PETRINI SHIFTING FOCUS TO FRESH AND UPSCALE

TONY SPLEEN

SAN RAFAEL, Calif. -- Fresh foods are taking over at Petrini Markets here.

In a move to redefine its image, Petrini's is dumping many of its nonfood lines to make way for more fresh and upscale foods.

The company, which operates 18 stores in the San Francisco Bay area, is abandoning such nonfood lines as cigarettes, batteries, film, greeting cards, maps, postage stamps and paperback books.

It's shifting its focus to improve and expand fresh produce, service meat counters, cheese departments, wines and other upscale products. Among the slated changes, full-service meat departments will be reinstated in three stores where they had been removed.

Changes throughout the chain are currently being phased in as existing stocks of nonfood items are depleted. A 60-year-old company, Petrini's was family-owned until 1988 when it was sold to Provigo, Montreal.

For the last three years, Provigo was trying to sell off the chain, which has just a 4% share of the market in San Francisco, Marin and San Mateo counties. The changes at the stores represent Provigo's renewed commitment to the company.

"This is completely opposite to the thinking of conventional supermarkets, which gives me a lot of courage," Provigo President and Chief Executive Officer Joe Coulombe was quoted as saying in a March 31 article in the San Mateo (Calif.) Times. Petrini's will be "strictly focused on edibles and only those edibles in which we can be outstanding," he said.

Coulombe, who joined Provigo in February, wants to leave the

nonfood business to the wholesalers and drug store chains, according to the Times article."I don't think we can be an outstanding retailer selling nonfood products," Coulombe was quoted as saying. "If you can't do it right, get out of the business."

Coulombe said the move should make the company more competitive in the market. Sales of nonfood lines represented such a small percentage of sales that the company could no longer justify the shelf space they occupied, he said.

Petrini's effort to redefine its image is a smart move and one that more retailers need to consider as competition from alternative formats increases, according to an industry observer interviewed by SN.

"This represents a very clear positioning for the operator as to what they want to be in the marketplace," said Bill Bishop, president of Willard Bishop Consulting, a supermarket consulting firm based in Barrington, Ill.

"If we can't get down to the prices of our lowest-price competitors, then we have to look for ways to raise our margins by bringing in products that have higher value and command higher margins. The shift to high quality perishables gives Petrini's that opportunity.

"Not all companies can do what Petrini's is doing and not all should try," Bishop said.

For some companies, however, giving up some nonfood and shifting the focus to fresh does appear to be a trend that is being driven by several factors, he said. First, many consumers are willing to pay a premium for high quality perishables. Second, small- to medium-sized stores are often more capable of delivering on their fresh image. Finally, consumers continue to spend a larger portion of their food dollars on fully prepared foods, creating a great opportunity for supermarkets involved in food service.

Coulombe, when reached by SN earlier this month, declined to comment on the move.