UKROP'S STOPS FRESH EXPRESS, WILL PLANT A BANK BRANCH

ROBERT VOSBURGH

RICHMOND, Va. -- Ukrop's Super Markets here shuttered its Fresh Express deli/restaurant concept after the close of business Friday, ending a six-year run that brought the retailer's meals program directly to downtown business people.

In its place, Ukrop's will open a branch of First Market Bank, also owned by the company, in early June, according to officials.

"While we appreciate the business of our loyal Fresh Express customers and are sorry to disappoint them, we feel that in choosing to close Fresh Express so that it can become First Market's downtown branch, we are making the most fiscally responsible decision," stated Jim Ukrop, chairman of both organizations.

When it opened at 1001 East Main Street in 1993, Fresh Express was seen as a way to introduce customers to Ukrop's fresh-prepared foods in a nontraditional store environment. The location, a former branch of Heritage Savings Bank, required a "sizable investment," as the space had to undergo a significant retrofit, which included construction of food-preparation areas, dry and refrigerated storage, and the installation of cooking gas lines and restaurant kitchen-grade electric outlets.

"We still think that opening this location was strategically a sound investment, as Fresh Express has introduced many customers to our many fresh-food offerings," said Bobby Ukrop, president and chief executive officer.

The unit originally opened at 7 a.m. and closed at 6:30 p.m. during the business week, serving food that covered all three dayparts: breakfast, lunch and dinner. On a recent visit to the store by SN, a lively lunch crowd was indeed in evidence. The L-shaped unit was busy with professional patrons serving themselves at a long salad bar, or ordering prepared-to-order items in the back, where the hot action stations were located. Seating along one side, and upstairs in a loft area above the main floor, was filled to capacity.

But, while the unit always enjoyed a strong lunchtime business, its business dropped off significantly afterwards, according to officials.

"We [hoped] that over the years our business would grow to include the late afternoon shoppers picking up items before going home; unfortunately, that has not happened," he said.

One possible explanation is that the downtown location was not conducive to the evening meals business, since it was far from most people's residences.

"At 5 o'clock, people want to get the heck out of the city," said Brian Salus, president of Salus & Associates, a Richmond-based consultant who was director of food service for Ukrop's when Fresh Express opened. "While [customers still might] buy a dinner meal from Ukrop's, it was usually at a store close to where they lived."

Ukrop conceded that the lack of growth in the take-home dinner business strained the operation's profitability, a situation exacerbated by high fixed costs. The retailer also struggled to maintain its standards for cleanliness and prompt service.

Salus added that the city of Richmond's decision several years ago to allow food vendors on city streets probably affected the Fresh Express business as well. All the while, the retailer had to support a prime downtown location that required the unit to "turn a lot of numbers" to generate an adequate profit, he said.

The timing of the decision came as company officials were preparing to debate whether to reinvest in the Fresh Express physical plant -- upgrading and maintaining the equipment -- while at the same time, continuing their search for a suitable location for their fast-growing, profitable bank.

Ukrop's is 51% owner of First Market Bank, which has generated assets totaling more than $325 million since opening in November, 1997. The Fresh Express location will be First Market's 21st branch. National Commerce Bancorporation controls the outstanding shares, according to published reports.

All associates who were assigned to the Fresh Express unit will be offered positions at other Ukrop's locations, according to the company.