PG's April Store of the Month: Fork Lift by Nugget Markets

When you come to the Fork Lift in Northern California’s Cameron Park, take it.

Especially if it’s Fork Lift by Nugget Markets, which, as the subject of our April Store of the Month, provides a case-study on how a once-underperforming warehouse supermarket successfully reinvented itself by spotlighting organic, local and specialty foods while maintaining its price-impact roots.

As its solo lifestyle/price-impact hybrid store – but not for long – Fork Lift is a unique member of Woodland, Calif.-based Nugget Markets’ 16-store family dotting the greater Sacramento and Sonoma valleys, and most recently, Marin County, with Sonoma Market and Glen Ellen Village Market. Nugget’s 12 namesake banner stores reside in an elite class of supermarkets around the country that set the high watermark for stellar store design, exceptional perishables and unrivaled service. Accordingly, the formation of Fork Lift, as a brand-new addition to the fold, was a calculated risk, but one that’s paid off nicely since its debut in December 2014.

The 50,000-square-foot Fork Lift has hit its stride as a best-of-both-worlds destination store that seamlessly blends the special charms of the regional retailer’s flagship banner with the utilitarian framework of its Food 4 Less forerunner. While the store’s hipster vibe doesn’t necessarily scream “no-frills warehouse store,” Nugget Markets President and CEO Eric Stille affirms, “It’s got the bones of a Food 4 Less.” Those sturdy bones, he adds, provided an ideal canvas on which to tinker with a hybrid concept that took its main cue from its initial warehouse configuration, tricked out from there with ample inspiration from market trends and competitive dynamics.

The tease on the cover of this issue, “The Ultimate Secret Behind Industry’s Most Impressive Hybrid Warehouse Store,” is a direct nod to the 90-member Fork Lift team, each of whom, Stille says, is integral to the overall process of redefining what a warehouse store can be. Led by Store Director Randy Watson, the New Age warehouse market embraces many of the format’s hallmark features – such as bulk foods, a vast produce department and value pricing on conventional staples – while setting the differentiation bar a few decisive clicks higher in other departments yet staying true to its distinctive local roots.

Organics on Top

Upon entry, guests are greeted by a dynamic “wall of values,” which immediately conveys the store’s foundational warehouse roots with aggressive promotions of large-quantity national brands. A series of bulk food stations pepper the inside of the “walls” on the way to an expansive, vibrant produce department where organics “get top billing,” notes Watson. The three-pronged technique packs a powerful punch to immediately convey an inviting, “cheap chic” ambiance with a convincing formula that fuses a price-impact format with a lifestyle specialty grocer under one roof.

Fork Lift prominently plays up 12 lifestyle designations for specific product attributes, including organic, local (within 100 miles), non-GMO and vegetarian, which are showcased throughout the store with pallet art and shelf tags, conveniently leading shoppers with special diets or product preferences to the appropriate areas.

To offer a helping hand when shopping for specific food categories, Fork Lift features shelf tags and high-visibility wall art denoting items suited for special diets or lifestyles.

Designed entirely by Nugget’s in-house team, Fork Lift also houses an impressive selection of chef-prepared foods; an in-store bakery (breads baked in El Dorado Hills store and brought up daily); a service meat department featuring local and organic meats and made-on-site sausage; a full deli complete with build-your-own sandwiches, salad and grain bars, and fresh soups; and a well-appointed healthy living department. Beer lovers are treated to the largest selection on El Dorado County’s west slope, while cheese lovers relish the specialty cheese counter.

Reflecting on the store’s nine-month transition, Stille says the build-it-around-organics-and-they-will-come approach was unproven, yet ripe for experimentation. “Before the conversion, the location was in the bottom third of the company’s stores, so the time was right to mix things up,” notes the fourth-generation grocer who leads the company started by his grandfather and great-grandfather 91 years ago.

