“Despite high unemployment, inflation and other challenging trends, opportunities have never been greater for Spartan Stores and our retail partners,” declares Alan Hartline, EVP of merchandising for the Grand Rapids, Mich.-based “hybrid distributor” that he says is laser- focused on thriving in a multichannel world replete with warehouse clubs, drug chains, alternate formats and other multistore supermarket rivals.
“The importance of aligning strategies with trends will allow us to not just compete, but [also] to win in a multichannel world,” continues Hartline, and nowhere is it more important than with fresh foods and floral, which he says collectively remain the critical components of true differentiation for Spartan’s corporate and independent stores. “Under the Fresh
Umbrella”.
Motivated by a fresh-first philosophy for Spartan’s 350 independent grocery customers in Michigan, Indiana and Ohio, and its 96 corporately owned Family Fare, Glen’s,D&W Fresh Markets, Felpausch Food Centers and VG’s banners, the company strives to maintain a robust fresh foods mindset as the primary platform from which everything else flows. “There are so many things we can do under the fresh umbrella to make an impact… from grinding fresh beef throughout the day to having attractive displays of a variety of fresh breads and rolls when the consumer shops. It’s imperative that we offer fresh, quality products to capture sales and stay competitive,” notes Hartline.
A crucial means of driving home those objectives – and several other related strategic ones – with both its corporate stores’ retail associates andindependent grocers were two recent events Spartan hosted, for which Hartline served as the chief architect. In mid-October, Hartline and his fellow merchandising and procurement teams presented a two-pronged Model Store event that showcased a variety of new products, merchandising concepts and marketing strategies revolving around Spartan’s key ongoing differentiation initiatives, including value and private brands, as well as demonstrations of how value-added merchandising strategies and consumer-driven solutions can drive sales.
Focus on the In-store Experience
An integral part of the event, according to Hartline, was a tour of a recently reopened Family Fare store on Kalamazoo Avenue in Kentwood, Mich., which underwent a $6 million makeover that has resulted in a new concept design featuring dynamic product displays, demo stations, bold new signage and a host of creative merchandising and promotional ideas that Spartan retailers can incorporate and use in their own Stores.
The second leg of the event switched venues to DeVos Place in downtown Grand Rapids for Spartan’s Fresh Experience perishables selling show, which highlighted a variety of new concepts and products alongside educational breakout sessions that enabled attendees to gather insight, ideas and information about departmental-specific strategies and innovative fixtures and equipment for the deli, bakery, produce, meat, seafood and floral sections. “We set up stations in each of the respective departments that we infused with syndicated data to show how the business trends we are seeing can help blunt competitive activity and better enable them to compete,” explains Hartline.
Aside from emphasizing the fundamental need for “sharper procurement practices and how to best convey value to consumers” amid a challenging economic cycle and cutthroat competition, “We’re concentrating heavily on the in-store experience,” says Hartline. “Customers get their invitation to visit our storeson a regular basis via the ad, but the more pressing issue before us is: How do we maximise the value experience once they’re inside our stores?” Having spent considerable time during the distributor’s recent events “talking about cost of goods in today’s environment that has made it very difficult to raise retails to enhance margins,” Hartline says, “the only way to continue to achieve margin objectives is to either change your mix to private label, or lower your cost of goods.” To that end, a series of recent improvements made with Spartan’s procurement processes in several areas has paved the way for enhanced margins and more traffic, he notes.
“As the share of the food-retailing pie continues to become fragmented, we need to better leverage ourselves,” says Hartline, noting the dramatic payoff that’s come about as a result of Spartan’s investment in its privatebrands portfolio. “We’ve spent a lot of effort over the last year building the Spartan brand around the perimeter,” which he adds had heretofore “really lagged. We put a concerted effort in place to aggressively brand our produce, meat and deli items,” thereby enabling the grocer to lower its cost of goods.
For instance, after eliminating a branded chicken program in favor of its own signature brand, “We cut over $1 million out of our cost of goods in the process,” Hartline points out. “We were also playing catch-up in some other departments, like deli with signature items. So, it’s not only about the cost of goods, but also value and our quality-first proposition” that’s predicated on having the right product..
“Customers are a lot more selective with the fresh categories,” Hartline says, affirming that achieving a certain quality threshold is a nonnegotiable consideration. “Consumers will try anything once, but if they don’t have the right eating experience, [the unsuccessful trial] will produce the opposite results we are seeking to achieve by hurting us negatively from a differentiation standpoint.”
Going Private
As a value-added distributor, Spartan relies on private label as a crucial component of its offerings to “strengthen both our relationship with end consumers and independents,” explains Hartline. “The unique thing about being a hybrid wholesaler and retailer is that while we can engender loyalty with the end consumer, we can also do so with our retail customers. We’re very proud of the quality of our private brands, and have in turn made a concerted effort to demo and sample a lot of them” more often.
While Hartline and his chief fresh foods merchandising cohorts have been working diligently to increase the destination appeal of Spartan’s related departments, produce and seafood have especially exciting potential to expand their appeal in light of their related value and nutritional attributes. Interestingly, Hartline has been particularly pleased with Spartan’s “floral numbers, which have been very good. In spite of customers’ tightening up [of ] their budgets, having the right product on display at the right price has proved that even in a dreary economy, customers are still willing to enrich their lives with floral products, so we are very pleased to celebrate the success we’ve seen in that area.”
Spartan is also seeing similar success with its “Meals Made Easy” program, launched earlier this year, that comprises bundled dinner ingredients to feed a family of four for about $10. While Hartline says it’s a concept that many food retailers around the country have embraced in the past 15 months to court an increasing base of customers who are choosing to eat at home, “for the most part, a lot of folks do a pretty good job of touting it in the ad. But bringing it to life at store level is really what we’re aiming for.”
At the heart of Spartan’s Meals Made Easy program, he explains, is “a multi-temperature fixture on an end cap that allows all mealtime items to be brought together within the different temperature states, so customers don’t have to run to the various departments for the meal components.” Positioned across from the self-checkout aisles in front of the store, the setup is ideal “for consumers looking for quick and easy meals,” notes Hartline. “They can grab and go, and shoot out the self-checkout in arguably less time than they could at a 7-Eleven.”
A centre-of-the-plate protein headlines the set, along with a companion recipe, a fresh produce tie-in and a centre store dry item to complete the easy dinner solution. “Each and every week, three meals are available, and we’ve just now started to infuse the program with our staff nutritionists’ input. Not only do people want to save time and money, [but] they also want to eat healthier homemade meals.”
Spartan’s staff nutritionists also played a pivotal role in bringing its new colour-coded labeling system to fruition for its multi-banner supermarkets. Consisting of more than 16,000 products that are clearly identified with a colour-coded labeling system via criteria supported by FDA guidance, the products are flagged accordingly as follows: lowfat (orange); low-sodium (tan); highfiber (teal blue); gluten-free (green); sugar-free (purple); and low-calorie (yellow).
While there have been many nutritional labeling programs launched in the past 18 months, Hartline says, “Realising that we might be a little biased, we think this is one of the best programs out there. And as a value-added distributor, it’s available to our independents that are interested in accessing a turnkey program” that can further engender shopper loyalty.
