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INDEPENDENTS REPORT: Inspired innovation

Successful grocer, philanthropist, a man devoted to his family. That's how most people describe supermarket owner Henry Nemenz. To that, add innovator. Nemenz, 63, who operates nine Save-A-Lots and two IGA stores in northeast Ohio, recently put his creativity to the test by developing a new format called Super Saver Foods. The concept, which was introduced to the Youngstown-area market in July, is a cross between a traditional limited assortment food store and a dollar store.

Bright, clean, and efficient, Super Saver Foods has captured the attention of consumers seeking to simplify their shopping experience while saving both time and money. And industry watchers predict that Henry Nemenz is on to something good.

A 45-year veteran of the supermarket business, Nemenz refers to his creation as a "limited assortment variety store." Occupying 22,000 square feet in a renovated high-traffic strip center, the store deviates from a traditional limited assortment operation in that within its 16,000 square feet of selling space is an extensive variety of discounted nonfoods, general merchandise, and greeting cards. In the compacted center store, one entire aisle is dedicated to the higher-margin category.

Providing the majority of GM items are local nonfoods brokers John and Susan Filipovich, owners of J&S Sales. "In today's economy, consumers are looking to save money in any way possible," says John Filipovich. "That's why dollar stores have become so popular. Our goal was to help Henry capture his fair share of the GM market by offering inexpensive yet profitable items such as toys, kitchen gadgets, and personal care products, many of which retail for under a dollar."

Susan Filipovich adds, "Partnering with an outside broker to effectively manage a GM program, which in Henry's case includes an extensive clip-strip program, provides labor savings for the store."

Another difference between Super Saver Foods and a traditional limited assortment format is the store's emphasis on perishables. "Providing customers with higher quality and more variety, specifically in meat and produce, makes us seem more like a conventional store," says Nemenz. "Over the years, I've built a solid reputation by selling only top grade meats. Quality in perishables is something that I refuse to sacrifice."

Customers apparently appreciate the Nemenz resolve. "I shop here because Henry offers the best meat in town," says Alice Zidian, an elderly patron. "Price isn't No. 1 when it comes to meat. To me, it's quality that matters." She adds, "This store is clean and it's just the right size. I find everything I need here."

While a typical limited assortment store like a Save-A-Lot carries approximately 1,700 items, Super Saver Foods, supplied by Tusco Grocers of Denison, Ohio, stocks over 7,500 SKUs of private label and popular national brand items. Private labels emerging as top sellers at the store include Shur Fine, Tendersweet, and a line named after the grocer himself, Henry's Best.

Inspiring Nemenz to develop his new format were his own customers. "People shopping at our other limited assortment stores are asking for items that we don't carry. They're demanding more variety," he says. "Plus, the growth of dollar stores during the past five years made me recognize an opportunity. My strategy in developing the new concept was to combine the best of both worlds."

While his customers appreciate quality, variety, and shopping in a smaller store, according to Nemenz, price continues to drive individual transactions. "Through our everyday low prices, shoppers can save up to 50 percent on their purchases as compared to the local competition," he says. "That's what we want consumers to understand. We really push that message."

Push it he has—right into his front lobby. The operator recently compiled a grocery list featuring popular products, drove to the conventional supermarket down the street with checkbook in hand, and purchased those items. Parked prominently in the lobby of his new store are two full grocery carts—one from Super Saver Foods and the other from his competitor—register receipts attached. "Seeing is believing," says Nemenz. "Customers purchasing the same items at our store saved over $30."

True to the limited assortment format, the Nemenz operation offers no beer, wine, film, or cigarettes, which are high-pilferage items, nor does it offer an in-store deli or bakery department. Minus these higher ticket items, the average ring exceeds $22. "Our goal with Super Saver Foods, which employs 25 associates, is to save customers money by moving them in and out of the store quickly," says administrative assistant Marie Scott. "Service deli departments and bakeries are simply too labor-intensive and won't allow us to meet productivity budgets. Labor is obviously going to be key to the bottom line."

So, what's the projected bottom line? "If all goes as planned, we should net at least 3 percent on sales of $100,000 per week," says Nemenz.

He concludes, "I've been in this business long enough to know that selling groceries isn't that complicated. You build sales by listening to customers and giving them what they want. While price is important, it's not everything, because quality and service do matter. So far, things are going very well at Super Saver Foods. Customers are happy and the business is growing. We'll have to work hard every day to keep it that way."

Independent Retailing editor Jane Olszeski Tortola can be reached at [email protected].
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