Fresh Performance

ELLIOT ZWIEBACH

Roanoke's newest supermarket is one of Richmond's oldest.

Ukrop's Super Markets, a Richmond, Va., fixture for 70 years, moved 200 miles west at the end of June to open its first store in Roanoke, which has become, right off the bat, one of the chain's highest-volume units.

But Bobby Ukrop, president and chief executive officer, is not taking anything for granted.

“It's just one little store,” he told SN. “Roanoke has embraced us in a way we haven't been embraced in any other new market, and our reception there is the best we've ever experienced, with the highest two-week opening sales total in our history. So I'm cautiously optimistic.

“But two weeks don't make a success, and we could still be just a flash-in-the-pan there. Certainly it's always better to have a great start, and we believe we're making a connection with the people there, but I think we'll be a better food retailer there in six months as we continue to learn from our customers.

“We also hope to learn some things in Roanoke that we can take back to Richmond.”

Ukrop was not willing to discuss specific sales results at the Roanoke store.

Despite the early signs of success, the company is not out scouting additional store sites there, Ukrop said. “Right now we're focusing on the one store because we want it to be the best we can make it, and if we're successful, we might look at other locations.

“But we're not in any hurry.”

Part of his caution in Roanoke is based on the chain's experience opening a store in 1997 in Fredericksburg, Va., “where it took us four years to get the results we wanted,” he said.

Ukrop said he sees further strategic opportunities for expansion in Richmond. “But we have no plans to go to the Tidewater area [in the Norfolk-Hampton Roads region of southeastern Virginia]. We see our opportunities in the southwestern part of the state,” he said.

Roanoke is Ukrop's 29th supermarket. Local observers estimate the chain's annual sales “somewhere north of $600 million.”

Ukrop's operates 25 stores in Richmond, two in Williamsburg (about an hour south of Richmond), one in Fredericksburg (about an hour north) and the one in Roanoke; it also operates a specialty store in Richmond called Joe's Market, named after the chain's late founder, Joe Ukrop, father of Bobby Ukrop and his brother Jim, the company's chairman.

The chain opened one store last October — its second site in Williamsburg — and one new store, the Roanoke location, this year. During the next 12 months the chain plans to open only one new store — a relocation in Richmond — and complete four remodels.

“But we're a slow-growth company, with no pressure to open a certain number of stores,” Ukrop said.

Roanoke is located in the Blue Ridge Mountains in western Virginia, about 60 miles north of the North Carolina border. With a population of about 300,000, the Roanoke metropolitan area is about one-third the size of metro Richmond, which has about 1 million people living there.

But Ukrop's is no stranger in its newest market. “A lot of people in Roanoke used to live in Richmond, and they feel very much at home in our stores, so name recognition is not a problem for us there,” Ukrop explained.

At 58,000 square feet, the store is slightly smaller than the 60,000- to 62,000-square-foot units Ukrop's has been opening but is geared to high traffic, with 12 conventional checkstands and four self-serve checkstands, plus four dedicated express checkstands on the prepared food side of the store.

The primary challenge working with the site was that it was a little small for the amount of parking space Ukrop's needed, so the company designed a two-level parking lot, with ground-level parking supplemented by additional parking under the store. “That's an innovation we brought to the table,” Ukrop pointed out.

To accommodate customers who park underneath the store, Ukrop's installed a conveyor belt that attaches to the underside of certain carts to move groceries to the lower level while the customer rides down an escalator adjacent to the conveyor.

Staying Relevant

Ukrop's, established in May 1937, will kick off its 70th anniversary celebration beginning next month and extending through December.

“I prefer to think of us as 70 years young,” Ukrop told SN, “because how old you are chronologically is not as important as staying relevant, and we try to stay relevant by providing a great place for customers to shop and for associates to work.

“Though there's certainly more technology involved in the business today, we still like to give personal service. And while our message today may be delivered in different ways, our values have remained the same: to be helpful, honest, safe and hard-working.”

He said he and his brother looked over some notes they had written more than 30 years ago “and realized we were saying the same things then as we're saying now. A lot has changed, but people still want to be treated with respect and dignity, and that's what we're still striving to do.”

Ukrop, 60, said he and his 70-year-old brother have no plans to retire. “In a family business, you never retire,” he said.

When the time comes to pass the business on, there are several third-generation family members as well as non-family executives to run it, Ukrop pointed out.

Ukrop's operates only six days a week, closing on Sundays, and it does not sell alcohol at any of its stores. Asked why it maintains those policies, Ukrop was terse. “It's what we've chosen to do since we started in business. But we're not about what we're not doing,” he said.

