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| Positioning itself between high and low end competitors, Fresh Seasons has found its niche. With about 100 competitively priced items and a broad selection of perishables, this neighborhood market makes every effort to please customers. |
In this era of supermarkets consolidating and mass merchandisers expanding grocery operations, single-unit independents who can grow their businesses or remain in business, are becoming rare. Even scarcer is the entrepreneur who, bucking these industry trends, opens a new location.
That’s what Dale Riley, a veteran of several supermarket chains, did in late 2005 in west suburban Minneapolis. Though only in business for 19 months, Fresh Seasons Market is positioned for success, industry observers say, largely because Riley is no garden variety, grocery mentality-driven operator.
During the first 20 of his more than 30 years in the industry–all in the Minneapolis-St. Paul market–Riley learned the business from Don Byerly, founder of upscale Byerly’s and one of the industry’s most
innovative operators. Riley rose through Byerly’s ranks to become president and chief operating officer.
Byerly, probably best known for preaching “do whatever it takes to satisfy the customer,” was one of the industry’s first operators to recognize the value of strong perishables departments, including hot bakeries. Under Byerly and Riley’s leadership, Byerly’s in-stores became “must-sees” for visiting supermarket executives. Not surprisingly, fresh-from-the-oven baking plays a major part in Riley’s Fresh Seasons strategy.
Riley also has a distinct advantage of having served as a top executive with half of the Twin Cities’ supermarket chains, including upscale Lund Food Holdings, which acquired Byerly’s 10 years ago; Kowalski’s, another upscale operator; and Rainbow Foods, a conventional chain.
The idea for the Fresh Seasons store came in summer 2005 when Riley was considering his next career move after having served as vice president and general manager of Rainbow Foods. He learned that an empty 25,000-sq.-ft. supermarket location was up for lease in Minnetonka, a suburb located a few miles west of downtown Minneapolis.
The supermarket had been the anchor for a small shopping center in Minnetonka’s hilly, tree-lined Glen Lake neighborhood. The store, Glen Lake’s only supermarket, had failed largely because of mismanagement.
Riley met with the center’s owner, a local property developer who discussed his plans to redevelop the center and surrounding area. Riley shared his vision to create a true neighborhood market. Liking what they heard, the two men split the cost of a market analysis. They subsequently decided that an independent food market could succeed and became partners in the venture.
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| (from right) Dale Riley, Mary Page and Sheila Wylie believe in sampling appropriate products the week before a special event, such as Mother’s Day. |
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| Monica Korst removes bread that the bakery bakes-off in-store. Breads are Fresh Seasons’ top sellers by unit number. |
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| Terry Marshall decorates a round, single layer, which retails for $9.99. |
Creating a true neighborhood market
Focus groups revealed that Glen Lake residents were distraught when they lost their neighborhood supermarket. Applying the results of the market study and focus groups and his experience at competing supermarkets, Riley sought to create a true neighborhood market with the banner, Fresh Seasons Market.
The store décor is warm, attractive and inviting without conveying a high-retail-price image. The visual presentation is part of Riley’s strategy to position his store between upscale Lund/Byerly’s and Kowalski’s and low-price leaders SuperTarget and Cub Foods. Other competitors include Rainbow Foods, Whole Foods, Aldi and several cooperative markets.
Many differences between Fresh Season’s merchandising and that of the high-end chains are subtle. For example, end cap displays in Lund and Byerly’s stores feature wood fixtures, and Kowalski’s black shelving and cherry wood displays connote upscale. “Our displays are less upscale but a step above Cub Foods and are less intimidating,” Riley explains. “We don’t want to call this an upscale market, and I won’t go head to head on price with Cub Foods. Still, we’re competing against everyone for the consumer’s food dollar.”
Riley also learned from Byerly the value of providing non-traditional products and services, such as branded restaurants, jewelers and post offices. Fresh Market partnered with well-known local retailers including a floral shop, an award-winning Chinese restaurant, a long-established Glen Lake pharmacist, a specialty gifts store and a sushi operator.
While other operators speak about providing value, generally in terms of low prices, Riley is more specific: “Customers save money. Just because our store looks nice, it doesn’t mean it’s higher priced.” In an average week, the store features hundreds of items on special throughout the store, he says. “Plus, we carry a high-quality line of private label products, which gives customers the quality of national brands but at a fraction of the cost.”
Customers also save time, Riley continues. “They place a high value on their time. We offer various ways to save it, including Market Meals, our prepared foods to go, and the store size, which lets customers come in, shop and leave quickly.”
Fresh Seasons customers avoid hassle, he adds. “Why should they have to run all over town to get this and that? Our store offers ‘this’ and ‘that’ and even ‘some of the other.’ And, if we don’t have what a customer wants, we will go all-out to satisfy her. That’s what Byerly’s and Lund used to do.”
All perishables departments are positioned on one side of the store. “Many customers shop several times a week, buying primarily perishables, and shop for canned goods once a week,” Riley says. “This format makes it easy to get in and get out with something for dinner from the deli and bakery.”
