DELI-BAKERY ON A HIGHER LEVEL

ROSEANNE HARPER

NEW YORK -- Multigrain breads, "bull" bagels and walnut-raisin rolls are new products Food Emporium here is using to try to keep a step ahead of the competition.

These breads are being offered by a specially trained clerk at a service counter set up in a corner of the street-level bakery and deli department at the retailer's newest store. The store is located in an upscale area of Manhattan's Upper East Side, in a condo building put up by real estate mogul Donald Trump. The rest of the store, and the bulk of the grocery selling space, is one flight down by escalator or elevator -- a two-story setup born of New York's sky-high real estate costs.

The bread line, which dominates the bakery, includes some 15 varieties of organic breads from

a specialty bread company, and Italian breads from a small baker in the Bronx. In its first month open, the store has had such success with this bread program that the retailer is already planning to roll it out to other units, said Louis Ruggiero, president of Food Emporium, a Bronx-based division of A&P, Montvale, N.J.

"There's no other supermarket in Manhattan with anything like this. It's no surprise to me that it's doing so well. My high expectations for it are being met," Ruggiero said with a note of pride in his voice.

"Bread is the in thing. People are into eating what's good for them and bread, particularly organic, is seen as healthy. That's why we decided to do this," he added.

It fits the mission of the upscale chain, which is "to stay ahead of everybody else. We want to be there with whatever is the trend -- not fad, but trend. And breads are a growing one," Ruggiero said.

Including bagels, breads are now ringing up more than 40% of this store's weekly bakery sales. The service bread counter was added at the last minute before the store opened. It displaced display cases meant for frozen cakes, a line the retailer decided to forgo, Ruggiero said.

In new stores and remodels, the bread counter will be redesigned, he said. "Not necessarily to give it more space, but to square it off better so the counter would be across the front of the area."

At this store, it's located in a corner.

Just inside, to the left of the entrance, loaves of bread in an assortment of sizes, shapes and shades are displayed unwrapped on slatted wooden shelves and in wicker baskets. There, at a freestanding counter, a staffer samples different types and serves customers all day long. A large blackboard features a handwritten list of the day's choices. On a recent visit to the store, SN noted the following varieties listed there: pane di casa $3.99; olive bread, $3.99; whole grain health, $3.49; pain levain, $1.99; scala, $2.79, and multigrain boule, $2.79. An employee told a customer about the ingredients in one of the organic breads, and shoppers dipped samples in a pool of olive oil in a platter set out on the service counter.

Having an associate there at all times is crucial for a bread program of this type, Ruggiero said. He added that for two weeks after the store's opening, a representative of the organic bread supplier worked alongside store employees to help educate them about the products.

Food Emporium integrates organic breads with its other breads. The organic varieties are supplied by an upstate New York bakery that delivers to the store each morning. Walnut-raisin rolls and a special Italian bread are also brought in daily from two New York City bakeries. And a line of super-large bagels, known as "bull" bagels, is supplied by a New York City bagel maker. In addition, rye, a variety of Italian bread and a handful of other items are baked off in-store. The roster of specialty breads brings the bakery's product mix to about 140 items. "We chose the types of bread by just looking around to see what customers are buying in the small specialty stores in the neighborhood," Ruggiero said.

There was no bakery in the Food Emporium unit across the street that the chain vacated when it opened this one. But this bakery already is rivaling the sales volume in any other unit in the chain, Ruggiero said.

It's not bread alone that accounts for so many register rings. A variety of some 30 cakes and pastries, including Italian specialties, are the pride of this bakery. The bakery is run by a baker who owned his own shop and specialized in Italian items. Here he makes everything from scratch, and is being kept busy with special orders.

Some of the items would be just right for espresso bar fare, said Ruggiero.

"We seriously considered putting an espresso bar in here, but decided it's really necessary to have some seating if you're going to do that. People don't want to walk around with a cup of cappuccino in their hand," he said.

But he added that where space permits, including at suburban locations, espresso bars are almost a certainty for the future.

Cakes are the mainstay of the bakery's scratch operation.

On the first Saturday the store was open, the bakery sold 70 store-made strawberry shortcakes. Also in the month since opening day, it has turned out more than 300 special occasion cakes. The baker, John Dellarusso, produces Hungarian cheese cakes, fruit tarts, sheet cakes, specialty cakes and a large variety of Italian pastries from scratch in a space that looks hardly big enough to turn around in.

