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FDBuyer: How A&G Fresh Market Stays Fresh

By Warren Thayer

January 5, 2012

Through a special arrangement, presented here for discussion is a summary of a current article from Frozen & Dairy Buyer magazine.

I love it when a scrappy and agile independent goes toe to toe with the big chains and thrives. A&G Fresh Market, in a working class Polish neighborhood on the west side of Chicago, is one of them.

Signage is in English, Polish and Spanish since many of the people moving into the neighborhood are Hispanic. Muzak in the store focuses on Italian singers (Sinatra, Tony Bennett, and even some light opera) since the owners like to stay close to their own ethnic roots. But the grocer is highly competitive when it comes to selection, price and service.

Snippets from a tour of the store by FD Buyer with co-owner Frank Tenuta revealed a few keys to its success:

Independence: "We're very hands-on. We thrive on cleanliness, customer service and aggressive pricing. This neighborhood was primarily Polish, but it's going through transition as more Hispanics move in. We cater to everyone in the area, and we're big enough to keep everyone happy."

Price competitive: "When we get deals from our vendors, we pass them along to our shoppers instead of just taking more profit. Word of mouth goes a long way. We make sure there are lots of options for customers at different price points."

Catering to all segments: "We make sure we hire the right help, with the knowledge of what the customers want. Right now, our market is about 40 percent Polish, 30 percent Hispanic and 30 percent everything else, including Asian. We have a large produce department, and monitor sales of certain items there that are used pretty much strictly by Hispanics."

Variety: "We can't do just the top two brands and a regional in this neighborhood. We've got to have lots of variety for different ethnic groups, and price options as well. This is a blue-collar area; factory jobs are being lost and construction is down. For Polish, Hispanic and Asian foods, we work with our DSD vendors to give us what we need."

Family run: "We have family running the business, and no need to report to Wall Street or anybody. We also have people with experience running each department. Dominick's was doing great until Safeway took them over and tried to run them from the West Coast. I'd rather compete with companies like that, instead of another independent. You have to work really hard to keep your edge against a strong independent."

How A&G Fresh Market Stays Fresh - Frozen & Dairy Buyer

Discussion Questions

Discussion Questions: What attributes seen at A&G are most important for independents competing with chains? What other independent grocers are thriving and what has made them successful?

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Comments:

This is a great story, because A&G follows their heart, by doing what is right. The people in their neighborhood will support them, and success is guaranteed, if the service levels stay high. This is the way we will survive, and it is something all of us can learn from. Congrats!

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Tony Orlando, Owner, Tony O's Supermarket & Catering

This is a great tutorial for any independent trying to figure out how to compete with the big chains. The lessons are straightforward:

1. Understand on a detail level who lives in the trading area and their specific preferences.
2. Give it to them in a fun, friendly environment staffed by people who understand the product and genuinely like people.
3. Give them value (not cheap).
4. Take and demonstrate great pride in what you do.

If you do these things, you will not only survive, but flourish against the giant corporation with standard assortments managed by people far away.

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Bill Emerson, President, Emerson Advisors

Creating a friendly "family affect" with your specific customers has a strong appeal and makes customers feel more comfortable in your store than many other targeted retailing attributes --- and that is what A&G is doing.

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Gene Hoffman, President/CEO, Corporate Strategies International

As A&G seems to prove ,there's no substitute for staying close to your customer base.

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Ryan Mathews, Founder, ceo, Black Monk Consulting

There are four independents/small chains I shop at in Long Island and Queens. They have all found a way to survive and even thrive (judging from the physical expansions). I think they follow the formula here pretty much but also, you simply cannot get the cheeses, deli products, olives, ethnic foods, home made spreads, fabulous breads that they sell, in a big supermarket. Also, I know the people by name and they know me. That is worth a lot in terms of shopper experience

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Joel Rubinson, President, Rubinson Partners, Inc.

The key learning outcome here is authenticity. A&G is 'real': it's a family run business that caters to families like mine. It's a multi-cultural brand that understands and respects my tastes and my culture, regardless of where I'm from. Having said all this, being competitive on price is crucial. I doubt A&G could charge a 30% premium for authenticity.

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Dr. Emmanuel Probst, Vice President, Retail, Empathica

"I go here often because it is close to my home. It has a wide selection of fruits and vegetables and a nice bakery..."

That's the most recent comment on Yelp -- 22 photos...online researching is even easier than shopping! -- and it tells us two things: 1) the store has fortunate demographics: a stable, (relatively) densely settled neighborhood where big-box competition is limited, but money doesn't have to heavily diverted to security and loss prevention;
2) the store is big enough (I'm guesstimating about 20-30K square feet from the birds-eye view) to offer a comprehensive assortment.

Throw in competent family ownership, and they should do well. But caveat vendor: if either the first or last factors change, they would be in trouble fast (the 25¢ deposit for shopping carts mentioned online hints at a possible problem)...and that is always the problem with any company tied to the fortunes of either a single owner or single location: lack of a back-up plan.

'notcom'

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FDBuyer: How A&G Fresh Market Stays Fresh

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