SHEBOYGAN, Wis. -- Fresh Brands, parent of the Piggly Wiggly brand in this region and owner of the Dick's Supermarket chain, is rolling out an expanded array of general merchandise and health and beauty care items to capitalize on their higher margins. The company also is considering adding pharmacies and is intent on rolling out fuel centers.
Last month, Fresh Brands opened a new distribution center near here inside a former supermarket that will become the staging point for the general merchandise rollout. The 50,000-square-foot distribution center is being used to store an additional 3,000 to 5,000 stockkeeping units of nonfood items, primarily cookware and other kitchen gadgets.
"We're not only looking at the expansion of everyday cookware, but we're also putting in gourmet cookware, small appliances and other things that we see working throughout the marketplace," said Mike Houser, vice chairman and chief marketing officer, Fresh Brands, in an interview with SN last week.
He said the selection of nonfood offerings in each of the company's 99 stores would be based on the size of the outlet and its location. By May 1, he said, all the new items should be on the store shelves.
To make room for the new items, certain underperforming merchandise will be deleted, he said.
"Each store is a little bit different, but I would say from a category standpoint, we see categories that are declining, and we're going to be taking space out of those," he said.
The company also is eyeing the possibility of adding pharmacies, but Houser said Fresh Brands "is very much in the preliminary stages with that."
Other supermarkets in the Michigan area have not had much success adding pharmacies, he said, and Fresh Brands is taking its time to determine the best strategy for adding the service.
Fuel centers, however, appear to be a service that is much further along. One franchisee began testing a "Pig Stop" fuel center at a Piggly Wiggly in Crivitz, Wis., in December, and Houser said Fresh Brands expects to have a model fuel center ready for rollout throughout the chain by the third quarter of this year, or the fourth quarter at the latest.
Plans call for the fuel centers to be tied into the Piggly Wiggly Preferred Card program, using incentives that will both drive gas shoppers into the stores and attract store shoppers to gas up, according to Houser.
Nicholas Witt, co-owner of the Piggly Wiggly franchise that is testing the fuel center, said he's pleased with the appearance and the minimal labor costs of the pay-at-the-pump setup, although business has been slow. He said he's hoping that a new loyalty program, which was scheduled to launch late last week, would drive sales.
Although his original plan called for offering fuel discounts based on grocery purchases, a revised marketing strategy calls for customers who scan their Piggly Wiggly Preferred Cards at the pump to receive a discount of 3 cents per gallon.
"If you have a loyalty card, it's going to be another benefit of shopping at Piggly Wiggly," he said. "Once we start effecting those discounts, I think it's really going to kick it off for us."