Retail Memo: Hybird Natural-Specialty Foods Grocer 'Wholesome Choice' Set to Open New Store Tomorrow In Anaheim Hills, Orange County, Southern CA

Hybrid specialty-international-natural and fresh foods grocer "Wholesome Choice" is set to open its second unit in the Southern California city of Anaheim Hills in Orange County tomorrow, according to our sources.

The new market is located in a former Albertsons supermarket at the corner of Imperial Highway and La Palma in Anaheim Hills.

The flagship "Wholesome Choice" store is in Irvine, California, which is also in Orange County. That store opened in 2003.

The independently-owned grocer hasn't officially announced the new store's opening. However, our sources say it will be a soft opening tomorrow, March 27, will a grand opening to follow later.

The "Wholesome Choice" format is an interesting one. Below (in italics) is how the independent grocer describes its format and merchandising philosophy:

"Since 2003, Wholesome Choice Market has been providing the best the world has to offer. With a variety of products as diverse as the cultures that shop at our store, you can trust Wholesome Choice to carry your favorite American brands, plus an impressive line of Asian, Mediterranean, Russian, Eastern European, and even have South African foods. We even have the natural and organic foods you've come to expect, along with delicious market-fresh produce that arrives daily.

The Wholesome Choice difference begins with our hearthstone bakery, located at the front of the store. The special breads we bake can't be found at the supermarket, but you'll see them rising in our ovens throughout the day here! We also feature an international food court, feeding our community with the foods they love - both foreign and domestic! We cater to all cultures, so everyone feels welcome here at Wholesome Choice. You'll find lots of locals eating in our dining area rather than taking their food home, so feel free to come and sit, eat and talk. Then shop around for the extraordinary, which can be found on every aisle of the store."

The grocer has combined a selection of basic groceries with natural-organic, international and domestic specialty foods, fresh foods (produce, meat-seafood and bakery) and prepared foods under one roof.

The stores also include beer,wine and spirits departments along with fresh floral sections, making them a full-service supermarket with an international specialty and natural foods flair.

Below we take you on a brief departmental tour of the Irvine 'Wholesome Choice" market. The new Anaheim Hills store will be the same basic format with a few additions and differences, we are told.

Fresh Produce

Fresh produce is a big part of "Wholesome Choice," including organics and locally-produced fresh fruits and vegetables.

Produce department specialists also offer shopper information in-store on where the produce comes from (imported, local), as well as offering nutritional information and preparation tips.

The grocer's merchandising approach in the Irvine store to fresh produce is farmers' market style. The fresh fruits and vegetables are stacked high in bulk form in dry bins and in the refrigerated produce cases. Full case displays are also attractively used throughout the produce department, creating an abundant look and feel.

The place of origin -- domestic, local, imported -- are labeled with colorful signs. The nature of the produce, conventional or organic, also is indicated on the signs.

The store also encourages shoppers to taste many varieties of the fresh produce it sells, particularly the more exotic varieties and locally-grown items.

The fresh produce pricing is competitive.

Meat & Seafood

The meat and seafood department offers the same conventional-specialty-natural and organic hybrid theme that's apparent throughout the Irvine "Wholesome Choice" market, and will be the same in the new Anaheim Hills store.

The department offers conventional cuts of meat, although all of the meats sold are antibiotic-free, 100% vegetarian fed, and have no added hormones, along with specialty items and cuts. For example, the poultry selection includes Rosie Organic Chicken and Empire Kosher poultry.

The meat department also offers a full selection of Halal meats for observant Jews and Muslims, as well as for others who just prefer Halal certified meat products.

A full selection of beef, pork, lamb and other meat cuts are offered in the department, both conventional and organic.

Butchers also will prepare custom cuts by order for customers.

The department also offers a complete selection of fresh fish and seafood, along with a refrigerated case featuring a selection of hot and cold smoked fish products.

Fresh Bakery

The in-store bakery is mostly a made-from-scratch operation. It features varieties of breads from around the world baked daily in hearth ovens. Among the fresh-baked breads are several organic varieties, artisan loaves, French and Mediterranean breads, Russian, Eastern European, Greek and Persian varieties.

The bakery department also offers an extensive selection of fresh-baked pastries and cakes from around the world, along with other sweet treats.

There's also a full aisle of packaged breads and bakery products, ranging from basic brands to specialty and natural-organic brands and varieties.

Grocery

"Wholesome Choice" integrates its extensive selection of basic groceries, domestic and international specialty and ethnic foods, natural and organic items by category throughout the core of the store grocery section. There's no segregation by product type (organic, conventional) or origin (domestic, international).

Below is how the grocer describes its product selection and merchandising philosophy and practice:

"Imagine a variety of little specialty grocers rolled into one big store: your neighborhood American market, a Mexican Mercado, a Mediterranean open-air bizarre, an Asian greengrocer, and a Spanish Boqueria: now you get the idea behind the selection at Wholesome Choice. Every aisle is packed with grocery items grouped by category, not culture. From Organic cereals to wasabi paste, tamarind fruit snacks to German vanilla sugar, it's here. Dried herbs, packaged products and canned goods from all countries, for all types of cuisine. We've got the brands you're sure to know, others you're sure to discover.

Wine, Beer, Spirits

"Wholesome Choice" carries over its eclectic international foods merchandising philosophy and hybrid natural-specialty products focus into its wine, beer and spirits department. The store offers a massive selection of wines, beers and spirits from throughout the world, as well as numerous organic and locally-produced wines and craft beers.

Wines and spirits are merchandised on utilitarian yet attractive warehouse-style racks. There's a large refrigerated case for the beers. Some wines are refrigerated as well. Lots of cross-merchandising tie-ins are created with items such as snacks, cheeses and the like in and around the department. There are also end-caps featuring various wine, beer and spirits items.

Bright yellow signs above the shelving (and refrigerated case) designate each section -- wines, beers, spirits.

Floral

"Wholesome Choice" offers an extensive selection of fresh flowers and green plants in its floral department. These varieties range from the basics to the more exotic. The department also does lots of seasonal floral merchandising, even offering trees and shrubs on a seasonal in-and-out basis. Organic flower varieties are included in the offering.

The floral department also is staffed with specialists who make custom floral arrangements for customers, along with doing special events like weddings, charity functions and the like. It's full-service in that regard.

Deli-Prepared Foods Court

Closing out (last but not least though) our departmental tour of the "Wholesome Choice" market in Irvine, California is the Deli-Food Court. The store's prepared foods department offers an impressive variety of ready-to-eat foods. These include: fresh in-store prepared pizzas; a cold and hot deli; soups and salads; an international grill; and Chinese, Thai, Indian, Persian and Mediterranean foods offerings, all prepared fresh in the store. You can learn more about the food court offerings here.

'Wholesome Choice': Natural~Specialty Foods Memo Analysis

Having toured the "Wholesome Choice" market in Irvine, California, it's our analysis that the grocer is on to something with its specialty-international-ethnic-conventional-natural-fresh foods hybrid format. It's a somewhat similar format to Stew Leonards (although the store isn't as big) on the east coast of the U.S. and Harry's Farmers Market in Atlanta, Georgia, which is now owned by Whole Foods Market, Inc.

The format is sort of a Whole Foods Market without the ingredient restrictions, times an international food court, plus an ethnic and specialty food and grocery emporium.

"Wholesome Choice" waited nearly seven years to open a second store, the new market set to open tomorrow in Anaheim Hills, which proves it's a prudent operator. It's used that time to fine tune its Irvine store.

The only danger we can see with the format is in trying to be all things to all categories. But in our analysis "Wholesome Choice" has avoided that happening thus far by using good product selection and merchandising criteria and skills.

Some years ago, way before its acquisition by Whole Foods Market, Inc., Wild Oats Markets, Inc. repositioned its Henry's Farmers Market banner stores in Southern California into a hybrid format similar to what "Wholesome Choice" is doing. But Wild Oats never got it right, in our analysis. Perhaps it takes an independent, hands on daily, to be successful at what can be a difficult format.

Wild Oats later changed the format a bit more closer to orthodox natural-organic but still left elements of that hybrid nature intact.

Henry's (and the Sun Harvest stores in Texas) are now owned by Los Angeles, California-based Smart & Final, which bought the chain of 36 stores from Whole Foods shortly after the 2007 acquisition of Wild Oats by the Austin, Texas-based natural grocery chain.