What Ukrop's is about doing is offering one of the broadest selections of fresh prepared foods in the industry — an effort it launched in 1976 when it bought a local bakery and began distributing baked goods from a central location.

“The stores at that time were only an hour away from the central bakery, so we learned how to make top-quality scratch items and distribute them to the stores,” Ukrop recalled.

“Then we traveled overseas and saw what they were doing with prepared foods, particularly in England, and we decided that, rather than trying to make all the food at all the stores, we could work from a central kitchen and control the quality better.

“We started with 10 items in 1989 and today we're producing 160 chilled items every day, in addition to other items made on-site at the stores. There are very few supermarket companies doing what we're doing.

“People say a supermarket can't be a restaurant, but we're doing what people said you can't do.”

Asked about the longer distance to deliver product to Roanoke, Ukrop replied, “It just means driving a little bit longer.”

The fresh food component is aimed at making the stores part of an extension of the shoppers' neighborhood, he said. “We think we can make shopping fun by providing a place for people to see their friends, where they can choose either to buy ingredients for a meal or come in to share a meal or take meals home.

“So with our in-store cafes, we've become another place, like Starbucks, where friends can get together.”

‘Incredible Location’

The decision to expand to Roanoke occurred indirectly, Ukrop recalled, when a developer friend there called him to ask for advice on what stores he might invite into the new shopping center he was contemplating building on some industrial property close to the city's downtown area that had been deemed worthless for several years.

“He had already pitched the site to Fresh Market and they turned him down, though they've since opened a store about a quarter-mile away,” Ukrop said.

“But he already had a commitment from Walgreen to locate in the center, and that attracted us. Then we realized what an incredible location it was — just a mile from Carilion Medical Center, the biggest employer in Roanoke, and two to three miles from downtown, with easy access, plus the fact a lot of folks with a lot of discretionary income drive past that site.

“So by the time he asked if we might we interested, we were.”

Ukrop's and Walgreen are the center's first tenants, Ukrop noted, “but the developer has a vision for re-urbanization of the area, and more stores like us, who do not operate in Roanoke, will be moving into the center, which will help the area come back.”

In Roanoke, Ukrop's is going up against the same operators it competes with in Richmond — Kroger, Food Lion, Fresh Market and Wal-Mart Supercenters — albeit from a significantly smaller base.

But Ukrop said he believes his company has advantages that position it not only to compete well but also to have a positive impact on the market.

“Some of those other companies have been in Roanoke a long time and they do a nice job,” he explained, “but none of them has a 200-seat cafe or a full-blown culinary program.”

He also said he believes Ukrop's is bringing “positive pricing vibes” to Roanoke with its “consistent low-pricing” program, which it introduced chainwide in mid-2006 with the promise of more consistent prices all the time.

“We realized we were spending a huge amount of time as a conventional operator taking prices up and down on weekly specials,” Ukrop explained.

To reinforce its commitment on pricing, the chain introduced a “pricing challenge” — a program it is using in Roanoke — in which anyone who buys 20 items at Ukrop's and brings proof he compared prices on those items with those at any other chain will receive $10, plus double the difference if the other outlet has a lower total.

“It's a good way for us to check where we stand in the market,” he explained. “Our goal is not to be the lowest-priced merchant — we usually lose to Wal-Mart and beat everyone else — but we want people to know our prices are good, even though we run nice, clean stores with great products.”

Although the Roanoke store opened June 27, the pharmacy will not open until late August, Ukrop said. “We want to get the right people, and we haven't been able to do that yet because something fell through.”

The fact Walgreen is next door is not a detriment to the company's pharmacy operation, he added. “It helps draw traffic, and though we obviously sell some of the same products and offer some of the same services, we co-exist with drug stores at other locations and we will do so in Roanoke.

“Our model depends on being a high-volume food store, and the pharmacy makes a nice fit.”

Ukrop's was one of the first chains in the industry to offer loyalty cards, beginning in 1987 — at about the same time as Vons in Southern California, Ukrop acknowledged. While the chain does make use of the customer data it collects, Ukrop said he was not willing to talk about it for competitive reasons.

One way Ukrop's utilizes the data is through its Savings Spot program, introduced in May, in which customers who scan their cards at a kiosk near the store entrance receive up to eight personalized coupons and other messages based on their shopping history.

Because it has not yet collected enough shopper data in Roanoke, Ukrop said the company has not yet introduced the program there.

