Unlike big-box grocers, specialty grocers can capture a niche market. The trick for these smaller retailers is growth.
One such California-based grocery chain has made a name as a quirky company selling products shoppers won’t find elsewhere.
Now, as it expands quickly, the retailer is tinkering a bit with its successful model by opening up bigger stores. But ff the owners aren’t careful, the plan could backfire.
The chain has expanded from about 20 locations in Southern California in the 1970s to more than 360 shops nationwide. The company earned about $8 billion last year, according to an article in The Los Angeles Times.
“Their mission is to be a nationwide chain of neighborhood specialty grocery stores,” Mark Mallinger, a Pepperdine University business professor who has done research on the company, said in the article. “But there’s a dichotomy there. It’s like being a national chain of mom-and-pop stores.”
The company opened 40 new stores a year for the past three years and is moving well outside the familiar territory of Southern California. Many of the new stores are considerably bigger —
measuring at 15,000 square feet and larger.
The business “can make double or triple the sales volume per week at a bigger store than at a small store, while checkmating competitors,” said Burt Flickinger, managing director of retail consulting firm Strategic Resource Group in New York.
Source: LA Times, October 2011