Smart & Final-owned Henry's, which operates largely as a separate division from Smart & Final's retail operations, has improved the look of most of the Henry's stores since taking them over in 2007, in our analysis. The stores are still a natural-specialty foods hybrid of sorts but not in the way Wild Oats took them years ago, which included selling mainstream grocery brands next to natural and organic products on the shelves. It will be interesting to see what direction Smart & Final takes the Henry's Farmers Market stores from here.

Meanwhile, although a single-store retailer up until now, and soon to be just a two-store retailer when its second unit opens, we think "Wholesome Choice" has an opportunity to extend its format into additional store locations successfully if it chooses.

We're told the new unit in Anahiem Hills will feature some additional touches that the current Irvine market doesn't have, but will keep the same basic format and focus, which in our analysis is a good idea.

We think taking a basic format blueprint and then "localizing" it to the particular community and neighborhood a store is in is the best approach. But we do mean real "localization" rather than just lip service. For "Wholesome Choice" that won't require much "localization" since the two cities are close by and share many characteristics. But they also have qualitative differences, which is why "localizing" a unit to its neighborhood within its basic blueprint is so important for grocers to do. "Wholesome Choice" has a good eye and ear for local merchandising based on our observation.

"Wholesome Choice" adds an additional element to the already competitive, multi-format Orange County, Southern California, food and grocery retailing mix. We think that based on how the independent grocer has performed with its Irvine market, "Wholesome Choice" should do well with its new store in Anaheim Hills, despite the current recession.

Of course, like all retailers regardless of format, our basic rule applies. That rule is that in the current economy, all grocers must focus on the value-proposition in their own unique and individual ways, whatever the format.

Independent Grocer Memo: New York's 7,000 Bodega (Small Grocery) Store Owners Say 'No' to Proposed 18% Tax Hike On Juice Drinks and Soda Pop

Sweet Grocery, pictured above, is a classic, old school Latino family-owned New York City bodega. The name bodega came from these classic stores, mostly started and operated by immigrants in the city's Latino neighborhoods. A distinctive design feature of an original bodega is the calssic metal sign like the one on Sweet Grocery above. Today the term bodega is used in New York City to describe a small grocery store regardless of it look. And most today look just like a typical urban, small grocery store looks. The photograph above was taken by New York City artist Josh Goldstein. His art is inspired by New York City's many bodegas. Josh Goldstien even has a Web site "BodegaNYC,' where he showcases and sells his bodega inspired art, and offers observations about the stores and the city. You can view the Web site and Josh Goldstein's bodega-inspired art here.

The "Bodega (small grocery store) Association of the United States," which is based in New York City and represents 7,000 independent grocery store owners in New York state, according to its Web site, most which independently own and operate small stores or bodegas in New York City, has joined a fast-growing coalition that's fighting New York State legislation that would slap an 18% sales tax hike on juice drinks and soda pop sold at food, grocery, convenience and other stores in the Empire State.

The anti-soda pop and juice drink tax-hike coalition called "New Yorkers Against Unfair Taxes," says it has thus far signed up 90 New York business and citizen's groups in its efforts to stop the proposed legislation. The coalition also says it has so far obtained the signatures of 5,400 New Yorkers in a petition drive it's launched to demonstrate voter opposition to the new tax. [You can view group's petition Web site at the link here.]

Today the anti-juice drink and soda pop tax increase coalition turned up the heat on its campaign in New York City by staging a rally at the Fine Fare supermarket, which is at 1239 St. Nicholas Ave at 172nd Street, in New York City. The store is a branch of the New York-based 50 store Fine Fare supermarket chain.

It's estimated there are about 25,000 grocery stores in New York State, the majority of which are small stores or bodegas, many averaging only a few hundred square feet in size. The highest concentration of those small, independently-owned grocery markets is in New York City. For those who've never visited the Big Apple, there are generally two or three, and often more, of these bodegas on every block.

Here's what Nelson Eusebio, the chairman of "New Yorkers Against Unfair Taxes," says about the "Bodega Association of the United States" joining the coalition: "The exorbitant cost of doing business in New York has already taken a major toll on the state's small supermarkets and neighborhood bodegas, with more than 2,300 bodegas closing over the past four years, representing a loss of more than 8,500 jobs. The inclusion of the Bodega Association of the United States is particularly significant, given its representation of more than 11,000 bodegas throughout the state of New York. (Note: the bodega association's Web site says it represents the interests of 7,000 grocery stores rather than 11,000. So we are using that number.)

Walking around most any neighborhood in the five boroughs, you will see an iron gate where a storefront used to be. In addition to the bodegas, more than one-third of our city's supermarket owners have had to close their doors in the past five years. I'm proud of the way New Yorkers have come together through this coalition to protect this industry and preserve our communities, and we will continue to press forward to defeat this tax," he adds.

Ramon Murphy, the president of the 7,000-member association of small grocery store owners says: "Every week a bodega closes down as a result of the current economic conditions, and this proposed tax could lead to even more family-owned businesses having to shut their doors forever," said Ramon Murphy, President of the Bodega Association of the United States. "We've joined the coalition to prevent this from destroying our livelihoods, and the communities built around these businesses."

The new, proposed 18% sales tax hike will be in addition to the sales tax New York state consumers already pay on the juice and soda drinks. If the legislation is passed, New Yorkers will pay about a 25-30% sales tax on the retail price of the drinks.

The "New Yorkers Against Unfair Taxes" coalition includes in its membership, in addition to the Bodega Association of the United States: The Food Industry Alliance of New York State, which represents supermarket chains and independents in the state; Gristedes supermarket chain; New York Association of Convenience Stores; New York State Restaurant Association, New York State Automatic Vending Association; which represents companies in the vending machine business; Coca-Cola Bottling Company of Buffalo, New York; Polar Beverage Company; Dan's Supreme Supermarkets, Inc., a chain of independent supermarkets in the state; Grocery Manufacturers Association, the national trade group for U.S. grocery product manufacturers; The Coca-Cola Company-Glaceau; National Restaurant Association; Hispanic Chamber of Commerce (many of New York's bodegas are owned by Hispanic Americans, particularly those of Puerto Rican nationality); National Puerto Rican Coalition; and numerous other associations and businesses, including many individual grocery stores and restaurants. [You can read a full list of the members on the anti-tax hike coalitions Web site here.]

New York's Democratic Governor, David Paterson, and the majority Democratic legislature in the state capital in Albany are struggling to find ways to cut expenses and raise revenues because of the state's massive budget deficit. Much of New York's tax revenue depends on Wall Street and the state income taxes paid by the highly paid financial services industry workers who work on the street, according to data Governor Paterson recently presented.

The financial industry crash, and all of the value taken out of the big banks and investment firms, combined with the many layoffs in the industry, have reduced New York state's income tax revenue by double-digit percentages. As a result, the Governor and the state legislature has cut tens of millions of dollars worth of programs, are cutting more, and are searching for new revenue by proposing tax increases like the 18% sales tax-hike on soda pop and juice drinks.

New York city's bodega owners are an important group and can be very affective politically in the state, particularly in New York City. Since they operate thousands of retail stores -- stores where the windows will be plastered with anti-juice drink and soda pop tax-hike signs and where daily the grocers can collectively tell tens of thousands of people about their anti-tax position -- the store owners will be a powerful "retail politics-oriented" force in the coalition's campaign to defeat the proposed legislation.

The anti-juice drink and soda pop tax-hike coalition is planning more rallies like the one held today at the Fine Fare supermarket. A major focus of the anti-tax hike campaign is to highlight what the coalition argues will be the loss of many more jobs at a time of massive job loss already in New York and throughout the U.S. if the tax hike passes.

Of course, the people of New York and the rest of the country want and need added services -- unemployment insurance, medical assistance, ect. -- because of the current unemployment situation.

And it is here where nobody has the answer: In this recession, states like New York and California (and many others) are going broke, hundreds of thousands of people are losing their jobs each month (perhaps 700,00 this month alone), and the demand for government services is way up but tax revenue is way down. There really are only two things state governments can do in some combination -- cut programs and thus expenses and raise revenue (taxes).

Unlike the U.S. federal government, most states in the U.S. can't borrow their way out of the mess because they have state laws that require them to balance the budget. New York and California both have laws that require this.

So it comes down to this: Does a state cut all of its vital services until it can balance the budget in these times when more and more people are demanding those services? Does it raise taxes, like with the juice drink and soda pop tax hike? Or does it try to do some of both: Cut programs as much as feasible and raise taxes in a way that focuses on things like consumption rather than payroll taxes or income tax.