Fork Lift’s foray into full-tilt organics and natural began, Stille describes, “by dipping our toes in the water, beginning in the refrigerated departments, which enabled us to double the SKU count. As our commitment to natural and organics gradually grew by adding more and more products to each department, we saw immediate sales increases as we went.” Consequently, he continues, “We felt we were onto something, and it just felt right when we moved on to produce, to take it at least 50 percent organics and see what happens.”

Elevating Itemization

The trial balloon took flight, and as momentum continued to build, the decision was made to remove the 8-foot steel beams within the store, which, Stille says, “allowed us to double the SKU count up and down the grocery aisles, again focusing on natural, organic and specialty, while selectively adding conventional shelving where needed.”

 When looking back on the before-and-after results, Stille says the journey to create Fork Lift was a learning experience on many levels. The original warehouse format “had heavy national-brand presence, and we were disappointed with its performance.” Conversely, at the conclusion of the rebranding, Fork Lift emerged at the top third of the company’s best performers, which Stille observes was “exponentially earned by double-digit-on-top-of-double-digit increases,” primarily by itemization changes, including an additional 20,000 new items.

“The biggest change of all was the itemization,” Stille says, noting, “It really shows the power of organics, which is what guests in this particular area were looking for.”

Each departmental overhaul was analyzed to ensure that labor savings were maximized “in order to allow us to stay as close [as possible] to our roots of a price-impact store,” which Stille says helped define “our own brand of hybrid that marries the best of a price-impact and best of a lifestyle store.”

The decision has proved to be both favorable and fortuitous – but not without teachable moments.

“While we didn’t discontinue a single Hispanic item with the conversion, because we chose to integrate products versus offering strictly Hispanic-focused aisles, we lost the Hispanic shopper slowly, which was not our intent by any means,” admits Stille. “That was the one downside of the conversion, but we’ve since stepped back to ask where we went wrong.” It’s an important question, he adds, “because we plan to convert our Woodland store to Fork Lift as well, but we’re going to focus on a definite heavier Hispanic focus,” including the addition of a fresh department.

Refreshing the Promise

While the store’s traffic flow has remained the same, its predecessor had no service departments prior to conversion. “So it was a big transition balancing the required efficiencies of a price-impact format that’s still designed for volume against wanting to elevate the fresh element,” explains Stille, noting that Fork Lifters survey the competition weekly to maintain the store’s value-pricing proposition.

To that end, Fork Lift significantly expanded prepared foods, many of which hail from the nearby El Dorado Hills Nugget Market. Stille observes, “We have a small kitchen here with limited production, with 50 percent of the prepared foods and bakery items being brought in,” which he says is both prudent and productive. “It’s playing off of both brands, but Fork Lift has differentiated itself. It is still a warehouse store with a Nugget feel.”

Indeed, the wide aisles and easy-to-navigate floorplan offer “a little more divergence” beyond a grid for “a pallet drop,” notes Stille. “We’re touching the displays a little bit more, which gives us the ability to bring in unique items, along with a choice between organic and conventional,” he adds. “While we always have our price-impact hat, at the same time we’re still looking to merchandise in such a way that speaks to freshness first, as well as uniqueness.”

Based the success of the item mix and adherence to remaining aggressive on pricing, Fork Lift added a service gourmet cheese department roughly a year after the store reopened, which further proves that a price-impact format can still be fun, without feeling sterile.

In terms of design, the polished concrete floors and exposed ductwork ceiling are intact from the original store, while new aisle markers and artwork, all created in-house by hand, are designed to stimulate the senses “to let the product speak for itself,” according to Stille.

Another noteworthy departure from the former model was the addition of baggers, which Stille says was carefully deliberated prior to proceeding. “But adding baggers actually helped the productivity of the checkers, while further enhancing the shopping experience, so it wasn’t as high of an expense as we originally thought,” he explains, characterizing the move as all part of the give-and-take of the price impact evolution.

Reflecting on the process that hoisted Fork Lift into a league of its own, Stille enthuses: “It was pretty cool, and very fun watching it come together, especially for the associates, because they were giving it their all. But once we acknowledged we were selling something that the guests really didn’t want, it all fell into place – thanks to people that made it happen.”