Tuesday, April 29, 2008

Independent Grocer Memo: Utah's 75 Year Old Harmons Combats the Big Chains With Low-Prices; Gets Ready For Whole Foods' By Going Upscale & Natural

Inside the new, 70,000 square foot Harmons' supermarket in Draper, Utah this morning. The store features tons of specialty, natural and organic foods and in-store eating venues. (Photo: by Tim Hussin. Curtesy: Deseret News.)

Multi and single-store independent grocers continue to not only survive but thrive in the United States.

These family or independently-owned food and grocery retailers survive and thrive by finding one or more niches and mining those niches for all they're worth.

U.S. independent grocers also focus on the local: the communities and neighborhoods where their stores are located, local vendors and products, community organizations, and the local community residents themselves. When it comes to food retailing for successful independents in the USA, "everything is local" is always a part of their mission statement.

Service also is job one, job two and job three for successful multi and single-store independent grocers in the U.S., regardless if their stores are located in urban New York City, rural Oregon or suburban Utah.

One of America's most successful multi-store independent grocers is Harmons, a family-owned and operated independent with 13 stores in Utah.

Harmon's has been around for 75 years, and not by accident.

The grocer's stores are known for having a family atmosphere, which is key in Utah, which has the largest per-capita family-size in the U.S. Of course, a family atmosphere is key for independent grocers anywhere in the U.S.--just as are the local and service focuses.

Harmons' has always been famous for its low everyday and weekly advertised prices. In fact, the grocer has huge bulletin boards in all 14 of its stores where it posts the weekly advertising circulars of all its competitors--chain's and independents alike. The food retailer also posts its own weekly advertising circular along with the competitions' ads on the in-store boards.

If any of the advertised prices in the competitors' weekly ads are lower than the same item Harmon's is promoting in its weekly ad circular, the independent grocer gives shoppers that items (or items) at the same price as the lowest-price competitor is promoting the item(s) for. Harmon's seldom has to do this by the way, since it runs some of the hottest ads in the Utah market.

Beginning in the late 1990's, Harmons' also started to add specialty, ethnic, natural and organic grocery and fresh foods items in its stores in a big way.

Since then, it's dramatically increased the number of specialty and gourmet food and grocery items it merchandises throughout it's stores. The grocer also did the same with Asian food and grocery items, expanding the sections in most of its stores considerably.

To cater to the growing Hispanic population in parts of Utah, Harmons' also expanded its Hispanic grocery sections in most of its stores, along with adding specialty produce and meat items used frequently in Latino cuisine.

The family-owned food retailer also expanded its natural and organic grocery, fresh foods, produce and nutritional supplement offerings beginning in the late 1990's and continuing to the present. Harmons' integrated natural and organic grocery items throughout the core of the store, created stand-alone natural foods and supplement departments in its newer, larger stores, added organic perishables, and created organic fresh fruit and vegetable sections in its produce departments.

Lastly, the Utah-based independent grocer has gotten into upscale fresh, prepared foods' merchandising in a big way over the last decade. It's expanded the quality and quantity of the prepared foods offerings it sells in its stores, as well as creating in-store cafes and eating venues in some of its newer supermarkets.

Now, with its newest store, a 70,000 square foot supermarket which opened this morning in the Salt Lake City suburb of Draper, Utah, Harmons' has brought together all of its specialty, natural, organic and upscale offerings in one store in a comprehensive way.

The new Draper supermarket features shelves full of specialty, gourmet, ethnic, natural and organic grocery products.

The produce department is filled with organic fresh fruits and vegetables.

The huge meat department has organic meats and poultry, as well as prime and aged beef and other delights.

In-store, there is an espresso bar/cafe operated by local gourmet coffee roaster Park City Roasters, which is based in nearby Park City, home to Robert Redford's famous annual Sundance Film Festival.

There's also an Italian Gelato bar in the New 70,000 square foot Draper, Utah upscale supermarket, featuring 25 flavors of the popular Italian ice cream.

The large in-store bakery offers fresh-baked breads and pastries made with organic flour and other ingredients.

The new, upscale supermarket also has a gourmet restaurant inside, where professional chefs create white tablecloth-quality prepared meals.

There's also a meat carving station similar to those Whole Foods Market has in its stores, along with other prepared foods departments and venues.

Speaking of Whole Foods Market, the supernatural grocer will open its first Utah store in nearby Salt Lake City early next year.

Unlike the U.S. Federal Trade Commission though--which once again is trying to break-up the Whole Foods' acquisition of Wild Oats Markets even though the Washington D.C. federal court has ruled in Whole Foods' favor three times to date--Harmons' doesn't believe the new Whole Foods' mega-store opening in Salt Lake City next year is a competitive impediment to its going upscale and natural and being successful at it.

Rather, the opposite is the case. The 13-store independent grocer believes it can compete with Whole Foods on the natural, organic, upscale and prepared foods battlefield, while at the same time remaining a competitive, low-price focused supermarket operator.

If history is any guide--and it should be--then the Utah grocer is most likely right. Harmons has been a nimble grocer for 75 years. It's survived--and even thrived--in a market heavy with chain and independent competition.

That competition isn't letting up either. In addition to Whole Foods' opening a store in Salt Lake City next year, fast-growing Sunflower Farmer's Market also plans to open two stores in Utah next year, one in nearby Murray and the other in Orem.

Then there's Wal-Mart Supercenter, SuperTarget, Fred Meyer, Albertson's, and strong local independents Macey's and Dan's Foods, plus a few others--all competing for market share in Utah, which is becoming one of the most-stored grocery markets in the U.S.

For an overview of the new 70,000 square foot Harmons' supermarket which just opened this morning in Draper, Utah, we suggest you read this article in the Deseret News, one of the Salt Lake City Metropolitan region's two major daily newspapers.

Whether its a multi-store independent supermarket operator like Harmons' in Utah, a five store natural foods retailer like My Organic Market, which we wrote about earlier today, or a single store independent grocer like Cross Bros. Grocery in Ashland, Virginia, the independent food and grocery retail segment is not only surviving in the U.S., it's thriving, despite the continued chain growth and consolidation in the marketplace.

Those independents who create a tight niche, market locally, support their communities, and offer customer service as job one, job two and job three, are growing despite the economic downturn in the U.S. and the growing chain competition. This is a lesson any business can learn from.


Anonymous said...

would you let santa clara and ivins residents know when you plan to put your new store in santa clara, location on racheal and pioneer parkway. thank you, we are excited to have you comming to this area!!!

Anonymous said...

I am not so excited. The construction on the two-story Harmon's has begun. The problem - it is in my backyard. Absolutely, no consideration for the immediate residents. Harmon's or any other grocery store does not belong in a residential community.