Progressive Grocer Independent

JUN 2016

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Business 40 | Progressive Grocer Independent | June 2016 hardware, a branded concept isn't absolutely necessary, Myers says, "but I don't think you're going to get the same efect as if you were to be a full Ace Hardware store. I think you'll still get some incremental sales, but it's going to be because somebody happened to walk down the aisle and see it." A branded program also enables Myers to attend buying shows with educational programs and online training, since hardware is a com- pletely diferent animal from grocery. "You just can't throw the paint on the shelf and hope it sells," Myers coun- sels. "You have to be able to mix the paint." A branded program ofers that training, as well as training in com- mon household repairs about which customers often ask questions. "If you're just going to add a little bit of hardware here and there, don't have expectations that you're going to see gigantic sales increases on the gro- cery side or big increases on the hardware side," Myers adds. "If you're go- ing to get into hardware, make sure you get into it all the way. Tat's what I've learned." Compatible Concept Store-within-a-store con- cepts can be very success- ful, whether it's hardware or another category, but sometimes a whole new concept in a new trading market is what's needed to add sales. When RF Buche, who operates six Buche Foods in South Dakota, wanted to expand, he hit upon the idea of Buche's Bargain Butcher, a price-impact meat store. Bargain Butcher ofers both fresh and frozen meat in a 3,800-square- foot location in Sioux Falls, an area that Buche didn't operate in previ- ously, but which had the population to support a limited-assortment concept. A lot of the product sold in Bargain Butcher is near the end of its shelf life, so Buche's team immediately freezes it. Customers then buy it fro- zen, with the understand- ing that it needs to stay that way until they use it. "In our traditional grocery stores, we have fresh meat, produce and everything else," Buche notes. "Tis product is substantially diferent than what we're ofering at our regular grocery stores." Te concept is new for Buche, as is the way he has to source the products. In his traditional supermar- kets, he's very loyal to his distributor and suppliers. However, with Bargain Butcher, he has to source product from wherever and whomever he can get it. Suppliers don't always have product, so Buche hired an assistant merchandising manager to get the word out that he's interested in buy- ing limited-shelf-life products at a reduced price. "I will negotiate the price somewhere between 25 and 50 cents on the dollar," Buche says. It's a win for both parties, as the supplier can't sell the product to traditional retailers, and Bargain Butcher needs product to sell. While Buche thought he knew the type of customer the concept would attract, he's been surprised at who's shopping Bargain Butcher. Instead of the value-minded, lower-income customer he expected to attract, Bar- gain Butcher's primary customer is more middle-income. Te stores also ofer some fresh products, something Buche hadn't planned on ofering, but added to meet customer demand. Whether it's a new type of food concept, hardware or expanding into the bar business, independent grocery retailers have been highly proactive in trying new concepts to keep custom- ers coming into their businesses and to grow sales. PGI "In our traditional grocery stores, we have fresh meat, produce and everything else. [Bargain Butcher's] product is substantially different than what we're offering at our regular grocery stores." — RF Buche, Buche Foods Nontraditional Sales

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