Saturday, September 13, 2008

Small-Format Food Retailing Memo: 'How Sweet it is': New York City's Economy Candy; A Small-Format Urban Store With A Single Focus

Small-Format Food Retailing Special Report

It's a small-format store that's been around for 71 years. And it has a single category focus: candy.

From the most premium chocolate bars and natural and organic confections, to everyday candy bars, exotic brands and much more, Economy Candy on New York City's Lower East side not only is a veritable one-stop shop for everything candy, it's also a category killer of sorts, selling its huge selection of sweet treats at discount prices, hence the store's name.

The family-owned and run, narrow but long store with high ceilings--which also sells scores of varieties of nuts and dried fruits along with its candy massive selection--was founded in 1937 by current owner Jerry Cohen's father.

When the senior Cohen opened Economy Candy in 1937 it was the typical old-fashion candy shop of the era, consisting mostly of bulk bins full of every imaginable variety of candy, from jawbreakers to chocolates, along with selling boxed chocolates for the gift market.

Today the younger Cohen, Jerry, who runs the store along with his wife Ilene, son Mitchell and a few dedicated employees, operates what New Yorkers call the "Noshers Paradise of the Lower East Side."

Economy Candy, which is located at 108 Rivington Street in the Big Apple, is packed with every imaginable variety of candy. The Cohen's follow the old retailing strategy of stacking product high and selling it cheap, filling the store's long, narrow aisles with stacks of discount-priced confections, including ethnic candy items that appeal to Jews, Hispanics and others.

The family-owned store, which has loyal customers from multiple-generations, also sells a variety of specialty and natural foods items, including teas, coffees and other products a a sideline. Jerry Cohen (no relation to the Ben & Jerry's founder of the same name) understands complementary merchandising well.

What makes Economy Candy so popular and what has maintained an astounding level of customer loyalty is that adapting to today's market and customer hasn't meant abandoning its essential quality as a neighborhood candy store, Cohen says.

Commenting on his philosophy of constantly bringing in new items, Jerry Cohen says: "You need to have whatever it takes to get people in. Teas, sugar-free and low-calorie candies, gift baskets and hand-dipped chocolates are among the products that filtered in as the inventory has changed to reflect the changing urban landscape of today," he says about his philosophy and the store.

Economy Candy also keeps to its origins. Along with offering hundreds of varieties (maybe thousands) of packaged candies, the store merchandes scores of candy items in bulk, along with offering numerous varieties of dried nuts and fruits in bulk bins.

These items range from the basic nut varieties like almonds, walnuts and cashews, to more specialty varieties like Hazelnuts, all sold at value prices. The store also offers a variety of its own special nut blends, creating various combinations and selling them in bulk.

The same is the case with dried fruits. Among the varieties offered include: dried apples, blueberries, strawberries, cranberrys, tart cherries, dried cantaloupe and many others.

But it is candy that's at the heart--literally and merchandising-wise--of Economy Candy. upscale, downscale, premium, conventional, natural, organic (and candy brands that can't be found elsewhere) are shelved and stacked throughout the store. It's a shrine to the ingredient sugar. And speaking of sugar, walking through the store one can't help smelling that sweet scent no matter what part of Economy Candy you are in.

Service also is at the heart of Economy Candy. Knowing customers by name, letting them nosh on the sweet treats in the bulk bins as long as they don't make a meal out of it, and seeking out rare brands and varieties of candy for customers are all a part of the family-style customer service the Cohen family practices at their 71-year old small-format, value-priced candy store on the Lower East Side.

Economy Candy is an excellent example of how a small store with a single-minded focus, combining reasonable prices with category expertise and superior customer service, can not only survive but thrive, even in the biggest city in the United States.

Lessons from the store's merchandising and operations, category expertise, affordable pricing, superior customer service, and more, are valuable to food and grocery retailers of any size and format. We also think there's room in the retail space for more small-format, single-focus (with some complementary categories of course) stores.

And such single-focus, category killer stores don't have to be huge warehouse stores. Rather, like Economy Candy, they can be smaller footprint stores, as long as the format and execution at retail are done in a superior way.

Economy Candy is a sweet case study in doing it all well from a merchandising, operational and customer service perspective.

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