That answer depends on where you sit, we suspect. And for New York's food and grocery retailers, they are sitting, actually standing most of the time, in the position of being the ones that feel they will be most impacted, along with the state's juice drink and soda pop drinkers, by the proposed 18% tax hike on the drinks. Therefore they oppose the legislation.

Independent Grocer Memo: Northern California Independent Ben Lomond Market Creates Job For 90-Year Old Man Scammed Out of $738,000 By Bernie Maddoff

From near-millionaire to $10 an hour, 30 hour per-week grocery store greeter: Ian Thiermann, who's motto is "You do what you have to do," at work in the Ben Lomond Market in Ben Lomond, California. [Photo Credit: KPIX Channel 5, San Francisco.]

Independent Food & Grocery Retailing USA - Independent Spirit

Ian Thiermann, a 90-year old retired businessman from Ben Lomond, California, a small town near the city of Santa Cruz on Northern California's coast, says he lost his entire life savings, $738,000, to the Wall Street financier and Ponzi Scheme crook Bernard Maddoff. The $738,000 was what Mr. Thiermann had saved and invested throughout his working life for his retirement.

As a result of losing it all, Ian Theirmann decided the only think he could do was to return to work at age 90, he told San Francisco-based KPIX, Channel 5 television for a recent report the station did about the Ben Lomond resident.

However, with the current job availability situation so poor, along with the fact he is 90-years of age, Ian Thiermann wasn't completely confident he could find a job in the small, coastal Northern California city where he lives.

But a local independent grocer, Ben Lomond Market, heard about Mr. Thiermann's plight and offered him a 30 hour a week job at $10 an hour as the store customer greeter, a position they created especially for the energetic and sociable 90-year old."This is not a woe is me kind of man.

This is a community coming together and helping each other out in times of need," Barbara Loffer of Ben Lomond Market told KPIX.In explaining his plight and decision to return to the work force as the official customer greeter at Ben Lomond Market, Ian Thiermann told KPIX reporter Kiet Do: "You meet a situation like this, what are you gonna do, fold up? Instead of crying, yelling or being mad about it, face it and move on."

That simple sentence and overall attitude from Mr. Thiermann, a man who at age 90 lost every cent he had saved throughout his working life and as a result did what he had to, which is to go back at work, is something we should all keep in mind as we struggle in the current bad economy.

Times are tough without a doubt -- but like Ian Thiermann, who was born in 1919 and has lived through wars and the Great Depression -- and survived -- says: "You meet a situation like this, what are you gonna do, fold up? Instead of crying, yelling or being mad about it, face it and move on."

That's a motto, and attitude, we all should follow. It's also the attitude that will get the country out of the current economic recession and malaise.[

[You can read the report from KPIX Channel 5 here.]

[You can view video of Ian Thiermann at the Ben Lomond Market at the link below: http://cosmos.bcst.yahoo.com/up/player/popup/?rn=3906861&cl=12126414&ch=4226713]

Independent grocer Ben Lomond Market demonstrates what we often say about America's independent grocers -- that they survive and thrive in the U.S. food and grocery retailing sector in large part because they focus on being an integral part of the communities where they operate their stores. They focus on the local -- local customers, products and issues. We call that the independent (grocer) spirit.

The independent supermarket, which in addition to selling basic food and grocery products specializes in merchandising lots of specialty, natural and organic food and grocery items, along with high-quality fresh, prepared foods, also demonstrates that the community focus we describe and write about America's independent grocers extends far beyond only selling groceries -- it's all about community and neighborhood in most cases. And that generally translates into increased business.

We wish Mr. Thiermann all the best in his new job. And we think he will be a great asset to the market, its owners, and its customers.

Independent Grocer Memo: Tradition, Local Focus, Customer Service and More Keeps Central Oregon USA's Erickson's Thriftway in the Game

All in the family: Erickson's Thriftway managing partner Doug Schmidt (center) towers over two veteran employees at the Bend, Oregon flagship store -- head checker Debbie Huber (left) and assistant manager Marlena Lohman (right) -- only in physcial height and not in the way the independent grocer relates to its employees, which is as part of the family. Debbie Huber has worked at the Bend, Oregon store for 32 years. Marlena Lohman has worked at the store for 29 years. Doug Schmidt is the rookie among the three, having worked for Erickson's Thriftway for a mere 28 years, starting out on the store floor. [Photo Credit/Andy Tullis - The Bulletin.]

Independent Food and Grocery Retailing USA: Guest Memo

A regular reader of Natural~Specialty Foods Memo (NSFM), who also happens to be an independent grocer in the USA, sent us an e-mail note today saying he enjoys when we write about independent food and grocery retailing and independent grocers, commenting in his note that he wished more publications would write about his fellow independents, which are an important segment of food and grocery retailing, be they discount grocers, upscale grocers or natural and specialty foods retailers.

Our independent grocer-reader included a link to a story published in today's Bend, Oregon-based The Bulletin, the daily newspaper of record for the Central Oregon region in the Pacific Northwest USA region.

The story, by staff writer Andrew Moore, is about a local Central Oregon four-store independent grocer, Erickson's Thriftway, and how the independent is not only surviving but doing well despite the bad economy and the strong competition in the market from big chains like Safeway, Fred Meyer (owned by Kroger Co.) and Albertsons, along with intense competition from other regional grocers.

The very first Erickson's Thriftway grocery store opened in downtown Bend, Oregon in 1915. Today the four-store operation is no longer owned by the founding Erickson family but rather by a partnership (privately-held) headed by Doug Schmidt, the managing partner for Erickson's Thriftway.

The four Erickson's Thriftway stores are neighborhood supermarkets, averaging about 20,000 -to- 25,000 square feet. But the grocer packs the stores with nearly as strong of a selection of products as supermarkets twice the size of the Erickson's Thriftway stores do, Doug Schmidt says in the The Bulletin story.

The piece in today's The Bulletin includes a Q&A interview by the writer with Erickson's Thriftway managing partner Doug Schmidt. The interview offers a nice look at just what and how one of the many independent grocery retailing companies in the U.S. is dealing with the current recession and intense competition from mega-chains on its home turf.

We enjoyed reading the story, thank our independent grocer-regular reader for passing it on, and decided to run a link to the story below because we think it will be of interest to Natural~Specialty Foods Memo (NSFM) readers.

The story:

A grocery chain with local roots
The first of the Erickson's stores was established in 1915

By Andrew Moore / The Bulletin February 10, 2009

Doug Schmidt is the managing partner of the Erickson’s Thriftway grocery store chain in Central Oregon, a chain that traces its roots back to its first store opening in downtown Bend in 1915.

Though the four-store chain is no longer owned by the original Erickson family, Schmidt sees to it that the name still stands for service.

"There have been lots of changes in the supermarket business, but it’s no different from other businesses: Take care of your customers and your customers take care of you," said Schmidt.

[Click here to read the full story.]

Independent Grocer Memo: From Mrs. Gooch's to the Auto Body Business, Then Back to Retail, Chris Kysar is On A Healthy Organic Foods Retailing Roll

Natural-Organic Foods Retailing USA

One of the early and most successful natural and organic food retailing pioneers was Southern California-based Mrs. Gooch's Natural Foods Market, which started with one store founded by a former teacher who suffered from food allergies. She became frustrated about not being able to find the types of chemical-free and additive-free "clean" and healthy foods she needed as a shopper in other natural food stores, so started her own -- Mrs. Gooch's.

Over a number of years, Mrs. Gooch's grew into a multi-store natural and organic foods mini-chain in Southern California. In 1993 it was acquired by Whole Foods Market, Inc., which at that time was a fairly small, fledgling natural foods retailer itself. In fact, the acquisition of Mrs. Gooch's really was the start of Whole Foods' rapid expansion program, which finds it today with about 280 stores and $8 billion in annual sales, as well as being the subject of an antitrust legal case by the FTC regarding its acquisition last year of Wild Oats Market, Inc.

From 1983 -to- 1992 Chris Kysar was the director of purchasing for the original, pre-Whole Foods acquired Mrs. Gooch's Natural Foods Market chain.

After that, Kysar (pictured at left) made a career change, opening up his own auto body shop. But natural and organic foods retailing was still in his blood, so he closed the body shop and took a job as a bagger at a natural foods store, starting back at the bottom of the healthy foods chain, so to speak.

He then moved to Sonoma, in Northern California, where he operated his own natural foods store for five years, until it burned down in 2000.