Guided by ‘The Golden Rule’

Ukrop's Super Markets started life modestly in 1937 as a single-store operator on the south side of Richmond, Va.

As it celebrates its 70th anniversary this year, it's the market-share leader in the city, with out-of-town operations in the Virginia cities of Williamsburg, Fredericksburg and, since June, Roanoke.

Joe Ukrop was a meat manager for A&P when he and his wife Jacquelin opened a 500-square-foot grocery store in May 1937 adjacent to a 3,000-square-foot Safeway.

Committing the business to a single principle — The Golden Rule — the business prospered by treating customers the way the owners wanted to be treated, according to a corporate history.

“When our parents began the business, treating customers, associates and suppliers as they personally wanted to be treated just seemed natural,” Bobby Ukrop, Joe's younger son and the company's president and chief executive officer, said. “Today, that natural instinct has proved to be a terrific business policy.”

Part of that policy survives in the carryout service Ukrop's provides as a matter of course to all customers.

Within four years of opening the first Ukrop's store, the business was able to expand into the Safeway space when the chain moved to a larger location, and by 1953 the store had been expanded twice more to 10,000 square feet.

Ukrop's remained a single-store operator for the first 26 years of its existence before older son Jim Ukrop, now corporate chairman, urged his parents to allow him to open a second store in 1963 and then a third store in 1965, which he managed. By 1970 the company had five stores, all on Richmond's south side.

Two years later Ukrop's crossed the James River to the city's north side and opened a store managed by Bobby Ukrop. Over the next six years the company closed the original store and opened five new ones.

In 1976 Ukrop's got into manufacturing when it acquired Dot's Pastry Shop, a major Richmond-area bakery. While it still follows Dot's original recipes — baking from scratch using only the finest ingredients, the corporate history points out — Ukrop's has expanded the assortment to include bread, rolls, doughnuts, bagels and European specialties, manufactured not only for the chain's stores but also for other supermarket customers in the eastern U.S.

Between 1971 and 1981 Ukrop's share of Richmond's grocery volume grew from 7% to 26%. By the time the company marked its 50th anniversary in 1987 it had opened 10 more stores.

Two years later it launched a central kitchen to supply chilled prepared foods to its stores. Beginning with 10 entrees, the kitchen's recipe files have grown to more than 500, including sandwiches and ready-to-serve produce items.

With its two manufacturing operations in full swing, Ukrop's added a grill and cafe, chilled prepared foods and European pastries to a store it opened in 1989.

In 1987 Ukrop's was one of the first chains in the U.S. to develop a loyalty card program.

After opening eight more stores in Richmond during the 1990s, Ukrop's moved outside its home base for the first time in 1997 when it expanded to Fredericksburg, an hour north of its core market; two years later it expanded to Williamsburg, an hour south.

In 2001 Ukrop's opened a 12,000-square-foot neighborhood market in Richmond called Joe's Market, in honor of the chain's founder — a specialty store offering regional items, hard-to-find cooking ingredients, fresh and prepared foods, and a cafe.

After closing two Richmond stores in 2003, the company opened three new stores later that year in historic sections of Richmond, including one site that also houses a YMCA.

In mid-2006 the company dropped its high-low pricing program in favor of “consistent low prices,” which offers more level pricing on a year-round basis.

Last year the chain opened its second store in Williamsburg, and in June, a month after marking its 70-year anniversary, it opened its 29th store — a 58,000-square-foot unit in a re-urbanized area of Roanoke, approximately 200 miles from its Richmond base.
— E.Z.

Prepared Foods Anchor New Ukrop's Store

What Richmond, Va., already knows about the Ukrop's Super Market experience, Roanoke is just beginning to find out.

With one-third of the sales floor devoted to prepared foods, the Ukrop's that opened late last month in Roanoke is a new experience for many customers, according to Jason Woodcock, general manager of the 58,000-square-foot store.

“For people who haven't been to our stores in Richmond, it's quite jaw-dropping, no question about it,” he told SN. “Most people say they haven't seen anything like it, and it's certainly something Roanoke hasn't had.

“We may be just one store in a city of Krogers and Food Lions, but we're tryin g to create an atmosphere that keeps customers coming back, and we do that not just with customer service but with the fresh and delicious foods we make available.”

One fresh offering that's unique at the Roanoke store is the chain's first Bistro Bar — a 16-foot counter featuring hot entrees and side dishes prepared daily by the store's on-site chefs and served by the plate for in-store dining or takeout at lunch- and dinner-time.

The selection usually includes two meat items and several vegetable sides, priced at $6 to $15 per plate.

