Ripe For Competition

With another large supermarket chain coming to town and a retailer now offering groceries, TC's small food markets are fighting to compete

By Mardi Link

REGION – Paper or plastic? That now-familiar question at the grocery checkout was really just a warm up for the shopper of today. Because with new stores opening here, established small stores evolving, and big-box chains adding or expanding their grocery sections, Traverse City shoppers increasingly have more substantial decisions to make at the grocery store.

"Traverse City, much like many other communities across the country, is experiencing changes in the grocery offer," said Dr. Frank Gambino, a professor of marketing at Western Michigan University and a member of Spartan Stores Inc.'s board of directors. "Chains, dollar stores and even building supply stores are offering groceries, which had been available only in the traditional supermarkets. In addition, more value-focused stores such as Save-A-Lot and ALDI continue to test markets to determine consumer acceptance."

International discount supermarket chain ALDI announced it would open a Traverse City location in the old Circuit City building by January. And beginning in 2010, Target debuted its "PFresh" grocery section in 875 stores across the country, including in its Grand Traverse Mall location, which added produce in March.

"Our customers love it," said Target manager Sheryl Luptowski. "They can come here for clothes or office supplies and pick up some groceries while they're here."

But what Target shoppers can't get is local produce, since the company buys from large growers who can supply hundreds of stores. And "local" is the staple of two smaller single location stores in Traverse City: TC Produce Market and Oryana Natural Foods Market.

"I don't care what big box store comes in, they can't touch us on local or on fresh," said Suha Saco, owner of TC Produce Market on South Airport Road. "That's the difference about a small, customer-oriented store like ours. If you were to come in here every day, you'd see new fresh produce every day. Fresh and reasonable."

The TC Produce Market opened in August, was fully stocked by October, and after watching their customer base increase every month, now employs 12 full- and part-time staffers. Saco says she can articulate her strategy to compete with chains like Target and ALDI in a single word: "Fresh."

At Oryana, General Manager Steve Nance expanded Saco's "fresh" strategy to include organic, local and high-quality.

"Our buyers are not their buyers," he said, when asked about the impact an ALDI store would have on the Traverse City co-op. "We focus on local, high-quality groceries at a fair price. Our buyers are very particular about their shopping experience. We're a cooperative, here to serve our member owners and not just to maximize profits."

Service is also what keeps customers coming back to another small and local grocery retailer, Edson Farms, says Jessica Edson who owns the South Garfield store with her husband, Chris.

"I can take you around the store and tell you about my personal experience with all of our products," she said. "We've tried them, we know about them, and that's our advantage over the big guys. They certainly couldn't do that. But they do affect our business. It's so easy when you're at Target shopping for clothes to just pick up a couple groceries. I can't compete with that. But I can offer better service, I can offer local products, including produce, and I can offer a good stock of products our customers need."

Edson Farms has had a "huge success" with its gluten-free items, stocking a variety of tasty alternative breads, pizza, pasta, sauces and chips for people who can't tolerate wheat protein. Big box chain stores do carry a limited number of these products, but Edson said customers tell her the chain stores are often sold out, under-stocked, or unaware of which brands taste the best.

"Our sales are still increasing," Edson said, "even with the competition. I think that's due to a number of factors. Our staff is educated, we've been in the same spot for 25 years, and it's easy to park here, easy to shop here, and it's quick."

In between the big box chains, discount stores and small specialty stores are the traditional general supermarkets. These stores can continue to thrive even in a competitive market like Traverse City, Gambino said, if they make customer loyalty a priority.

"Glen's . . . Oleson's and Tom's have served the Traverse City community for many years," Gambino said. "Despite the challenges of the economy and the buildup of competitive offers, these three mainstays continue to serve the greater Traverse City market and enjoy strong loyalties from consumers who prefer not to shop in the big-box store and want more variety than the limited assortment formats offer."

D.J. Oleson of Oleson Food Stores agrees. "We really don't worry about our competitors. I just pay attention to my own things and numbers, and we're doing just fine."

And then there's Meijer, the 800-pound gorilla in the local grocery battle. The Traverse City Meijer is the largest in the entire chain, weighing in at 255,000 square feet. The grocery department makes up roughly half of that space, says Store Director John Spaulding.

When asked about increased consumer choices and competition locally, Spaulding says simply, "I'm not feeling that, because my business is strong and growing rapidly." BN