Tapping employee potential
To manage the store and its departments, Riley recruited many managers and associates who had worked with him at other chains. For example, Store Manager Mary Page had managed supermarkets for Rainbow Foods; she, in turn, recruited Bakery Manager Sheila Wylie, a 17-year veteran at Rainbow Foods.
Riley says he was deeply inspired by Byerly to tap employees’ full potential. Riley learned that employees are more committed and perform better when they know that management appreciates them. A big part of this is giving them decision-making responsibilities.
For example, Wylie is responsible for the in-store’s contribution to profit. As such, she selects products, purchases ingredients, allocates labor hours, sets retail prices, organizes promotions and handles merchandising.
“Sure, we [Riley and Store Manager Page] monitor the bakery’s performance, but it’s really Sheila’s job to run all aspects of her bakery,” Riley says. “It’s like Sheila operating her own retail bakery.”
Riley is well aware that in most supermarket bakery operations, management often cuts labor hours at the expense of increasing bakery revenue. “I told her that I don’t know what it takes to run the bakery. And, I don’t want us to miss an opportunity for a sale,” he says. “Clearly, we must watch payroll. But, I don’t ever want someone walking out the door to save overtime and miss a sale.”
Fresh Seasons’ bakery sales area is in marked contrast to what Riley enjoyed at Byerly’s. Byerly’s in-stores are expansive, featuring multiple curved glass dry and refrigerated service cases and pastry chefs working in customers’ view. Limited available space, only about 375 sq. ft., restricts displays to an 8-ft. upright self-service refrigerated case for cakes and desserts, a 6-ft. self-service donut and pastry case, a 12-ft. bread wall and a handful of island displays. All products, except custom-ordered cakes, are sold packaged for self-service.
“Does the upright case present itself as well as a service case would? No,” Riley says. “But, we currently couldn’t sell the volume of product to afford to have a service person behind the case.”
The bakery initially started with a smaller, low-profile case, but it was too small. “I didn’t have the money to buy it, but if I didn’t buy it, how would I grow the business?” he asks. “Fortunately, my business partner is right with me and said we had to do it.”
Freshly baked products
Despite the tight quarters, Wylie and her associates, Cake Decorator Terry Marshall and Baker Monica Korst, bake most of the 250 different products. They use primarily frozen ingredients, except an angel food cake mix and thaw-and-sell donuts, coffeecakes, loaf cakes, brownies and fancy desserts supplied by local specialty wholesale bakeries.
Riley says he wanted to offer as many products as possible freshly baked. Most in-stores from his previous experience received product from central bakeries and also produced items from scratch and mixes on premise. With a limited production area and no central bakery, he chose to introduce mostly frozen raw ingredients.
“I couldn’t have done this several years ago because the quality of frozen ingredients was not uniformly good in all categories,” Riley recalls. “I was amazed at the quality of bake-off products.”
Even if Fresh Seasons had access to a central bakery, he says it could not produce the breadth of high quality products available in frozen form. “At Byerly’s, our central bakery struggled to make a top quality croissant,” Riley says. “Here, we offer a frozen dough croissant that a customer, who was visiting from France, told us was as good as any croissant she had eaten in Paris bistros.”
The same thing goes for the bakery’s rye bread, one of the top three sellers. “A man who had lived in New York City said our bread was the best since he had left the city,” he adds.
Riley acknowledges that frying donuts on premise yields the best product. “But, frying would be especially difficult in our small space.” Instead, the crew uses a high quality thaw-and-sell donut line that they bake briefly and finish. “They sell very well. We’ve been very happy with the results.”
Riley selected local specialty wholesale bakeries for fancy desserts not only because of production constraints but also to tap their reputations for high quality. The products return small profits because higher price points would match those of upscale chains, he explains. “But, the products are distinctive, and our grocery store is the only one that carries many of them. This is one of the ways to keep customers coming back.”
To add its own distinctive touch, the bakery offers the Fresh Seasons Decadence Cake. Cake Decorator Marshall spreads a thin layer of 50/50 white buttercream and non-dairy icing over an 8-in. round chocolate layer. She adds an 8-in. vanilla cheesecake and applies a thin layer of the icing mixture. A second chocolate round goes on the cheesecake. Marshall ices the cake with the icing mixture, decorates with small dark chocolate stars and garnishes with chocolate shavings. The cake retails for $19.99, a single serving for $2.99.
Adding local favorites
Glen Lake residents appreciated the bakery’s adding mocho bars, a local favorite once offered by a now-defunct local retail bakery. Marshall slices a white sheet cake into single-serve bars, ices them with a with a blend of one part white buttercream and two parts non-dairy icing, and rolls them in finely ground peanut meal. Each bar sells for $1.
“It’s another example of how we work to be a neighborhood market,” Wylie says.
Riley looks forward to the day when the bakery can support a service case and other merchandising amenities. “First, we need to continue to increase sales and improve margins,” he says.
Given customer acceptance to date and Riley’s commitment to high quality and whatever-it-takes customer service, Fresh Seasons and its bakery stand to more than fill Glen Lake residents’ need for a neighborhood market.
Who knows? Minneapolis just might have another Don Byerly coming on the supermarket scene.