In 2001, Kysar heard about a small natural foods store, Earth Song, for sale in the small Gold Rush city of Nevada City, which is not far from Sacramento. He bought the store in August, 2001.

After operating Earth Song for about a year as it was, Kysar changed the store's name to California Organics in 2002 and began converting the store's product mix to 100% organic food items and to near 100% other organic products.

Today the store boasts of having the only 100% certified organic service meat counter in the nation. All of the fresh produce sold in the store is organic and is certified by a third-party inspection and testing firm as being so.

Additionally, California Organics' in-store grill and prepared foods operation (which includes eating inside the market) uses 100% organic ingredients for its made-from-scratch meals, side dishes and desserts.

The independent natural-organic grocer has operated California Organics successfully since 2001, incorporating many of the ideas and the buying and merchandising experience he gained all those years heading up purchasing for Mrs. Gooch's, along with applying the single-store entrepreneurial skills he developed operating his store in Sonoma, growing the business significantly.

Kysar's grown the business at California Organics so much in fact that he's ran out of room, and wants not only a bigger but a more visible location for the independent organic foods market.

And the organic products grocer has big plans to do just that. Those plans start with relocating the store into a much larger building, a former furniture store in the city, which he plans to remodel and have open by the middle of next year.

The Union newspaper, which serves the Nevada City area, has a profile today about Chris Kysar and his California Organics independent organic foods market.

Read the profile, "California Organics looks to expand on Broad Street," here.

Chris Kysar and his California Organics market is another example of how numerous independent grocers of all formats -- be they natural-organic, upscale, specialty or discount -- find a niche in the U.S. food and grocery retailing industry and not only survive but thrive against the giant chain operators. It's all about combining the fundamentals of food retailing with the creation of points of differentiation, and then executing each and every day.

[Photo credit: John Hart/The Union]

Independent Grocer Memo: Eight-Store Michigan USA Independent Hiller's Markets Demonstrates Why Independents Survive and Thrive in the U.S.

Independent Food and Grocery Retailing USA

Michigan USA independent grocer Jim Hiller embodies many of the qualities that make the independent food and grocery retailing sector the thriving success it is in the U.S., despite all of the pressure and competition independents receive from the chain store giants. Hiller, the CEO of eight-store Hiller's Markets, also has a number of unique qualities that make him an exceptional entrepreneur and grocer, as well as an interesting guy.

For example, he writes and publishes his own Blog on the Hiller's Markets Web site. And he takes positions on issues.

His most recent cause is a campaign encouraging people to "Buy American" automobiles. Michigan, where Hiller operates his eight supermarkets (with number nine on the way) is hurting more than any other state in America in the current economic recession. It has the highest unemployment rate, for example, currently hitting about 13%, compared to a 6.7% rate nationally. And of course, Michigan -- specifically Detroit and its suburbs -- is "Big Three" automaker country. Even with the current government loans, the Detroit automakers are shedding thousands more jobs, which also means thousands more lost because so many other jobs in the state are related to the ato industry. [Read independent grocer Jim Hiller's most recent post, "Why I Drive An American Car," here.]

Hiller's is a success in Michigan for a number of reasons. But central among the reasons are because the small, independent chain does what independents do best -- it offers a great selection of food and grocery products at affordable prices, focuses on specialty items not available elsewhere in many cases, makes customer service job one, and places a total focus on the local communities and neighborhoods where it operates its stores, including customizing each of its eight stores to the particular communities and neighborhoods they are located in.

Below is how Hiller's describes its stores:

"If you’ve never been to an authentic grocery store before, you’ll love Hiller’s," says Jim Hiller

Our grocery stores offer premier products, gourmet delectables, healthy choices, and lifestyle shopping. It has been said that we eat with our eyes before we ever take a bite. You’ll have such a sensory-rich experience at Hiller’s - how good it will feel for shopping to be enjoyable and even fun!

The company was created in 1941 by Sidney Hiller with a commitment to quality, selection, and value. Now, led by Jim Hiller, Hiller’s Markets is Michigan’s home for discerning shoppers. We listen to shoppers, and we obtain items that you request, no matter how arcane, rare, or unusual.

Hiller’s embodies Jim’s passion for food, for wine, and for excellence. The Hiller name is known for quality, variety, great taste, and unparalleled customer service.

Hiller’s is the place for people who absolutely love food and whose desires run from the conventional to the most obscure. You’ll find it all under one roof.

Add Hiller’s to your list of Very Important Places.

Welcome to the way it should be.

Not a bad description, is it? And Jim Hiller isn't afraid to infuse his personality into the operation of the stores, which is another aspect of independent food retailing that's interesting -- the ability to personalize the business, putting a local face on the stores.

Hiller's also does what the most successful independent grocers do best -- adapt to the times. The eight-store independent is doing just that in economically-challenged Michigan. Among the things its doing are slashing prices on nearly every item in its stores from 10% -to- 60%, having met with every one if its 1,000-plus vendors and negotiated special pricing deals which the grocer is passing on to customers dollar-for-dollar in its stores.

Hiller's also is putting an greater emphasis on buying and selling Michigan-made products, offering what is the most extensive selection of local food and grocery products in the state.

Erica Finley, a writer for the Oakland Business Review in Oakland County, Michigan has a profile of Jim Hiller and Hiller's Markets in yesterday's online edition of the publication. In her piece she interviews Jim Hiller and lets him describe his business philosophy and what the optimistic, aggressive but yet humble independent grocer is doing to survive and even thrive in the current economic recession, which is hitting his customers in the Metro Detroit region, where the Hiller's stores are located, just about as hard as people can be hit by a severe economic downturn.

Below is the profile by Erica Finley from the Oakland Business Review:

Jim Hiller, CEO of Hiller's Markets, talks about commitment to customers, community
by Erica Finley Oakland Business Review
December 22, 2008

His family's grocery store chain was just named Independent Retailer of the Year by Grocery Headquarters Magazine. He's slashing prices in his stores but maintaining the quality of the products in the worst economic environment in many years, and he's committed to giving back to the local community.

Click here to read the entire profile piece.

Independent Grocer Memo: National Grocers' Association Asks President-Elect Obama to Look Out For Independent Grocers When He takes Office in January

Independent Food & Grocery Retailing USA

The National Grocers Association (NGA), the trade association for America's independent grocers, has sent a letter to President-elect Barack Obama requesting the new administation maintain a "level playing field" for U.S. independent grocers by enacting a federal economic stimulus package, supporting strong enforcement of federal antitrust laws (including the Robinson-Patman Act), supporting "fair" employer-employee legislation and supporting new federal legislation of credit card interchange fees.

The letter was sent to the President-elect last week, according to NGA president and CEO Thomas Zaucha.

In its letter, the NGA also offered some specific suggestions to the incoming President, who will be sworn into office on January 20, 2009. Those specific suggestions include decreasing corporate tax rates, or the taxes on individuals operating as subchapter S corporations or other pass-through entities. Most independent grocer members of NGA operate family or privately-owned supermarkets, hence this being an important issue to the trade group.

Regarding the inactment of an economic stimulus package, which President-elect Obama is talking about doing to the tune of $600 billion up to nearly $1 trillion shortly after he takes office, the NGA's letter says any such package should extend the current expensing and bonus accelerated depreciation legislation enacted by Congress and President George W. Bush, which is scheduled to run out if not renewed next year. Such provisions are beneficial to privately-held companies, such as the majority of those that comprise the independent grocer association.

From these more routine suggestions, the NGA's letter gets more interesting, touching on issues that are sure to be in conflict with policies of the incoming President and his supporters.

In its letter to President-elect Obama, the NGA argues for relief from the Federal Estate tax for its members, the majority of which operate family or privately-owned supermarkets, as we mentioned earlier. Estate tax relief and the outright elimination of what it and others have called the "death tax" (taxation on inheritance from one family member to another) has been one of the trade association's hot button legislative issues for decades. The amount of money (the threshold) in which estates are taxed was raised under the Bush Administration, with support from many Democratic members of Congress. However it appears the NGA wants even more relief for its members.

The letter to the incoming Democratic President also warned against inacting "over-regulation that can increase labor costs."

Additionally, In the letter to President-elect Obama, the NGA says it opposes mandates for paid sick leave, increased minimum wages, punitive civil penalties for employment law violations and expansion of employment discrimination laws. A pretty healthy laundry list we must say. President Obama has indicated he favors legislation on all four of these issues. Based on its letter it appears the NGA and the incoming administration are at odds on all of these matters then. But if both are willing to comprise they might be able to work something out?

