Houchens Converts More Stores to IGA

ELLIOT ZWIEBACH

BOWLING GREEN, Ky. — Houchens Industries here is converting all of its Houchens, Buehler and White's-banner stores to IGA because of the increased recognition that brand carries, Jimmie Gipson, chairman and chief executive officer, told SN last week.

Houchens has already converted 45 conventional stores to the Everyday IGA brand, with plans to convert 43 more stores over the next three years, including Houchens Markets in Kentucky; Buehler Foods in Indiana, Illinois and Kentucky, acquired in mid-2008; and White's Fresh Foods in Tennessee and Virginia, acquired last February.

Houchens will continue to operate 90 conventional stores in its Food Giant group, which includes stores in eight states operating under the Food Giant, Piggly Wiggly and Mad Butcher banners, with no plans to alter those names, Gipson said.

The company also operates 230 licensed Save-A-Lot stores in 15 states and 85 convenience stores, in addition to manufacturing, recycling and foodservice businesses. All retail stores combine to account for approximately 75% of Houchens' total corporate sales, which are estimated at more than $2.5 billion for the fiscal year that ended last month.

According to Gipson, Houchens opted to license the IGA banner for the 88 stores “because we were looking for an opportunity to develop a stronger private-label program than the Houchens brand stood for, and the IGA brand certainly filled that requirement.”

Since the IGA name began appearing on the stores, sales have increased between 7% and 18%, Gipson said, “and we've been able to hold those increases.”

The stores being converted range in size from 18,000 to 35,000 square feet.

Gipson said he sees Houchens' affiliation with a growing IGA as an opportunity “that we believe will make IGA as much of a household name in the future as Kroger is today.”

As more independents align themselves with IGA, Gipson said he hopes they will be able to collectively do procurement and collaborate on marketing apart from their wholesale distributors — to make independent IGA stores a stronger force nationally, he explained.

“Right now most of the IGA's wholesaler distributors would rather push their own brand than promote the IGA lines they carry. So if independents continue to join IGA, what they could do together would be monumental,” he said.

For several years Houchens has operated a unique store concept it developed with IGA called IGA Crossroads — a format that combines a convenience store with gas pumps with a small conventional supermarket that's located along a country highway that people are likely to drive past on their way home from work.

Houchens operates seven IGA Crossroads stores, which are priced like a conventional supermarket and designed for a $25 shop on each visit, Gipson explained.

“In my career this is the only format that customers keep asking when we plan to put one in their community,” he said.