The Bistro Bar is in addition to the hot foods bar at several Ukrop's, which feature items prepared in the chain's central kitchen rather than at store level, Woodcock explained.

Customers entering on the right side of the Roanoke store walk past the floral department on the left and a Starbucks on the right, then pass by four express checkouts devoted exclusively to purchases from the prepared food section.

“Most Ukrop's stores have just two express lanes, but we've noticed increased traffic at newer stores,” Woodcock noted. “And since prepared foods is the No. 1 category in the store, we wanted to make sure customers can get in and out as quickly as possible, so we've added two additional lanes at the store here.”

With so much to tantalize the eye, Ukrop's puts a major emphasis on sampling — not just items the store selects and offers to customers at sampling pods but also anything customers ask to taste, he pointed out.

“Getting food into their mouths is very important to us, so customers can ask to sample anything in any of the cases. I've seen a lot of people taste items and become regular purchasers,” Woodcock said.

Grab-and-go, and more

The prepared foods department offers an array of offerings, one after another, Woodcock pointed out, including the following:

In-Store Seating

To accommodate in-store dining, the store has a cafe on the mezzanine level above the store's right-hand entrance that can accommodate 200 people, plus a dining room at store level — called the Celebration Room — that can accommodate another 50 people when it isn't being rented out as a meeting place by community groups.

The produce department runs from the front of the store to the back opposite the prepared food offerings, with a salad bar at the center of the section and an exposed preparation area at the back.

“Produce is very much right in your face,” Woodcock said. “Aside from the lengthy display of refrigerated items, there are huge displays of seasonal fruits at the front of the department.”

To emphasize the chain's efforts to buy locally, the produce sections display photos of the farmers, along with the items they raised, on banners hanging from the ceiling, as part of a chainwide program.

“It's a neat concept,” Woodcock told SN, “and several customers have told me they appreciate the fact we buy produce from within the state.”

Near the back of the store is a self-service meat case, which includes a selection of All Natural beef, pork, chicken and shrimp that is antibiotics-free, vegetarian-fed and humanely raised on small family farms. “Many consumers are more interested than ever in those attributes, and we get a lot of comment when they see we sell it,” Woodcock said.

“It's only been a couple of years since we introduced that offering, and sales are growing steadily, with certain demographics that are more aware of eating healthy buying more of the All Natural beef than others.”

Flanking the service case is a chilled case for chicken and sausages, followed by a sushi bar, which Ukrop's out-sources.

In the corner at the back of the store is an 8-foot service meat case, flanked by a live lobster tank, adjacent to a 12-foot seafood section.

The back wall of the store features a 30-foot case for prepackaged lunch meats, a pharmacy and a 112-foot dairy case.

Along the left side of the store are three aisles of frozen foods — one run against the wall and two back-to-back cases — with three coffin cases in front of the wall freezers for promotional items.

At the front of the store on the left side is the bakery, encompassing a service counter and self-service displays. While most conventional breads are baked-off at store level, Ukrop's uses a local company — Bread Craft Bakery — to supply a variety of artisan breads “to provide a more local flair,” Woodcock said.

Located just behind the produce department is the store's natural and organic section, consisting of four gondola sides that offer packaged, bulk, frozen and refrigerated products.
— E.Z.

Color-Coded Carts

Black cart or red?

Customers shopping at Ukrop's newest store in Roanoke, Va., do their shopping using a black cart but find their order being transported to their car in a red cart.

What gives?

Jason Woodcock, general manager of the store, explained:

Because Ukrop's opted to build on a small parcel of land, it designed the store with two parking lots: one at ground level for about 180 cars and one below the store with 200 more spaces.

To transport groceries to the lower-level parking lot, shoppers must use the carts with the red wheels, which attach automatically to a track on a conveyor that moves the orders down while shoppers ride down on an escalator adjacent to the conveyor.

As a result, when groceries are checked out, Ukrop's asks not only whether customers want paper or plastic but also where they parked.

If they parked in front of the store, carry-out clerks put the bags into the black carts; but if they parked below the store, orders are transferred to the red carts, which have the special attachment to move down the conveyor.

Since Ukrop's offers carry-out service to all customers, it has hundreds of black carts but only about 20 red carts, which are enough for clerks jockeying the carts to and from the underground parking, Woodcock pointed out.

He said he's surprised that most customers seem to prefer the underground parking — “maybe out of curiosity,” he added.

Shoppers can reach store level from the underground parking lot by escalator, which lets them off just outside the store, or by elevator, which puts them inside the store, he pointed out.
— E.Z.