Viewpoints

Chains Evolve to ‘Own Local’ in Their Markets

RSS

Industry observers have likely noticed mentions of the West Coast investment firm Endeavour Capital appearing more frequently in the pages of Supermarket News during the last few years.

In addition to an unusual spelling of its name, Endeavour has also brought a unique perspective to food retailing. The company now owns stakes in three local supermarket chains stretching from Los Angeles to Seattle — Bristol Farms, New Seasons and, most recently, Metropolitan Market.

In an interview with SN, Stephen Babson, managing director of Endeavour, explained the company’s investment strategy, and why it sees potential in these niche operators.

“We feel that being a local brand increasingly is going to be important for companies that are not trying to compete solely on price,” he said.

While Bristol Farms and Metropolitan Market have obvious commonality in their high-end positioning and their focus on attractive merchandising of specialty product, Babson also drew a connection to Portland, Ore.-based New Seasons, which focuses on a mix of conventional, natural and organic product and sharp pricing. Some of the key qualities all three banners share, he noted, are their strong local consumer followings; their close ties to their local communities; and their knowledgeable, well-trained front-line staffers.

Babson’s analysis adds nuance to the dominant, diverging trends in food-retailing strategies, with operators like Kroger Co., Aldi and Wal-Mart Stores leading a price-driven charge to attract traffic, while fast-growing banners like Whole Foods and The Fresh Market take a more high-touch approach emphasizing product quality, merchandising and service.

Read more: Investor Sees Potential in Metropolitan Market

The additional value that chains like Bristol Farms, New Seasons and Metropolitan Market offer is their strong reputation as locally involved operators. All three chains, Babson explained, “own being local.” They hire locally, tailor their stores to individual neighborhoods and are deeply involved in local causes. (New Seasons even sources more than 30% of its product locally.)

These companies, as Babson puts it, have evolved beyond the strong community ties typically associated with independent food retailers and have truly become “local brands” with strong reputations that extend across large markets. That explains why Endeavour sees the opportunity for growth with each of them. Endeavour’s investment strategy serves as a reminder that the careful cultivation of a loyal, local following can be as crucial as anything else a food retailer does to differentiate itself.

Suggested Categories More from Supermarketnews

 

Discuss this Blog Entry 1

Oscar L. Nunez, M.A.S. Grocery Busi (not verified)
on Aug 8, 2012

Great concept.

Great savings in overhead; There's tremendous duplication of O.H. Costs.
There are 3 Mexican Independent Small Chains, all in the Top 50 SN - 2012.

XLNT!
Congratulations.

Post new comment
or to use your Supermarket News ID
Contributors

David Orgel

David Orgel is executive director, content & user engagement, of Supermarket News (SN) and its website, SupermarketNews.com. Orgel delivers his opinions on industry trends through a bi-weekly...

Jon Springer

Jon Springer has been writing about food, food retailers and food retailing for more than 10 years, and is in his second tour of duty with Supermarket News. His prior experience includes covering the...
What's Viewpoints?

In their Viewpoints columns, SN editors give their perspectives on current industry issues.

Blog Archive
Penton Media Food Group and Related Sites

Sponsored Introduction Continue on to (or wait seconds) ×