RETHINKING THE PIG

MARK HAMSTRA

For the past 60 years Piggly Wiggly has been a big name in the small towns of South Carolina. But The Pig, as it is affectionately known, is getting gussied up.

With the opening last month of an experimental new store in an upscale development in Myrtle Beach, S.C., Piggly Wiggly Carolina Co. has taken a step in a new direction.

“We are sticking our neck out, but it makes sense,” said David Schools, chief executive officer of the North Charleston, S.C.-based company, in an interview with SN at the store's grand opening. “We have done other cutting-edge things, so we said, ‘Why not do this?’”

The 43,000-square-foot store represents a rethinking of traditional grocery merchandising — no long rows of gondolas with endless stacks of jars and cans, but instead a series of sections based on categories of food. Canned, fresh and frozen vegetables are together in one section, for example, while in the bakery area shoppers can find not only store-baked goods but manufacturer-baked products as well, along with all the components needed for customers to bake from scratch at home.

The layout parallels in some ways the food groupings that have been tested at Food Lion's Bloom concept and in Marsh Supermarkets' lifestyle stores, but Piggly Wiggly infused some new ideas into the format and wrapped the whole store in a thick coat of Southern charm.

“This has really been a three-year to four-year-long process,” Schools told SN. “We will always serve the small towns and the local rural folks like we do today, but this store positions us to where we want to go in the future.”

He said the company — which operates about 125 Piggly Wiggly locations, mostly in South Carolina, as a franchisee, and supplies another 25 Piggly Wiggly franchises within its operating area — is looking at both the new Piggly Wiggly format and the company's upscale Newton Farms banner as opportunities to grow the company.

Other franchisees on the outskirts of Piggly Wiggly Carolina's operating area prevent the company from expanding in some directions, Schools explained. But the new format will seek to reach a more affluent customer base than many of its stores do, allowing it to expand in new communities within its current territory.

“We want to give this one a little time and see how it does before we blow it out, but that will happen pretty fast, we think,” Schools said. “We are going to aggressively look for opportunities.”

He said that when he recently met with some of his key regional operations people, they were excited about the potential for the concept.

“To a man and woman, they were enthusiastic about this store, and they all want to build one in their area,” he said. “They are going to be calling me up and saying, ‘I've got a great spot for a new Pig.’”

Schools said the company will look for sites “in any market that's not a rural market — it could be Charleston or Columbia S.C., or Savannah, Ga.”

Piggly Wiggly owns its own construction firm, called Newton Builders after the chain's founder, Joseph T. Newton Jr. It generally builds about three or four new or replacement stores per year.

Newton Farms, the chain's three-year-old single-store operation in the upscale resort community of Kiawah Island, S.C., and also named after the founder, has fewer restrictions on its geography than the Piggly Wiggly banner, however.

“With the Newton Farms banner, we can go where we want,” Schools explained. “We spent a lot of time designing that, and we think we can build it out.”

Many of the elements of the Newton Farms concept were borrowed for the development of the new Myrtle Beach prototype, he said. The company even brought Newton Farms' chef over to the new Myrtle Beach location.

One of the defining elements of Newton Farms is its focus on prepared foods and meal solutions, something that has become the core of the design at the new Piggly Wiggly experimental store.

“We took what we did at Newton Farms and expanded it,” Schools explained. “We are amazed at the percent of sales we do in the deli-bakery-prepared foods area at Newton Farms. Our typical deli-bakery might do 10% of store sales, but Newton does 25% to 30%.”

Asked for a projection of total-store sales at the new Piggly Wiggly prototype, Schools offered a one-word answer: “Big.”

“The residential real estate market is slow right now, but there are new residential units all around this development, and new ones that are going to be built,” he said. “When they start selling, we really think this is going to be a home-run unit.”

He noted that the company's beach locations generally do their highest volumes in the summer, but he expects the new store to perform well year-round because it is located in the development.

