By Eileen Dallabrida
At Lloyd’s Market in Lewes, shoppers are thirsty for soy milk.
“We know there’s a demand for it because we have a number of customers who have requested it,” says Lenny Pollitt, son-in-law of owner Lloyd Purcell.
The challenge is finding shelf space for new products in a small store. For Pollitt, the solution is offering lots of products, but fewer brands.
“There are 10 brands of soy milk and we don’t have room for them all,” he says. “So we carry two brands.”
In addition to feeding customers, independent grocers focus on listening to them. Pollitt and other indies say that is what sets privately held markets apart from big corporate chains.
“We pride ourselves on pleasing customers with special cuts of meat and the things they can’t easily find anywhere else,” he says. “We have one customer who asked us to order her favorite soap because the drugstore didn’t carry it any more, which we were happy to do.”
In a marketplace fat with choices, independent grocers are intent on getting their piece of the pie. In Delaware, the indy slice includes 39 supermarkets which generate $359.79 million in annual sales, according to the National Grocers Association (NGA), a trade group based in suburban Washington, D.C. NGA tracks markets with sales of $2 million a year or more.
NGA says indy grocers are responsible for 4,550 jobs in the First State, which includes store employees, as well as workers in businesses that serve market owners, including providers of equipment, real estate, supplies, technology and transportation.
“Independents are holding their own, despite the challenge of rising costs,” says Peter Larkin, NGA CEO, noting that expenses for employee healthcare benefits increased 7.6 percent in 2012. “They succeed by being nimble, by adjusting quickly. With a big chain, decision making can be a lengthy, complicated process.”
In the food business, there’s no such thing as a free lunch. Larkin says many family-owned indies are faced with succession issues when no one in the next generation wants to mind the store. Even when there are interested heirs, there’s no guarantee everyone will get along.
Solutions include selling the business to employees or hiring a manager to run the business.
“At a store owned by employees, there is a built-in incentive to do well,” Larkin says.
Currently, fewer than one in five full-service markets is independently operated, according to a survey by Progressive Grocer, a trade publication. Chains own 82.26 percent of markets; independents own 17.74 percent.
Chains also ring up bigger tickets, capturing 94.3 percent of sales, compared to 5.7 percent for the indies.
Currently, conventional-format markets account for only about two-thirds of food sales — 65.65 percent — with warehouse clubs, convenience stores, gourmet specialty retailers and military commissaries gobbling the remaining third.
Many indies succeed by focusing on a niche.
Willey Farms in Townsend is a destination for locally sourced produce and baked goods. Witt Brothers Market in Wyoming is known for its meats. Byler’s locations in West Dover and Harrington cater to the speciality baking crowd, offering more than 30 types of flour. Yong’s Oriental Food Mart in Elsmere sells kimchi and other Asian favorites. Zingo’s Market in Newark offers such niceties as an in-house coffee bar and full-service post office.
At Janssen’s Market in Greenville, the owners are beefing up the bottom line by diversifying services. The store doubled in size to 18,000 square feet in 2007 when it moved to a nearby site vacated by a competitor. In addition to groceries, the business offers a bountiful prepared food service, as well as catering and a cafe.
To jump start holiday catering sales, Janssen’s held a storewide tasting with multiple carving stations, a lavish dessert table and gourmet dog treats.
“It’s a great way to interact with customers and gather input from them,” says Joe Janssen Jr., whose father founded the market in 1952.
Janssen and his wife Eileen already have a succession plan in place. Their daughter Paula, who holds an MBA from the Wharton School, already manages day-to-day operations.
At Lloyd’s, the owners are boosting revenue by better utilizing resources. During the holidays, the store’s chicken rotisserie runs ‘round the clock roasting special-order turkeys.
“People order months in advance because there’s more demand than we can actually handle,” Pollitt says.
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