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[9 comments]

Rouses' Gulf Coast Success Story

September 24, 2010

By George Anderson

Listen to an in-depth interview with Allison Rouse of the Rouses' supermarket chain. See the RetailWire Podcast below...

Rouses, based in Thibodaux, Louisiana, is something of an exception to the rules of modern grocery retailing. The family-owned business is successful and growing in an environment increasingly dominated by large chains.

Allison Rouse said the chain has survived tough times brought on by both natural and man-made disasters by adhering to the values handed down by Anthony Rouse, her grandfather and the chain's founder who passed away in March 2009.

Ms. Rouse spoke to RetailWire close to the time of the fifth anniversary of Hurricane Katrina. While many others have yet to rally to the aid of New Orleans post-Katrina, Rouses has chosen to open its first urban store in the city's downtown in the former Sewell Cadillac Building.

"We think it's going to bring new life to that area of New Orleans," said Ms. Rouse. "The Superdome is a couple blocks away, so we're excited for game day. The area doesn't have a grocery. [Locals] have to travel from their homes in the warehouse district to go get groceries. This will be more of a neighborhood market, which is something that that area desperately needs."

A more recent calamity, the BP oil spill in the Gulf, has also tested Rouses.

"The oil spill has really impacted us in that we are known for our local seafood. ... A lot of fishing waters were closed right away, especially in our little corner of the world down in southeast Louisiana. The western waters were still open so we still had seafood supply from the Gulf," she said. "We just really had to educate our customers that the seafood is safe. We are looking where it's coming from. We know which dock it comes from, which fisherman brought it in and also have tests in place on the dock and at the store so that there's no tainted seafood in our stores."

Keeping things personal is key to Rouses' success.

"We feel that going to the grocer is kind of a social thing for a lot of people in southern Louisiana because we love to cook. We love to go and socialize and see your neighbors and see the people you went to school with," said Ms. Rosue. "We feel like our employees are like a family. And they see people they know coming through the checkout lines, going through the departments."

While most of the magic happens in-store, Rouses is looking to expand the influence of its brand. The company uses social media, including Facebook and Twitter, to communicate with its shoppers, but also to get feedback to improve its performance. The company, which has been shipping king cakes around the continental U.S. for many years, is also looking at ways to take greater advantage of e-commerce opportunities.

"We're starting to ship some of our specialty items. We're kinda going slowly into that to make sure we do it right," said Ms. Rouse. "A long-term goal, but hopefully it will be a short term goal, very soon, is to provide a more in-depth online shopping experience -- to get the store mapped, and people will be able to shop online and pick up groceries and, in some areas, be able to deliver just an everyday grocery order. One step in between, there will probably be our catering and party platter items, just as a step towards that goal."

Discussion Questions: What most impresses you about Rouses' approach to retailing? Are there lessons from the Rouses' experience for other grocers?

Discussion Questions:

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How good are food retailers, in general, at turning grocery shopping into a social occasion?

Comments:

The most impressive thing about Rouses is that they start by engaging with and becoming a part of the community that they serve, not only with a family approach to staffing, but in their support for local suppliers. Close behind this is there decision to go into central NO to provide the community with something that they need but do not have. This level of engagement and commitment to an incredibly tested community will surely be rewarded.

Bill Emerson, President, Emerson Advisors

As an analyst that works extensively in the Gulf region, I could go on forever about Rouses. As far as I know they are the largest Louisiana store chain and they capitalize on that fact. They have one of the highest sales per square foot of conventional stores in the south with their French Quarter location. It's tiny and has no parking but is highly productive. They also run large, high-volume upscale units. They succeed where the chain stores couldn't because they know their market when it comes to the unique Cajun diet. I'll admit I'm one of their online King Cake customers. Another area they quietly succeed with is with boats and barges from all over the world that re-supply their galleys with thousands of dollars worth of groceries.