Some items, however, such as rugelach and miniature Danish and cookies, are supplied from outside for bake-off. The company's philosophy is to buy a few high-demand but labor-intensive products frozen in order to give its bakers more time to produce custom items.

"It just doesn't pay to make rugelach and cookies from scratch, but by bringing them in, we free our people to create," said Ruggiero, explaining that Food Emporium has not been tempted to go the frozen route in a big way as many other retailers have done to combat high labor costs.

"It's quality and variety that make a bakery. Price isn't that important," he said. Customers' lack of price-consciousness may be particularly relevant at this store. The 12,000-square-foot unit is in a high-rise complex in which a two-bedroom condo goes for $1.1 million. Residents in the building and elsewhere in this upscale neighborhood are accustomed to shopping small neighborhood boutiques for everything from food to clothes.

And Food Emporium, when it obtained the two-story space, decided to incorporate a boutique-like atmosphere with one-stop shopping, said Charles Macias, Food Emporium district manager.

Indeed, the small, street-level area that's dedicated to the bakery, deli and salad bar has a definite small-shop feel to it. And it has its own checkout.

In this area, set at an angle in the aisle between bakery cases and a long line of deli service cases, is a salad bar with a large variety of offerings, including Caesar salad, cut fruit and vegetables, and tuna and chicken salad. The price, $1.99 a pound, draws in lunchtime customers. That price compares to $3.99 at the least expensive salad bar in specialty stores or delis in the area.

Weekly sales from the salad bar are nearing $3,000, a figure that's 10 times higher than that rung up at the chain's former 7,000-square-foot store across the street, an official said.

But there the salad bar was simply made up of bowls on an ice table in the produce department. Here, the presentation in a brightly lit, refrigerated salad bar makes the difference. Its proximity to the deli is considered a plus, too.

"People grab a sandwich and then pick up something to go with it at the salad bar," said Ruggiero. "Dagwood" sandwiches, with a variety of meats and cheeses on thick slices of Italian bread, are prewrapped and offered up on a platter on top of the service deli case. They're $1.99 each. During a lunchtime visit, SN observed the platter of Dagwoods go from full to empty within minutes as a steady stream of customers grabbed sandwiches and then headed for the salad bar.

Deli sales are nearly triple what they were at the former location across the street, said one Food Emporium official.

"With the added space here, we're able to present what we have better," he said.

Lunch and dinner traffic are about equal at this store, and traffic is good all day on Sunday, Ruggiero said. He estimated weekly total store traffic to be about 35,000.

The lineup of deli cases is along the right side of the rectangular area. An array of smoked fish and other appetizers comes first. Then 8 feet of specialty salads in crockery bowls. Midway is an 8-foot section of whole loaves of meats such as ham and turkey with pineapple garnishes.

"Customers gather there in that mid area. That's why we put the slicing meats there. They're an impulse item," Ruggiero said.

Next comes an 8-foot case of prepared, chilled entrees such as grilled eggplant and chicken fillets. At the end of the rectangle, a service hot case features such items as meatballs and buffalo wings. Rotisserie chickens are offered there, too. The emphasis is on service in this area of the store. The only self-service case, besides the salad bar, is an 8-foot bakery case with doughnuts, muffins, miniature bundt cakes and Danish. Asked what the challenges of a two-story format are, one official said it requires more manhours to carry out tasks and it also takes customers some time to get used to it.

"We'd rather have everything on one level, but this is a fact of life in New York City," another official said. "Prime space just isn't available on street level, and when it is, it's $100 a foot." By comparison, the below-street-level real estate goes for $35 to $40 a foot.

The salad bar, run by the produce department, is a particular challenge in a two-story setting. To service the salad bar, employees must traverse three levels of the store. Produce is received on the below-street-level area that houses produce and other departments. But the 400-square-foot preparation room, where vegetables are freshly cut, is one story up from street level.

Customers, too, must adjust.

"They have to get over the hump of using an elevator or escalator. They don't mind in department stores, but they have to get used to it in a food store," Ruggiero said.

"We also learned from experience with another two-story store that it's necessary to offer both an escalator and an elevator," he added.

"Once we get them in here [the street-level fresh foods area], the challenge is to get customers to shop the whole store," he added. In addition to freshly prepared fare and baked goods at street level, the store offers everything any other supermarket would offer -- downstairs. During opening week, staffers at street-level handed out circulars and suggested customers go down to see the rest of the store.