Friday, September 19, 2008

Small-Format Food Retailing Memo: This Independent Combines C-Store Convenience With Fresh Foods, Groceries and A Secret Weapon -- Lots of Beer

Small-Format Food Retailing Special Report

Another independent, entrepreneurial retailer has decided the small-format hybrid convenience-grocery format might just be the future of food and grocery retailing. And like all good independents, Navid Tony Hoomanrad, who recently opened his Hyde Park Market neighborhood-oriented grocery and convenience-style store at 4429 Duval Street in Austin, Texas has added his own niche element to the format.

Hyde Park Market features a combination of traditional convenience store items, along with fresh produce (including organics), upscale Boars Head brand deli items, a refrigerated case devoted to quality ready-to-eat prepared foods items like Green Cart brand sandwiches, a selection of basic, specialty and organic grocery products, non-foods including a selection of hardware items, and Tony Hoomanrad's secret merchandising weapon -- beer -- and lots of it.

The independent grocer's strategy for his Hyde Park Market was to create a neighborhood store that was neither a traditional convenience store or a typical neighborhood grocery store. His goal: Offer in a small-format what he calls a "one-stop shop for fresh foods and grocery products that rivals anything found in a much larger supermarket. On a limited assortment scale of course.

He also believed offering an incredible variety of beer brands and styles could serve as a unique point of differentiation for his store, along with giving it a reputation for offering something special from day one. It also helps that Austin is a major beer drinking town.

Grocer Hoomanrad says he met with each of his eight beer distributors, ultimately deciding to order every domestic and imported beer brand, variety and packaging option -- single beers, 6-packs, barrels, you name it -- each one of them offered.

The result: currently Hyde Park Market is offering 525 different types of beer -- from Budweiser and Miller to craft beers and imports. In fact, although the store has only been open for a short time, it's believed to offer the second-most varieties of beer for sale than any other store, of any other size, in the city of Austin.

And remember, Austin just happens to be home to two of the biggest and best upscale food retailers (headquartered in Texas), both major beer category players, in the United States: Whole Foods Market, Inc. and upscale HEB Central Market.

No minor beer sellers these two retailers are, especially at their respective flagship stores in Austin. According to a local beer distributor who's in a position to know, Whole Foods' top beer selling store in Austin has about 450 varieties of beer, while Central Market clocks-in at about 360 or so.

The distributor says the only-recently opened Hyde Park Market isn't the number on beer variety retailer in Austin...yet. But it's close. That honor goes to a specialty beverage retailer named Specs, which offers about 550 varieties of beer, he says.

But grocer Hoomanrad is only 25 varieties behind Specs, which has been around for much longer, for the honor of the retailer offering the most varieties of beer in beer-drinking Austin, Texas.

And since the beer distributor says Tony Hoomanrad asks his beer sales reps each time they're in the store if they've got in anything new that his store isn't carrying -- and usually orders whatever beer it is if they do -- we wouldn't be surprised if Hyde Park Market, one of the latest entrants into small-format hybrid grocery and convenience store retailing, very soon becomes the number one beer variety seller in all of Austin -- along with offering lots of fresh foods, groceries (including specialty and natural) and other grocery store products, along with a mix of traditional c-store items (including a fueling station outside), all blended into a hybrid formula in a small-format store.

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