There is a lot of growth potential for Rouses. Eventually I see Winn-Dixie pulling out and there will be sites available, particularly in Baton Rouge. I think if Rouses moves away from C&S and back to AG Baton Rouge, they will have fewer supply chain issues. New Orleans is still under-stored and is one of the country's fastest growing areas. The local economy is always hopping along, unfortunately from disaster recovery, but still hopping. Wal-Mart has already done their damage. Limited assortment stores can't compete in a Cajun climate with their cookie cutter stores void of local products. I see growth in online sales as consumers become more aware of Cajun specialties. Other than Wal-Mart, who is their major competitor, Winn-Dixie? How lucky can you get?

David Livingston, Principal, DJL Research

Rouses is a great example of a regional chain that maintains and grows its share of market against national chains in its own back yard. Other examples include Schnucks in St. Louis, Hy-Vee in Iowa, and Harris-Teeter in the Carolinas. These "regionals" are successful because they embrace their communities, provide the right SKU assortments for the local flavor, and they use their size as an advantage for flexibility, focus, and faster decision-making.

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David Biernbaum, Senior Marketing and Business Development Consultant, David Biernbaum Associates LLC

What a great way to end the week! A feel good story about a grocery chain in an area needing feel good stories. I had not heard of Rouses before reading the article. Now that I have, and am aware and I can tell you I will be doing some research on them.Here is a company that puts community first. They went out of their comfort zone to insure they were serving their communities and helping to get them back on their feet.

I applaud them and hope they continue to set the bar so others get the message and follow in their footsteps. This is not only a success story about Rouses. It is also a success story about the Gulf Coast; an area deep in need of more successes.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

Rouses is walking the walk, meaning that they are willing to invest significant resources to open a physical store in an area of town that needs the service.

This is a demonstration of corporate philosophy put into action and consumers will reward them for it. This corporate behavior can be emulated by other grocery chains if they want to do so.

Other aspects of what Rouses is doing demonstrates their close ties to the community (relationships with local fisherman and mail order/ecommerce sales of specialty products). Not every area of the country has elements to leverage to this extent, but almost every area has something "special" that represents the local community. Grocers should work harder to connect with the local areas they serve as this would be a good defense against pure price-driven competition.

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Bill Hanifin, Managing Director, Hanifin Loyalty LLC

I share Ed's elation in this feel good story, and of course I wish Rouses all the success in the world (happily, for once, someone isn't in desperate need of good luck). But I'm not sure what broader lesson can be learned: certainly Louisiana is the epitome of unique--geographically, culturally and gastronomically unique--and if a niche player can't do well there, they can't do well anywhere...but sadly, there aren't many areas like that (Or are there? Maybe I'm just not seeing them).

'notcom'

Rouses, much like Publix, Central Market, Trader Joe's, Wegmans, Harris-Teeter, and a few others are grocers where you hear people say, "I wish we had one of those here." Speaking for myself, I wish we had a Rouses here. I too have ordered their king cakes over the years and plan to keep on doing so. Would be great if I could order even more local/regional goods from their website.

'retailveteran'

I commend Rouses on so many fronts. A few years ago, they acquired 18-20 Sav-a-center locations from Great A&P, including the famed Royal St. location in the French Quarter.

With only Winn-Dixie being left as the out-of-town chain, if WD decides to vacate as well, Rouses will be King of all New Orleans, becoming the main supermarket supplying various local food products to the New Orleans market.

Quite a success story they have become, after facing and confronting all that adversity from Hurricane Katrina.

'weo'

I absolutely love supermarket stories like this. It reminds me of the great independent store owners I worked with while employed by Fleming Foods and SuperValu. The trick for Rouses, clearly, was maintaining their personal touch in nearly forty stores. That borders on prestidigitation or alchemy or mojo or even magic. Congratulations. My local Raley's, Bel Air, and Nob Hill stores (all owned by Raley's) used to operate similarly, but less so these days. They'll get their mojo back, though, and hopefully Rouses will never let theirs slip away.

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M. Jericho Banks PhD, President, CEO, Forensic Marketing LLC

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