The independent grocer's association also includes a "big issue" in its letter to the new U.S. President, writing that it opposes the Employee Free Choice Act., and a provision in the legislation called "card check," which would replace the current secret ballot method in which employees vote for unionization in secret, with a simple card in which the employees of non-union companies, including those who work for non-union supermarkets, could merely check "yes" on a card if they desire union representation.

It's not so much the actual checking of the card the NGA and others, including the U.S. Chamber of Commerce, oppose about the "card check" provision and the overall Employee Free Choice Act -- which passed the U.S. house of Representatives last year and just lost in the Senate in 2007 by a couple votes and is supported by President-Elect Obama -- it's the fact the legislation makes it much easier for workers and unions to organize, compared to the current system, that they strongly oppose.

In fact, the NGA says defeating the Employee Free Choice Act is its number one legislative priority for 2009, a top priority it shares with numerous other trade associations and U.S. corporations and small businesses. [Read more about the association's top legislative priorities here.]

However, the Employee Free Choice Act happens to also be the top priority for 2009 of organized labor -- getting the legislation passed that is. And, since organized labor was a key force in getting President-elect Obama elected, they have a strong ear in the incoming President, who says he supports passage of the act. Obama supported the act as a Senator in 2007 as well. He also sopported the act during his campaign for President.

Additionally, there is overwhelming support for the Employee Free Choice Act and its "card check" provision in the Democratically-controlled U.S. House of Representatives. House Speaker Nancy Pelosi has said she will bring the legislation up for a vote in 2009, adding that it will pass in the House by "even more than it did in 2007."

There also is majority support in the U.S. Senate for the Employee Free Choice Act. The legislation failed last year by only a couple votes. Since then the Democrats have picked up additional Senate seats in the 2008 election. They have about 58 seats so far and could add another depending on the outcome of the contested Senate race in Minnesota.

The Senate needs 61 votes to prevent a filibuster on the legislation (and on any legislation) by Senate Republicans. It's expected that with 58-59 Democrats voting in favor of the legislation (that assums all will vote in favor which isn't a given), plus the ability to pick up the two Independents in the Senate, plus a moderate Republican or two, like the two moderate Republican Senators from Maine for example, the legislation could pass the Senate with a filibuster proof majority.

It won't be easy though -- and corporate and trade association lobbyists have already started their campaigns against the legislation, even before the new President and new Congress takes office and even before new Employee Free Choice Act legislation has been introduced. It's called a premptive attack.

Lastly, the NGA letter urges the President-elect to make sure federal anti-trust legislation is strongly enforced. The trade group is concerned about any potential concentration of business among supermarket chains in the U.S. in terms of such actions posing a unfair competitive advantage to its independent grocer members. This includes wanting strict enforcement of the Robinson-Patman Act, which prevents price discrimination and related anti-competitive behavior. It's often been applied in food retailing mergers and other related issues of direct interest to the supermarket and grocery industries.

Some might say the trade group is pro-government regulation and legislation as long as it benefits it members, but anti-government legislation and regulation if it hurts its members. Such an argument is essentially correct -- not just for the NGA but for every trade association and interest group in Washington, D.C. This is how business is done in the nation's capital today. Competiting interest groups that are against government intervention of any kind on Monday are all for government regulation -- new laws, financial bailouts, ect. -- on Wednesday, depending on which of those two days their members' interests are being served.

Welcome to Washington, D.C. President-elect Obama. That's right, you've already been in the capital for a few years as a U.S. Senator. So you know how it all works.

Meanwhile, Mr. President-elect we do suggest you look out for the nation's independent grocers as they are a vital and dynamic part of food and grocery retailing in America. They are among the innovators. They are the home town folks -- the grocers who serve and give back to their communties the most generally. They also serve as the idea factory for the entire industry. If you see something a big chain is doing that's innovative, it's likely they got it from an independent.

Of course independent grocers, like all of us, need to look at the bigger picture as well. For example, the NGA might want to eliminate the estate tax completely. But we suggest that money might be needed to pay for all the corporate bailouts the Bush Administration is doing in its remaining days. Some of it also might be needed to feed the growing number of out of work and hungry Americans.

Don't forget NGA, it was the massive deregulation under President George W. Bush, who you supported twice, that is costing American taxpayers, including your member companies, trillions of dollars to bailout the financial institutions and now the Detroit automakers.

Great call on supporting President Bush twice by the way NGA -- he sure is an economic conservative, isn't he? The latest tally looks like he will be credited as being the biggest spender as President since LBJ and his great society. At least U.S. society got some benefits from LBJ's blank checks though. Mr. Bush leaves the country broke and in near-depression. The guns are in need of being replaced and there's very little butter. (Just rubbing it in a bit -- we all make bad calls; but twice?)

It's all about compromise though. Right NGA? Right Mr. President-elect? We need to do much of that in 2009 in order to get the country back on its feet, and to create stronger consumers who have the money to support America's independent grocers, who are the backbone of America and don't ask for bailouts, just like the majority of us. Fewer demands from the left and right and all around, more cooperation -- that should be the mantra for 2009, in our analysis.

Notes:

>View the letter sent to President-Elect Obama by the NGA...NGA's campaign against the Employee Free Choice Act: N.G.A. Action Alert -- Oppose the Anti-Democratic EMPLOYEE FREE CHOICE ACT...Advertisement against: CDW Latest Print Advertisement...NGATV (its in-house Web Network) PR spot on its opposition to the Employee Free Choice Act: Watch now.

Independent Grocer Memo: Specialty Supermarket Hubbell & Hudson in Houston Texas' The Woodlands Defies Current Economic Recession

The Hubbell & Hudson upscale, specialty supermarket in the wealthy The Woodlands communtiy in Texas. [Photo credit: Gary Fountain for the Houston Chronicle.

Natural & Specialty Foods Retailing in Troubled Times

Despite the financial meltdown, credit crisis and recession, there still are plenty of rich folks in the United States. You know, the old saying: "The rich get richer." Over the last eight years that saying has been true as the U.S. has seen the greatest redistribution of wealth from the middle class to those Americans who comprise the top 5% of income earners and wealth holders in the country in recent history. Old sayings tend to become "old sayings" because they are true.

Many of the rich -- both the old rich and the new rich -- live in suburban enclaves in the U.S. These communities always seem to have names to them, which is a part of the developers' marketing scheme. Give a neighborhood a fancy name, brand it as exclusive, and those with money will follow, the thinking goes. And it most often works, assuming the community being branded as such isn't located on top of a landfill or next door to a former toxic waste site.

One of those wealthy U.S. enclaves we speak of is The Woodlands in suburban Houston, Texas USA. See, doesn't the name scream of wealth and exclusivity?

America's wealthy also need upscale, specialty-oriented grocery stores, of course. And right now the wealthy are just about the only ones shopping at such stores. The masses are jumping ship at Whole Foods Market and Dean & Delucca and sneaking over to Wal-Mart and Aldi for most of their food and grocery purchases. For example, Wal-Mart Stores, Inc.'s profits reported on Tuesday increased by 10%. Conversely, Whole Foods Market, Inc. experienced a 40% drop in quarterly profits.

We kid a bit -- just a bit -- about the rich and upscale, specialty supermarkets. Upscale supermarkets, such as Hubbell & Hudson in The Woodlands, are for everybody -- assuming "everybody" is willing to spend a higher portion of their income for food and groceries, which right now is difficult to do for many and impossible for an increasing number of American consumers.

But of course, you can still do 85% or 90% of your shopping at a Wal-Mart Supercenter or Sam's Club, Costco, Aldi, Sav-A-Lot and other discount food stores (the basics), then do 10%-15% (the gourmet stuff) of your shopping at a specialty food store or supermarket.

After all, indulgent, premium foods are far cheaper than shopping for clothes, consumer electronics or cars right now. Its also much easier on consumers' credit cards, assuming they have any credit left. And, a human has to have at least a tiny indulgence or two in this short life.

The folks who live in The Woodlands in Texas though aren't feeling the economic pains directly in our pocketbooks like the rest of us are. It's more like stock portfolio pains for most of them. If they are feeling the pains like the average American who is wondering how to make ends meet at the end of the month, they should sell their home and pocket the difference, allowing them to live a grand lifestyle in a less expensive community. Housing values remain high in The Woodlands, by the way.

The folks in The Woodlands aren't in the main trading down when it comes to food and grocery shopping either, although we bet some of them should be. And most residents of The Woodlands are still doing lots of entertaining, offering specialty, gourmet and premium prepared foods and beverages.

