to launch an “endless aisles” online marketplace across store banners and pilot a subscription membership program at Giant, encompassing its Giant and Martin’s supermarkets. The Choice Pass annual membership plan offers unlimited free delivery and pickup for less than $100.
“We’re lucky because we have Peapod Digital Labs as a sister company, we also have Retail Business Services as a sister company, and now Supply Chain Services,” he says. “We’re really positioned well, because I can just look to the left at my colleagues who are presidents in those companies, and we do things together and we have the skill.”
The new Giant Riverwalk store clearly shows just how far The Giant Co. has come in its nearly 100 years, and where it’s going: a grocer that has transformed itself from being just a place to buy food to a physical and digital community destination that offers something for every kind of shopper.