MARSH STORE DEBUTS IN CHICAGO

Robert Sharoff

NAPERVILLE, Ill. -- Marsh Supermarkets entered the Chicago market last week with a new, 66,000-square-foot store in this rapidly growing suburb of about 147,000 people.

The vehicle chosen for the company's entry into the country's third-largest market is a new "lifestyle" concept store that melds together elements from high-end specialty chains such as Whole Foods Market and Trader Joe's with traditional grocery store assortments.

Marsh, based in Indianapolis, unveiled the concept late last year with a store in Noblesville, Ind., and has since opened two others.

"Like all companies," said Don E. Marsh, chairman and chief executive officer, "we have to continue to grow. Chicago is a fantastic market with demographics that match our customer profile. We're very optimistic about the opportunities here."

He added that the company will be looking for additional locations in the western suburbs. The first site is about an hour southwest of downtown Chicago.

The Chicago market is dominated by two traditional chains, Jewel and Dominick's, the former a division of Albertsons, Boise, Idaho, and the latter owned by Safeway, Pleasanton, Calif. Dominick's has struggled in recent years, and last year it shuttered 12 locations.

Asked whether Marsh would be interested in acquiring units from Dominick's, Marsh said, "Nothing's off the table. We'll look at anything. Are we looking at Dominick's now? No. But that's not to say we wouldn't look at some of their stores in the future."

The issue of additional units will be key, analysts said. "It not economically efficient in the long run to service one store from Indianapolis," said Neil Stern, senior partner of McMillan/Doolittle, a retail consulting firm in Chicago. "But they don't need 100 stores to be successful with this concept. Look at Whole Foods. They probably have nine or 10 stores in this market and are doing very well."

Stern added that Marsh has "created something that is unique in the industry right now from a layout and design standpoint and they want to prove that this concept can work in Chicago."

The store forgoes traditional aisles of gondolas for a double-racetrack layout. Dead center is a coffee bar surrounded by fresh produce and extensive international and organic departments.

Around the perimeter are a large deli area and departments for meat, seafood and liquor, as well as a "Pantry" area for dry groceries. The store also has a sizable floral department, a drive-up pharmacy, and a health and bath and body area.

"We're always trying to redefine who we are and what we do," said David Marsh, the company's president. "This is probably the most refined lifestyle concept store we have in the company."