WASHINGTON -- Supermarkets that operate a store-within-a-store for natural and organic sets will garner more success if the department is staffed with trained personnel, according to a panel of industry experts who spoke during the recent Natural Products Expo East.
"Store-within-a-stores that have not been staffed usually don't do well," said Cheryl Bottger, corporate vice president of natural food sales at Tree of Life, a leading distributor of natural, organic and specialty foods headquartered in St. Augustine, Fla. "The perimeter is absolutely the right-on place for store-within-a-store."
Bashas', the Chandler, Ariz.-based, privately held chain, segregates its natural and organic items in what has been dubbed its Natural Choice section. According to Paul Howland, buyer/merchandiser for the department, the retailer has seen much success in operating under this model. Bashas' operates 130 stores: 65 Bashas' markets, 50 Food City Hispanic formats and seven A.J.'s gourmet stores.
"We are beating trend," he told attendees, citing single-digit growth at the Bashas' formats. He also noted that educational training sessions are conducted 10 times a year for personnel that work in the department, as well as store pharmacists.
For the most part, Bashas' places the separate sections either in the front of the store or right near the pharmacy.
However, determining which is the best practice -- to segregate or integrate products in-aisle with mainstream counterparts -- depends mainly of the demographics of a particular store. Christine Janssen, natural foods category manager at the Canadian Thrifty Foods, countered Howland's strategy by reporting overwhelming success in her stores, which fully integrate natural and organic products.
At the owner-operated company with 18 units, natural grocery products alone account for 10% of sales, she told convention attendees. Indeed, demographics do play a large role in the success, as the communities served by Thrifty also house universities and governmental offices.
Some secrets of success she shared with the audience included good shelf position, product selection in every category, strong, up-front promotions and marketing, and having a management team that is on board with natural foods. For example, Thrifty regularly produces a 16-page flier that always includes natural and organic promotions.
"Natural foods is supported by the top down at Thrifty Foods," she said.
When local competition seemed to lean toward the store-within-a-store approach, Thrifty decided to run a test. The retailer took all organics in one store and moved them to a signed aisle. The result was a 60% drop in sales, Janssen said, indicating that consumers were more apt to purchase products that were integrated.
Retailers don't have to worry as much about magnifying price differentials between natural and organics and mainstream items when integrating items, Janssen said, because "price gaps aren't as big as they used to be."