The Houston Chronicle has a story about the independent specialty supermarket in The Woodlands, Hubbell & Hudson, which we mentioned above.

According to the founder and CEO of Hubbell & Hudson, Cary Attar, the company is doing fine despite the current financial crisis and recession because of a number of factors, including the location of the store in the wealthy community as well as what he says is his neighborhood grocery store approach, along with stocking such a varied selection of specialty delights in the store that even the less than wealthy can't resist buying a few premium food indulgences.

Read the story, "Specialty grocer defies downturn," from the Houston Chronicle here.

As we write about often in Natural~Specialty Foods Memo, the independent supermarket sector continues to survive and thrive in the United States because smart, savvy and successful independents create niches, like Hubbell & Hudson has done, rather than attempt generally to go head-to-head with the big and even smaller chains.

For example, Hubbell & Hudson's Cary Attar says his research shows many of the stores customers make only one trip to his store for every for trips they make to a more discount-oriented supermarket. However, because he sells lots of specialty products and value-added prepared foods, all which allow for a higher market basket, he is fine with this frequency among a segment of store shoppers.

They also seek out the right locations for their niche, whether its a community like The Woodlands in Texas for Hubbell & Hudson's well-designed, attractive and well- merchandised specialty supermarket or a particular neighborhood in need of say a small-format discount-oriented neighborhood market.

Customer service is job one among successful independents. Notice in the Houston Chronicle piece how Hubbell & Hudson's founder Cary Attar talks about the importance of being a "neighborhood" market. He isn't counting on the fact he's created a wonderful specialty food emporium to carry the store through. He knows customer service with a neighborhood touch is a must for his store to succeed. We call that independent grocer humility and good horse sense.

Of course in these times it helps if you're in the upscale, specialty supermarket business to have your store or stores in a community or in communities where wealthy people live. Lots of consumers with lots of disposable income is a good thing when selling specialty, organic and gourmet food products priced at the upper end.

But to survive in this downturn a grocer must do far more than that. Without the three simple basics outlined above -- and they are far from the only elements needed to succeed -- even the finest specialty food market in the wealthiest neighborhood has no guarantee of success.

Independent Grocer Memo: Going Where A Chain Store Used to Be; Texas Independent City Market Welcomes the Opportunity

Neighborhood Food Retailing USA

The Minyard supermarket chain may have given up on its store in the Westcliff Shopping Center at 3511 West Biddison Street in Fort Worth, Texas USA because it was underperforming. But that didn't stop independent grocer Kurt Jaeger from buying the store and spending a serious chunk of change to remodel the market from floor to ceiling.

Jaeger, who already owns an independent supermarket in nearby Burleson, Texas, says in a story published today in the Fort Worth Star-Telegram, that he knew the former Minyard supermarket could be a success if remodeled and given the proper independent touch the moment he toured the empty store.

So he bought it. Took it over and named it City Market, which is the name of his first store.

In July, Coppell,Texas-based Minyard Food Stores sold 37 of its stores to Grocer's Supply Co. of Houston. Grocer's Supply is Jaeger's wholesale supplier, and he acquired the site from them.

The store has been completely revamped. Walls and murals are freshly painted, shelves have been rearranged and restocked, and several new freezer cases have been installed. The produce section has been expanded, as has the selection, and the beer and wine offerings have also grown, according to the Forth Worth Star-Telegram. Tomorrow the store celebrates a big grand opening.

You can read the story, "Neighborhood grocery returns to Westcliff area," by staff writer Sandra Baker here.

As we often write, the independent food and grocery retailing sector in the U.S. is a vibrant one. Every so often a pundit or two will state that independents are an endangered grocery retailing species. However, American independents prove those pundits wrong each and every day, opening new stores and very seldom closing existing ones compared to other types of retailers.

Despite the growth of huge supermarket chains with a near national reach in the U.S., along with the discounters like Wal-Mart, Target and Costco that do have a national presence, the independent neighborhood grocer not only continues to survive in America, most are thriving.

Most independents survive and even thrive by sticking to the basics -- and then adding their own unique touches.

On the financial side they don't generally over-leverage themselves. They tend to follow a prudent pay-as-you-go philosophy of doing business.

On the merchandising side successful independents know the neighborhoods their store or stores are in like the back of their hands. They then create and nurture a niche -- be it upscale, natural-specialty or discount -- based on this knowledge of the market area.

In terms of customer service, independents invented this concept in grocery retailing. Nothing can be to high touch for many independents, be it offering carry out service, home delivery, special product orders or other neighborhood-oriented customer services features for their customers.

Successful independents also become part of the community rather than just being a grocer that has a store in the community. And like this community focus, most successful independents also create a sense of community and family among their employees and customers.

Another very important key to the success of independents in the U.S. today is the way their wholesale suppliers work closely with the retailers, offering financing, store design services, marketing, advertising and merchandising support, and other forms of expertise and help, like Grocer's Supply is doing with Kurt Jaeger and his now two City Markets stores.

Kurt Jaeger and his two City Markets supermarkets are a good example of creating a niche, offering superior customer service and focusing on community. The independent grocer has been very successful with this approach at his City Market number one. And we have a feeling if he follows that same formula he will make his City Market number two in Forth Worth, Texas equally as successful.

[Photo Credit: Paul Moseley: Forth Worth Star-Telegram.]

Independent Grocer Memo: The Battle of the Brooklyn Independents Need Not Be a Battle; It's All About Finding and Exploiting the Niches

Neighborhood Food Retailing USA

America's neighborhood independent grocers are often faced with competition from the "big guys" when a big national or regional grocery chain opens a store in the city or neighborhood where the independent has been doing business for years.

It's less often the case that another independent food retailer moves in and challenges the more established independent grocer on its home turf in the neighborhood.

However the dynamism of food and grocery retailing in the U.S., where thousands of independent grocery stores exist and more new stores open every week, is such that this occurs far more frequently than is commonly reported or discussed.

In fact, what is usually the case is in any given neighborhood in America at any given point in time, one finds multiple independents going not only head-to-head with supermarkets owned and operated by national and regional chains but with fellow independent grocers as well.

Al Sale (pictured at top left in his store), the 54-year-old owner of Good Food Supermarket (pictured in the second half of the photograph at top, left) on Court Street near Fourth Place in Carroll Gardens, Brooklyn, New York USA, has been one of the more fortunate independent grocers in America. Mr. Sale, who with his brother, Michael, has run Good Food for 30 years, has been blessed during those three decades by not having a competitive grocery store nearby -- neither a chain unit or fellow independent -- according to a story in yesterday's New York Times.

But that all changed about two weeks ago when a new independent grocery store opened near the Sale brother's (interesting last name for a grocer by the way) Good Food supermarket in the Carroll Gardens neighborhood.

That new independent supermarket, Gourmet Fresh, has been opened in the neighborhood by a family who formerly ran a Key Food chain supermarket in the area.

Al and Michael Sale hadn't been too worried about the new store since the name, Gourmet Fresh, suggested to the brothers the store would be selling specialty, gourmet and premium foods rather than a full selection of basic food and grocery products like their Good Food Supermarket offers.

But then the trucks started arriving. Al Sale tells the New York Times when he saw products like Coca-Cola and other basic groceries being unloaded at the Gourmet Fresh Market he began to worry a bit.

It appears Gourmet Fresh is offering items that match its name. But the new neighborhood supermarket also is offering basic food and grocery items, thereby serving as a direct competitor to Good Food Supermarket.

The Sale brothers are worried. The new independent supermarket is bigger than their store. It's more upscale in design and is offering more products than Good Food Supermarket stocks.

However, if our observations over the years are correct, Al and Michael Sale will figure out, like nearly all independent grocers do, how to not only survive the new competition but also how to thrive against it. It's all about finding a niche and becoming the best at it. This is something -- adaptation -- America's independent grocers are very good at doing.

And in the case of the Sale's and their Good Food Supermarket, they may have not had competition close by in the neighborhood for 30 years. However, lasting 30 years still takes hard work and dedication.

We suggest the Sale brothers place close attention to what the new independent Gourmet Fresh supermarket is doing for a couple months. Then figure out what they do best at Good Food Supermarket -- be it service, quality, niche merchandising, pricing, ect. -- and then do it even better than they have done it for the last 30 years.

Also, the brothers shouldn't forget about all the customer loyalty they've built up over the last 30 years in the neighborhood. Maybe it's time to thank those loyal customers with a valued-shopper discount program? Or hold a customer appreciation day -- reminding all who attend that the store has been around for 30 years and plans to be around for another 30 or more years.

