For more than 20 years, this Washington-based independent grocery store chain has grown by giving customers the right selection at the right price. For more than 20 years, this Washington-based independent grocery store chain has grown by giving customers the right selection at the right price.
When Greg Saar opened the first Saar’s Market Place grocery store in 1988, the company was founded on a platform of providing variety and value. Over the last 20 years, Saar’s has taken that platform, originally built in Oak Harbor, Wash., and successfully expanded to 12 locations thanks to the work of long tenured employees.
“We always say we are both a great place to work and shop,” said John Hames, general manager. “We have some people who have been here for 20 years, we have less turnover and better loyalty than others, and the senior staff, store directors, and store staff are really the ones driving this business.”
Built to suit
Each Saar’s location is different. Saar’s doesn’t have a specific footprint for each store. Instead, the company takes a niche marketing approach based on appealing to the demographic around the store. The key is finding a location with a population looking for the variety and value Saar’s stores offer. Some locations are tailored to local ethnic groups. Hames said each store has a different concentration of Hispanic, Asian, Eastern European, or traditional American consumers. “We market each store according to its specific demographic while keeping with our overall strategy,” he said.
Throughout each Saar’s store, private label products are marketed intensely, like the Western Family stable of products. The company drives its center store with what it calls category killers. Although Saar’s may not have a particularly deep SKU count, the company will source extreme value items and display them in four-foot display bunkers within their product category. The idea is to drive sales and the Saar’s price image through merchandising category killers.
This is important given current economic conditions. Hames said Saar’s customers are looking for more value than ever. Since Saar’s is a value-driven store, this presents an opportunity with customers who are looking to make the change from national brands to private labels. Hames said the company has seen a dramatic increase in coupon sales. Saar’s has a weekly six-page flyer that highlights a different event each week, be it a meat sale, produce sale, or $0.99 sale.
“We are event-driven, and we drive our sales based on those events,” Hames said. “We don’t use a loyalty card program because we feel that loyalty is old fashioned and earned with good pricing for everyone, good service, clean stores, and special events to make a fun shopping experience. That will drive loyalty the old fashioned way—by earning it.”
Although Saar’s doesn’t chase new locations just for the sake of expansion, the company has grown recently. Hames said the newest Saar’s store was opened in Yelm, Wash. in 2008 when a former QFC location became available. Despite the presence of Walmart and Safeway, company studies showed that the area’s demographics would support a new store.
Along with opening the new store, the Saar’s Market Place on Pearl St. in Tacoma underwent a major remodeling. The store’s footprint was changed to place more emphasis on produce, moving the produce section to the front door. The same was done with the Yelm store as well. Saar’s is currently in the midst of another major overhaul, this time at the Saar’s in Parkland, which Hames said is the company’s second location.
“We are moving produce to the front of that store as well, and it will be ready for the grand reopening in May,” said Hames. “We recently purchased BR Data’s Retail Back Office Software Solutions program to help with price optimization and back door receiving. That has been a major investment and focus over the last six months.”
Faced with rising costs, Saar’s is working to be sure its operations are running cost effectively. Saar’s buys the majority of its product from wholesaler Unified Grocers, the largest retailer-owned wholesale grocery cooperative in the Western US. The company also has its own third-party trucking service deliver products.
“That helps us save money with deliveries to the stores. We are also in the middle of a research program to change out the lighting at our stores to make them more efficient,” Hames said. “We just did that at the Parkland store, and we have two more stores on line where we will have lighting efficiency improvements taken care of.”
Through internal training and mentoring for up-and-coming employees, store directors and senior staff is taking an active role in the workforce development of Saar’s future leaders. The company has succeeded in recruiting people with experience in large grocery chains, many of whom find Saar’s independent status helps create an inviting work environment.
“They find that we don’t merchandise every store according to a rigid plan,” said Hames. “Each has a certain amount of freedom to run the store to suit its individual customer group.”
Although future expansion is likely for Saar’s, Hames pointed out that the company’s growth comes from properly running its existing locations. When opportunities for expansion arise, Saar’s will look at them, but the company isn’t constantly on the lookout for the next new store. The conditions and timing have to be just right.
With the economy actually providing opportunities for growth for value operators like Saar’s, the company is introducing itself to many new customers who are looking for quality products at a great price. As for the people who have always shopped with Saar’s, their habits are changing. Instead of buying national brands, Saar’s is seeing more private label products move off the shelf, meaning highlighting the category killers will continue to be an important strategy for store managers.
Despite intensified competition because of market changes, Saar’s strategy will always be providing incomparable value and reacting quickly to shifts and opportunities in the market. As an independent operator, Saar’s has the advantage of being able to react quicker than large national chains.
“We face stiff competition, but we set ourselves apart by pushing meat and produce,” Hames said. “We have the best value in meats and produce, and whereas a lot of stores push their center store, we hang our hat on meat and produce and are extremely competitive with our center store.”