He projected that prepared foods at the store will be in the range of 20% to 30% of total store sales, which include sales through the in-store Dream Dinners make-and-bake franchise — which, like the Starbucks at the store's entrance, is owned and staffed by Piggly Wiggly Carolina.

Sales volumes at typical supermarkets operated by the company vary by location, from as low as $75,000 per week at some of its tiny small-town stores to $750,000 per week at its highest-volume locations. Company sales totaled $860 million last year.

“It is a very broad range,” Schools explained. “Some stores are literally 30 to 40 years old, they are in small communities with not a lot of growth going on, and we are the big deal in town — and we love that. If you have a Piggly Wiggly in Eulonia, Ga., you are like the mayor of the town. Everybody knows you.”

The development of the new Myrtle Beach location became a rallying point for the company's employees, he said.

In 2005, Piggly Wiggly Carolina became 100% owned by its employee stock ownership plan, or ESOP, after the fund bought out most of the shares that had been held by the company's founding family. Now about 3,000 of the company's 5,500 workers are shareholders who receive a portion of their pay in company stock.

Before construction, Piggly Wiggly trucked one of the 60-foot steel beams that was used in building the store to its distribution center in Summerville, S.C., and hosted a company picnic for employees to sign it.

“It was a symbol of being a part of the future of Piggly Wiggly,” Schools explained.

Diane Colgan, vice president of marketing at the company, said she agreed that the new store provided an emotional lift for employees.

“We think this shows the company is continuing to innovate and move into the future,” she told SN. “I also think that doing it with the Piggly Wiggly brand, and not doing it with the Newton Farms brand, was very important in the company, because it shows that this brand can stretch.”

Piggly Wiggly has a sense of pride in being somewhat of a Southern icon, she explained.

“We did a significant amount of research [about 2½ years ago], and we were happy to learn that the brand means a lot of different things to different people,” she said. “It wasn't just focused on food, it was focused on being a company in the South, and doing those things in the community that mattered.

“We weren't always quite as polished as some of the other stores, but we are real, and genuine, and we feel that we are a little different, being employee-owned, and we feel that the way we drive our business is a little different.”

That research led to the development of the company's “feeds your life” marketing slogan, she explained.

“It's obviously very literal with groceries and food, but we also ‘feed your life’ with information and community-based programs,” Colgan said. “It might be going to the beach and having fun, or it might be doing things outside. It just fits our Southern heritage.”

The company's folksy personality is reflected in the decor of the new store, which, for example, uses wooden hutches instead of endcaps, and features displays of traditional Southern delicacies.

“The great thing is that Southern foods are really popular right now,” Colgan said. “Some things people have been eating for hundreds of years, like collard greens and cornbread, are actually gaining popularity as well through the Food Network — it works for us, but it's actually part of who we are, and we don't forget that.”

The company markets about 1,000 items under the Piggly Wiggly brand, which it considers a national-brand equivalent, but it also offers the Top Care, Valu Time and Price Wise brands through the Topco cooperative. This month, it is scheduled to add Topco's Full Circle natural and organic products, Colgan said.

Piggly Wiggly Carolina is self-distributing. It has a perishables warehouse in North Charleston and another about 40 miles away in Summerville for dry goods.

The Summerville warehouse is also designed to ship individual units of product, or “eaches,” as they're called — a reflection of the small-town nature of many of the company's stores.

“It allows us to have a broader selection in a smaller store, because you don't have to have as many facings,” Schools explained.

Perhaps one of the most telling things about Piggly Wiggly's product offerings is its Piggly Wiggly merchandise, which includes beer coolers, T-shirts and other paraphernalia. At some beach locations in the summer, individual stores sell as many as 1,000 Piggly Wiggly T-shirts per week, Colgan said.

“As a marketer, that's a dream — that people are willing to buy your shirts and wear them,” she said. “We don't always know why, but the Piggly Wiggly brand is kind of considered a little bit cool. It has its own life to it. It's kind of a little kitschy and fun, and it's not pretentious or anything. It's a pig, and we like that.”