Additionally, since Gourmet Fresh has just moved into the neighborhood, it's likely they are paying much higher monthly rent than the Sale's, who've been in their location for 30 years. Gourmet Fresh also has start up costs involved in creating and stocking the new supermarket.

This means Good Food Supermarket is at an advantage in terms of overhead. That could mean offering a few weeks of super hot, discount price sales promotions for the Sale Brothers. Offer basic and specialty groceries at hot prices so the store's regular customers might check out the new Gourmet Fresh store but will still load their pantries with sale priced items offered by the Sale brothers. Make those regular customers a price offering they can't refuse. Have some fun with the promotion: Call it the "Sale's Sale of Sales," for example.

Good Food Supermarket can't do anything about the fact Gourmet Fresh is a larger and more upscale looking store. But the brothers can play up on the fact they are the longtime local guys; the neighborhood guys. That's a niche worth making even stronger, especially in the face of the new competition, which almost always makes a grocer better than before.

Read the complete story from yesterday's New York Times, "Trouble, Two Doors Down," here

Independent Grocer Memo: Despite Two Tesco Fresh & Easy Stores and A New Wal-Mart Marketside Store, Gilbert, AZ USA Grocer is Ready to Rock Downtown

The Phoenix, Arizona suburb of Gilbert has recently been ground zero for new retail food and grocry store openings.

On October 4, mega-retailer Wal-Mart, Inc. opened one of its first four new small-format (15,000 -to- 20,000 square foot) Marketside combination grocery and fresh foods stores in Gilbert, along with opening three more on the same day in the cities of Mesa, Chandler and Tempe.

British grocery chain Tesco also recently opened its second small-format (10,000 -to- 13,000 square foot) Fresh & Easy Neighborhood Market convenience-oriented grocery and fresh foods market in the city.

Both Wal-Mart's Marketside and Tesco's Fresh & Easy formats offer an extensive selection of fresh, prepared foods. The Marketside stores have in-store kitchens and the Fresh & Easy stores receive their prepared foods from the company's huge central kitchen in Southern California.

All this new store opening activity in by the world's number one retailer -- Wal-Mart -- and the world's third largest chain -- Tesco -- hasn't scared off Gilbert's historic Liberty Market, an independent grocery store that's been open in the city since the U.S. Great Depression, though.

Liberty Market owner Owner Joe Johnston and his partners have just completed a major remodeling of the supermarket located in Downtown Gilbert's historic Heritage District, transforming the grocery store into what Johnston calls an "urban marketplace."

The inside of the historic market features a mix of the old and new. There are modern-style clear exposed bulbs hanging from ceiling beams built in the 1930s. On the same concrete floor originally poured in 1958 sit modernist tables with smooth black surfaces.

The remodeled market features an in-store demonstration kitchen where shoppers can see what the chefs are doing through two large glass windows. Among the modern equipment in the in-store kitchen is a Vulcan Oven in which artisan pizza's are baked for sale in the store.

A major part of Liberty Market's new urban flair includes lots of prepared foods from the kitchen. There are full ready-to-heat dinner entrees and side-dishes as well as ready-to-eat grab-and-go foods prepared right in the store.

The market also features an in-store espresso bar/cafe which owner Johnson says he wants to become a downtown Gilbert social hub as well as a place where the city's many commuters will stop off on there way to work.

Professional chef David Traina is Johnson's partner in Liberty Market. He will be running the in-store kitchen, creating what he says will be a combination of basic comfort foods along with more adventurous offerings such as sweet potato salad and authentic Sicilian pizza's, among other offerings. There are fresh baked goods as well.

The market also has a retail section offering shelf-stable, fresh and perishable food and grocery items with an emphasis on specialty products.

Johnson owns three successful restaurants in Gilbert. Therefore focusing on in-store prepared foods along with retail food and grocery items in the revamped Liberty Market is a natural for both him and chef Traina.

The historic market has had four owners since it opened in the 1930's. Johnson is the fourth and says he wants to be the last.

Although he has done extensive remodeling to Liberty Market, owner Johnson says it still retains its historic core. He's referring to the historic elements such as the concrete floor poured in 1958, the 1930's wood ceiling beams and other historic elements which have been retained in the store's remodeling.

The fresh food and grocery market is part of the revitalization of downtown Gilbert and its historic district.

Johnson and Traina say they fear not the big chain outlets that have recently opened in Gilbert. They believe their upscale yet historically-grounded Liberty market and its downtown location offer residents and shoppers not only food and grocery items but restaurant-quality prepared foods items supported by Johnson's reputation as a successful restaurant operator in the city.

Additionally, It's also the only market in the downtown which has been adding various new amenities like Water Tower Park, which is slated to open next month, and the Western Canal Trail which is being completed and is scheduled for an early 2009 opening, according to Johnson.

These new public features, along with a number of new retail shops that have opened in downtown Gilbert in the last couple years, are expected to draw local residents as well as residents from outside the city to the downtown core.

Johnson and Traina say they are prepared for those new customers when they come, along with serving the residents of the entire city of Gilbert.

We like that independent spirit.

Food Retailing & Society Memo: In Philadelphia Designers Create Supermarkets of the Future; Meanwhile A Local Food Retailing Icon is Lost

The proposed concept for the Brewerytown market above avoids the traditional big-box style for a design that fits into the urban street grid and camouflages the large expanse of parking.

Natural~Specialty Foods Memo Editor's Note: Two stories, published just six days apart in the Philadelphia Inquirer USA newspaper, paint an interesting picture of the dynamic nature of the food and grocery retailing business.

As the piece below by Inquirer architecture critic Inga Saffron describes, visionary designers are busy dreaming up the supermarket of the future for urban Philadelphia.

Meanwhile, the second story by Philadelphia Inquirer staff writer Vernon Clark reports on the closing of 100-year old Caruso's Market, a beloved, small-format neighborhood grocery store.

We offer no analysis or commentary this time around. The two articles speak for themselves.

Changing Skyline: Food for thought on supermarkets

By Inga Saffron
Philadelphia Inquirer Architecture Critic

If we are what we eat, then it follows that our cities are shaped by the buildings that sell what we eat. In that case, we're heading for trouble.

After a long absence, the neighborhood supermarket is making a comeback in urban places like Philadelphia. Only the new arrivals don't look anything like the friendly local grocers we once knew. In quick succession, a gang of boxy, suburban-scaled cornucopias has moved into the thick of Philly's rowhouse neighborhoods. They've laid claim to whole blocks at 56th and Market, 52d and Parkside, Columbus Boulevard in Pennsport. And more are coming.

You might assume that the more stores that sell fresh food, the better - especially given that Philadelphians struggle with their collective weight, at least according to certain out-of-town list-makers.

The problem is that these new supermarkets tend toward obesity themselves. It's hard to overlook all that bulk when the chains dock their flagship boxes in a marina's worth of parking. And once you breach the store's solid walls, you could as easily be in Fairbanks as Fairmount.

So a competition to encourgage architects to think outside the supermarket box comes in the nick of time. The Community Design Collaborative asked three Philadelphia architects to come up with more urban-friendly structures for our modern hunting and gathering.

To keep the exercise from devolving into the abstract, the collaborative identified three sites that have already been targeted for food stores, two in Philadelphia and one in Chester. It also partnered the architects with real clients. Even if none of the three gets built, the design exercise provides the food retailers with alternatives they can chew on.

The most exciting concept was developed by Interface Studio Architects, which pulled the most ambitious of the three projects. The firm was asked to design a new full-service supermarket for developer John Westrum at 31st and Girard, in the Brewerytown neighborhood.

Westrum had been trying to bring a supermarket to the three-acre triangular lot ever since he completed Brewerytown Square, a townhouse project. But it's been difficult because the site has only the tiniest bit of frontage on Girard Avenue, the area's commercial street. The property also sits on a steeply sloped bluff overlooking the east side of Fairmount Park and the Schuylkill. You can practically see the Philadelphia Zoo on the opposite bank.

Panoramic views are nice, but what supermarkets really need is to be able to broadcast their presence to passersby. The usual box, set behind a welcome mat of parking, would be nearly invisible to motorists and pedestrians traveling on Girard Avenue. In any case, that highway model is unworthy of a grand urban street that is still a mix of townhouses and independent stores.

