An Expansive Offering

ELLIOT ZWIEBACH

WEST SACRAMENTO, Calif. — Raley's here takes great pride in its stores, and so apparently do customers.

Their assessments helped make Raley's the best supermarket in the U.S. in three successive Consumer Reports surveys in 1997, 2000 and 2003.

“And when they changed the methodology in 2006 to encompass all stores that sell food, we came in third among conventional supermarkets, three points behind Wegmans and Trader Joe's and one point behind Publix,” Bill Coyne, president and chief executive officer, told SN.

“Customers love what we have to offer, and we really work hard to be different from the competition,” he said. “Customers are interested in a store filled with products they can't find anywhere else — a broader assortment of specialized products and local goods — and we keep in touch with customers to stay in sync with what they want.

He said Raley's stores typically carry 50,000 SKUs, compared with an industry average of about 40,000 for conventional stores.

“We have great perishables, including a great foodservice offering; we maintain a high level of service directed at the customer that's natural and genuine, not forced; and we have great colleagues [employees] who exert a level of discretionary effort that's unusual, which translates into satisfied customers,” Coyne asserted.

“We're trying to add more theater in the stores, and we're more environmentally sensitive in operating decisions, decor elements and construction materials, including LED lighting in the frozen food cases for lower energy usage and greater efficiency,” he said. “When you combine all of that, it's a winning formula.”

Approximately half of Raley's stores have a “visual merchandise manager” who is responsible for the look and feel of the store, including endcaps, “and making sure we present the right visual experience for the customer,” he explained.

Grocery managers are given the autonomy to merchandise their departments as they see fit, he added. “They must follow a common plan, but they're encouraged to be creative in merchandising, based on customer preferences and the neighborhood feel,” he explained.

Stores also offer guest services, including a U.S. post office, Play Care centers at 16 locations for young children, checker-unload checkstands and courtesy carryout service.

In larger stores, aisles that run front to back are split in the middle to make it easier for customers to navigate the store, Coyne said.

The stores also use Bose sound equipment “to provide a high-quality sound to capture all the senses,” he pointed out. “Shopping is usually a chore, so we try to make it more interesting. We feel the customer wants to have an experience when she comes in to shop, so we have areas that disrupt the traffic flow — energy areas that provide some form of theater.”

Management pointed out some of Raley's distinctive qualities during a store tour given to SN:

* PRODUCE. Raley's uses refrigerated cases throughout the produce department “because they hold product better and reduce shrink. It adds to our expenses, but it pays off in longer-lasting produce once the consumer takes it home,” Coyne said.

Restocking is done between 4 and 7 p.m., while customers are shopping, “so our people can answer their questions,” Kevin Konkel, senior vice president, store operations, told SN.

* MEAT. The self-service meat department features five-tier shelving with product displayed at a 30-degree angle “so customers can view everything that's available while getting the impression the section is very well stocked,” Konkel pointed out. “But actually it enables us not to have to display a lot of product so we can keep what's on the shelves fresher.”

The service meat sections have been offering free marinades and rubs for the past year, encompassing 24 options that include Cajun rub, burgundy wine marinade, fajita marinade, hoisin sauce marinade and lemon pepper rub.

“A meat clerk is available to suggest which rub or marinade will work with which meat or seafood item and then to apply it while the customer waits,” Coyne said, “and that's turned into a great service.”

* NATURAL FOODS. Raley's was one of the first chains in the U.S. to offer a natural food section in the early 1970s. The section, now called Well for Life, is generally located at the back of the store, behind the produce area, covering 140 linear feet, plus refrigerated and frozen cases.

Well for Life encompasses a variety of health and wellness products, including natural and organic foods; gluten-free products; and products that meet other special dietary needs. Many of these items are also integrated into mainline sections in other parts of the store, Coyne noted.

“We're known for our expertise in health and wellness, and we don't want to lose that reputation. But as more consumers expect to find those items next to mainline items, we have integrated them,” he explained.

* WINES. With so many wineries based in Northern California, local wines are a strong customer draw, Konkel told SN.

Some stores have wine stewards to help guide customers in their selections, and some have wine-tasting classes on Friday evenings that attract between 10 and 40 people a week, he said.

“Some of them actually purchase wine, but it's hard to measure the results on overall store business,” Konkel said.

In-store signs indicate what wines from which vineyards will be sampled each week. “Wines from certain local suppliers bring in bigger crowds,” he noted.

“The wine-tasting classes are part of our effort to make the store the center of the community — a place and an opportunity for friends to meet friends and to meet our colleagues,” Coyne said.

* PEET'S, not Starbuck's. Raley's was the first grocery chain in the U.S. to offer Peet's Coffee & Tea, a Berkeley, Calif.-based chain with a good local reputation, Coyne said. “Instead of featuring a national company, we have a local company that helps define us with consumers,” he explained.

* A CHINESE FOOD BAR. Opposite the service deli counter at most stores is The Sizzling Wok, a freestanding Chinese food bar similar to a salad bar.

* CHEESE COUNTERS. Freestanding cheese displays, in a service or self-service format, have been added to stores over the last four years. “We send merchants to different parts of the U.S. and Europe to find the best cheeses, and we display them with some of the great wines we offer,” Coyne said.

* MAGAZINE. Something Extra, the chain's in-house magazine, is published six times a year and distributed free. Large displays near each store's entrance feature the magazine, plus recipes and a few of the items featured in those recipes “as part of our effort to do a better job of communicating with customers,” Coyne explained.

* CORPORATE BRANDS. The stores offer a wide range of private-label items, including the chain's own three-tier program — Nob Hill Trading Co. for premium items, Raley's in the middle and R Everyday on the low end — plus the Top Care line of HBC products and Full Circle natural and organic products from Topco; Sunnyside Farms for dairy products from its jointly owned facility; and a line called B Is for Baby, “which competes well with the national brand, in part because it's less identifiable as a corporate brand,” Coyne noted.

* AISLE 1, the chain's fuel stations and adjacent convenience stores. Raley's opened its first fuel centers in 2004 and currently has 11. Coyne declined to comment on plans for future openings.

The chain uses the stations to reinforce its value proposition — originally offering 10 cents off per gallon with a $50 grocery purchase, but upping the offer last December to 25 cents off per gallon with a $100 grocery purchase.

There are also automated drive-through car washes for $5 at the fuel centers, plus convenience stores that carry a variety of grab-and-go items not available in the adjacent supermarket.