Take It to the Limit
The Oakville, Ontario, FreshCo store gives an appearance of nearly unlimited choice, but it actually carries an intelligently edited assortment, according to the banner’s GM, Rob Adams.
“It’s limited lines still,” he affirms during a store tour. “We’ve tried to do a more meaningful assortment, I guess. The number of SKUs was very carefully thought out. Instead of having six flavors of Jell-O, maybe you can have four, and add a category that you wouldn’t carry before, so we tried to create less compromise that way. What we’ve tried to do is take away some of the compromise people have in their minds when they go to a discount store: ‘Okay, I can only get toilet paper, and that’s about it.’ We’re trying to say, ‘You can do the majority of your shop, and it’s all going to be great prices, but there won’t be a service department.’ That’s the trade-off.”
While the banner is open to stocking new and interesting products, it can’t forget the needs of its core consumers. “We still have to carry mainstream [product], for sure,” says Adams. “That’s the focus of the store, [although] there are some organic frozen entrees and breads,” among other items, “that we’re trying.”
In striving to strike a balance between providing a range of appealing choices and delivering the right costs, FreshCo stores “are not going to claim to have the full assortment,” explains Adams. “We’re carrying the top sellers, still limited lines, but at great retails. These [items] are discounted significantly from a conventional store that would carry the full range of product. So it still falls into the strategy, people still save money, and it reinforces” the price-impact format, he adds.
Exactly how limited is the chain’s assortment? FreshCo stores normally stock about 10,000 SKUs, and Adams wants to keep it that way so that costs remain low. “We can’t let the assortment explode to 30,000 SKUs,” he notes.
A further consideration when determining assortments on a store-level basis is the ethnic makeup of the surrounding community. “We have the census information, the demographics of each neighborhood, and our merchandising team at the office will put together planograms by store, depending on the demographics,” says Adams. “At some stores, we wouldn’t put in a Latin American [assortment] as at the Oakville store, we would just focus on Asian or South Asian, as an example. They’re all slightly different, (a) because of demographics, and (b) some of it, just practically speaking, the stores are different sizes, so you may have to do less of one category in a smaller store. But we don’t have a cookie-cutter approach, whether it’s produce, bakery, grocery; they’re all done based on the neighborhood.”
To read the March 2011 Store of the Month story, “Northern Star,” visit www.progressivegrocer.com/inprint/article/id1578/northern-star/.