Interface, led by partner Brian Phillips, solved the problem in a way that goes beyond just reimagining the utilitarian supermarket; its design has real architectural heft. The proposal clicks because it acknowledges the supermarket's dual nature as a car-oriented business that happens to be located in a multifaceted pedestrian neighborhood.

Since there is so little frontage on Girard Avenue, the designers bent the main commercial structure into two angled sections that wrap their wings around the corner of 31st and Girard. The section closest to Girard would provide small retail spaces for things like a bank, and the northern portion would house a midsize supermarket.

Though their angular form breaks from Philadelphia's street-wall tradition, it compensates for the deviation by offering the neighborhood a substanial plaza that works as a pocket park. At the hinge, where the two wings come together, the plaza slides down under the buildings, providing sight lines and walking ramps to the parking lot at the low end of the slope.

Because of that sharp incline, the supermarket floor would be below the level of 31st Street. Interface turns the problem into a virtue. An all-glass facade would enable arriving pedestrians to see into the store, while a sequence of switchback ramps would move them gently down to the store entrance. Since the parking lot is at the entrance level, customers who drive would have easy access.

This jaunty arrangement solves the site's problems in one stroke. The designers use the level change to screen the parking lot from the neighborhood. Meanwhile, the swooping roof becomes the building's can't-miss sign.

And by splitting the commercial structure into two sections, Interface avoids the bulkiness of the box. With their glass facades, the structures resemble park pavilions, which is what they are, since they overlook Kelly Drive.

Like Interface, the other firms that participated in the design exercise, Agoos Lovera and KSS, recognized that supermarkets are about more than just food. They're neighborhood anchors. Interface included housing at the north end of its site. The supermarket's sinuous roof winds around, jumping onto a third structure that would contain loft apartments.

Because the other projects involved retrofits of existing buildings, there was less opportunity for the designers to reinvent the supermarket form. Nevertheless, in its three-stage scheme for turning an Ogontz Avenue rowhouse in West Oak Lane into a satellite for the Weavers Way food co-op, Agoos Lovera sketched a plan that includes a meeting room, a demonstration kitchen, and a community garden. KSS came up with a nearly identical program for an old furniture store on Chester's Avenue of the States, purchased by a Chester food co-op. In the future, they believe, food stores will be community hubs.

At the moment, most people see supermarket shopping as a necessary chore. But who knows? If these designers can open the eyes of store operators, we just might start to look forward to the weekly shopping trip.

Caruso's Market closes in Chestnut Hill
By Vernon Clark
Inquirer Staff Writer, October 1, 2008

It was a boutique grocery that specialized in quality meats and produce, and that anchored the Chestnut Hill shopping strip for nearly a century.

Last month, Caruso's Market, 8418-24 Germantown Ave. (pictured above), closed abruptly, leaving many residents recalling bygone days of personal service and a family-friendly atmosphere, and wondering what will become of the property.

Fran O'Donnell, head of the Chestnut Hill Business Association, lamented the loss.

"I think the closing brought great concern to the community as far as being a fixture there, but also as a necessity," O'Donnell said. "It's not like another retailer. This is servicing what you put on your table."

Ellen Maher, 78, who has lived most of her life in Chestnut Hill, was a regular shopper there for decades.

"It was always a very nice market," Maher said. "They did delivery service. It was an alternative to the supermarket. My husband and I always walked to Caruso's."

Residents said the store's windows were covered with brown paper on the night of Sept. 15 and a sign posted that read, "Closed for repairs." A day later the sign was replaced with one saying, "Sorry for the inconvenience. Reopening soon."

The next day the sign was changed to "Sorry for the inconvenience. Closed until further notice."

CMS Cos., an investment company in Wynnewood, issued a statement saying that John Capoferri, the market's operator, "had terminated the Caruso's Market lease," making way for a CMS affiliate to take control of the property.

Capoferri did not respond to several phone messages left for him.

Capoferri bought the 10,000-square-foot building in the spring.

The market was operated for decades by the Marano family, owners of a South Philadelphia pasta business, said Joe Marano, who operates Marano's Fort Washington Garden Mart.

Marano said Caruso was the name of relatives who opened the market in the early 1900s.

"Despite attempts over the prior several weeks to work with Mr. Capoferri to help restructure his financial obligations at the property, we concluded it was in our investors' best interest to take control of the building," said Richard T. Aljian, a CMS official.

He also said the company was preparing the building for "re-leasing, with a grocery-store concept remaining a potential strategy."

O'Donnell said residents want another grocery at the site.

"I think in a community like this, there has to be an outreach to make sure that it stays just the same use," O'Donnell said. "Whether it's Caruso's or not, we want it to still be a food market."

Paul Dodge, owner of the French Bakery on Germantown Avenue, said the closure was a major blow to the community.

"So many older people really rely on the local businesses," Dodge said. "A loss like this is devastating. Who can open a grocery store?"

Dodge said that at the holidays, customers would flock to the store.

"On Thanksgiving they had hundreds of turkey orders," he said. "Caruso's Market was like a dinosaur in many ways."

Philip LeCalsey, an official of the Chestnut Hill Community Association, said that many in the neighborhood want the market to be replaced by one similar to Caruso's.

"Having a neighborhood grocery for such a long time . . . has been a big asset to Chestnut Hill residents," LeCalsey said.

He said he had been a regular customer at Caruso's.

"I was in there usually twice a day, getting coffee in the morning and getting lunch," he said.

Marie Chiodo, who has lived in Chestnut Hill for more than 50 years, worried about the future of the store.

"It was very convenient," Chiodo said. "Now, who knows what's going to happen? I hope they come back and reopen."

Standing outside the store with her infant daughter, Tessa, in a stroller, Katie Maier, a Chestnut Hill resident for about 31/2 years, also regretted the closing.

"I think it's a shame that it closed. There is nowhere else here where I can go to get a few things," Maier said. "I was here last week and ordered a roast. They said the butcher was going to call me, and the next day they were shut."

Independent Grocer Memo: Same Store, New Name, Same Harold

Guest Memo

By Kristina Jarvis

The Prince Albert Daily Herald - Prince Albert, Saskatchewan, Canada

September 29, 2008

Harold Guy (pictured at left with his son and partner Byron) has seen his fair share of changes since opening his grocery store on 28th Street East 38 years ago.

He's been through several distributor and wholesaler changes. He saw his store burn down in 1992, only to be rebuilt in 1993. He also saw the store through a change of ownership, when his son Byron bought it in 1998.

But one thing has always remained the same - the service.

"We've always been about high service," he says. "The sign is probably less important than the Harold's name, Harold's is the constant"

Harold's recently changed its name from "Harold's IGA" to "Harold's Family Foods," a shift motivated by the need to maintain the store's independence. The move takes Harold's away from the Sobey's brand and towards MacDonalds Consolidated, part of the Safeway grocery company. MacDonalds provides brand and Safeway specific labels to its stores, including the "O" Organics line of groceries.

Harold says there were no hard feelings between the store and Sobey's about the switch, and says that the new wholesaler is one whose values are closer to the store."

In reviewing different flags, or banners, we found that the Family Foods banner suited our independent needs," he says. "The name too, Family Foods, it's kind of who we are. It's a family dealing with families and relationships over the years."

George Marchildon and his wife, Roxanne, don't seem to mind the name change. They've been customers for 20 years, and say their only concern is the service.

"We don't have to agree with it. As long as they're happy and the service stays the same, we're happy," he says. "It's still Harold's as far as I am concerned."

Marchildon works as a distributor for Pepsi to many stores in Prince Albert, including Harold's, and says he appreciates being treated as an ordinary customer when he goes on his days off to shop."

When I shop here, they treat me like a customer," he says. "When I shop somewhere else, they treat me like the Pepsi guy."

"It gets to be a problem," adds Roxanne. "When we're out in a store and just because he works for Pepsi and they're out of Pepsi, they'll come bug him instead of letting us go out and have our family time."

In the end, Harold says that it comes down to what the store needs to survive.

"You have to pay your bills and you're all alone at it so you have to do the best you can to maintain and to employ the people you require to do the best job for your customers," he says. "Everything we do starts and ends here."

Byron says there are plans to host a grand re-opening once the store has completed its renovations.

Natural~Specialty Foods Memo Editor's Note: Safeway Stores, Inc.'s private label relationship with Macdonalds Consolidated in Canada (see italics in the story above) is part of Safeway's strategy to market its O' Organics and other brands -- Eating Right, Safeway, Lucerne -- beyond its own Safeway stores in the U.S. and Canada, as we've reported on and written about in numerous stories. You can read a selection of those pieces from the blog here and here.