PITTSBURGH -- Giant Eagle is dedicated to giving consumers what they want.
t, marketing, told SN. "We think about the in-store services we provide as individual businesses, not as part of a supermarket business. So we benchmark ourselves against the best in class."
One result of that approach is the company's decision to build stores with drive-through pharmacy windows, David Shapira, chairman and chief executive officer, explained.
"Some supermarkets have stayed away from drive-through pharmacies because they keep consumers out of the stores, but we look at businesses, not departments," he said. "Drug stores offer drive-throughs, and if we're going to be in the drug store business, that's what we have to offer -- even if it means people don't come into the store.
"We've been experimenting with various types of drive-throughs over the last few years, and as a result, we're moving our pharmacies from the center of the store to an outside wall so drive-through customers can talk with a pharmacist face-to-face.
"At some stores with pharmacies in the center, we've experimented with remote drive-throughs where there was audio contact, but we've found customers don't perceive the service in the same way when it's not face-to-face -- and the face-to-face drive-throughs do the most scrips."
The first store with the pharmacy deliberately located on an outside wall to accommodate the drive-through service opened in mid-February in Allegheny Valley near here.
Just as Giant Eagle tries to emulate drug stores to benchmark its pharmacy operations, it has established a string of video stores adjacent to its stores (called Iggle Video, based on the way many Pittsburghers pronounce the word "eagle"). Those stores have been "a tremendous success," Shapira said, "because we try to be as good as Blockbuster, and we've been able to accomplish that."
In a similar vein, Giant Eagle has developed its Nature's Basket natural foods and supplements sections -- including organic produce -- over the past couple of years to meet consumer demand for healthier foods, he said.
"The department has been growing in size, and we've been putting it into more stores," Shapira said, "because customers are increasingly demanding these kinds of products, so we're putting the departments in to satisfy that demand."
The natural food departments will also help Giant Eagle stay ahead of the curve as Whole Foods begins entering the market here, he added.
"We pride ourselves on continuously learning and changing and adapting what we do," Shapira said. "We try to do that in all areas, not just in store presentation but in terms of installing technology, lowering the cost of distribution and lowering the cost of buying."
Giant Eagle stores run the gamut from 12,000 square feet to 120,000 square feet, with most new stores falling into the 75,000- to 80,000-square-foot range. That's slightly smaller than the previous footprint, Shapira said, "but we're refining our concept all the time, and we think we can get our entire concept into stores of that size without needing more space.
"In fact, the current prototype has proved to be our most productive model."
"Larger is not necessarily more consumer-friendly," Ray Burgo, president and chief operating officer, told SN.
According to Karet, "Our stores are big enough to accommodate all the services customers want, yet small enough for them to feel they are both convenient and comfortable to shop."
The stores are combos, with in-store pharmacies, plus adjacent video stores under the same roof with their own entrance. The stores also feature a wide range of fresh departments, including natural foods, service meat, seafood, a delicatessen, bakery and produce, a gourmet cheese counter, a fresh pizza counter, a sushi bar -- plus a dry cleaner and photo finishing at the customer service booth at the front.
Some of the stores have the fresh departments on one side and the traditional grocery sections on the other, with the pharmacy in the middle, Shapira said. However, the sections have become more integrated at stores built in the last couple of years, he pointed out.
Giant Eagle developed the current prototype about five years ago, "though it is continuing to evolve," Burgo said.
"We never rest on our laurels," Karet added. "Each new store represents things we learned at the previous store. As a result, each new store is somewhat different than the last one because we learned something from it."
Most of the 75 stores built according to the current prototype are in western Pennsylvania, "and we're investing heavily in the Cleveland area to bring the stores there up to that standard, though we don't have quite as many in that market -- yet," Shapira said.
One of the hallmarks of Giant Eagle stores is an extensive variety of products -- "a real point of difference for us," Karet said.
According to Burgo, "It's not necessary to carry 10 varieties of national brands, but simply to carry a unique selection. That's what we do -- balance our offerings by providing variety without duplication."
According to Shapira, "Though we're already the market-share leader in all of our markets, pricing is increasingly competitive everywhere. So for people to come to our stores and be able to get exactly what they are looking for keeps them coming back to us and keeps them from going elsewhere."
The company operates five distribution centers: a 600,000-square-foot grocery, produce and dairy facility here, and a 1-million-square-foot warehouse in Cleveland, plus three leased facilities -- a meat warehouse in Portersville, Pa.; a frozen food facility in Youngtown, Ohio; and a nonfood facility in Washington, Pa.
The company is well-equipped to handle the business for all existing stores, Shapira said. Added Burgo, "All are productive, but with the ability to expand as our volume expands."
