Roche Bros.: True to Its Origins

CHRISTINA VEIDERS

WELLESLEY HILLS, Mass. — Shadowed by chains in New England that possess greater economies-of-scale, Roche Bros. has proved that being big is not better.

In fact, getting bigger is a cause of concern for Rick Roche, chief executive officer of the 17-store, family-operated chain, if it threatens the essence of what has endeared the retailer to its customers, employees and vendors for over half a century.

“As we grow, our biggest challenge is to keep our culture and attitude toward our people, and people's feeling toward us, as it has been since it was a two-man show,” he said.

Roche's father, Pat, and his uncle, Buddy, began the business with a small meat store in 1952 outside of downtown Boston. Both brothers are now retired, although Pat remains chairman of the board. Roche Bros. is now managed by second-generation family members. Besides Rick, his brother Ed is president and chief operating officer, and his cousin Jay is vice chairman.

Nine years after opening their meat shop, the brothers opened their first supermarket in Needham. Store growth since then has been slow and methodical. Building and adding new store locations was done in part to motivate the employees, said Roche. The retailer employees 4,000 associates, whom it considers an integral part of its success.

“It's very dangerous for us to take on four to five stores,” Roche added. “Family groups that I've seen who have done that lose what they had going for them. If some locations become available, we would be very selective and take one or whatever we felt we had the resources and ability to incorporate without losing what makes us who we are.”

By the end of the year, Roche Bros. will have 18 stores, including three under the Sudbury Farms banner — a farmers' market concept — all located in the surrounding cities west and south of Boston. The stores are in locations that include the outer city, such as West Roxbury, which Roche said is their top-producing store, as well as suburbs and resort areas like Mashpee, Roche's first venture on Cape Cod. The stores' demographics are broad and encompass mostly middle-income families.

Roche is building stores in the 40,000- to 45,000-square-foot range. They average about 40,000 items in inventory. Although the layouts are similar, no two stores look alike or are designed quite the same. Each store's aisles are named after the streets of the towns in which they are located.

Two new $15 million to $16 million stores with ground leases are being built this year. A 40,000-square-foot relocation store will go in a redeveloped lifestyle center in Wellesley, adding 10,000 square feet to the sales floor. Another new store will be built in Westborough, a new location for Roche in a fast-growing community that is also served by two Stop & Shops and a Shaw's.

Competition in New England is fierce and includes an array of formats, including drug chains. “The continued growth of alternatives where consumers can purchase food has given shoppers more choices than they ever had before,” noted Paul McGillivray, vice president of sales and marketing. “Our job every day of the week is to make sure Roche Bros. remains at the top of the list of consumers' relevant sources for food,” he added.

A Focus on Customers

While Roche Bros. isn't immune to the competition, so far it has remained unscathed. “Roche Bros.' success is built on its size and focus,” said Bob Sigel, president and chief operating officer, Millbrook Distribution Services, Leicester, Mass., who supplies the retailer with specialty foods.

That focus is squarely on serving their customers' needs, especially in fresh foods, quality products and services.

“Before the term ‘neighborhood marketing’ became such a cliche in our industry, Roche Bros was doing it their way many years ago. Before all the computer models and data, they had their ear to the ground to understand their consumers, and they are responding to their needs in a very positive way,” Sigel added.

Gerry Castagnetti, executive vice president and sales manager at Billerica, Mass.-based Johnson, O'Hare, a food broker that has worked with Roche for the past 25 years, said the chain's dedication to its mission of servicing its customers is unparalleled.

“They will not sacrifice under any circumstances the quality of their organization regarding how they deliver to their consumers. They don't waver from it. They stand firm by it. Their philosophy is to maintain it. They have developed this wonderful aspect of a company that understands their consumers to a tee. More than any other New England retailer, they stay true to the image of pure quality as a consumer-focused retailer,” he said.

Castagnetti noted Roche didn't shy away from building a store next to Wal-Mart in Quincy. “Consumers that shop Roche Bros. are going there not to see the everyday cost. Roche Bros. prices their products at a respectable level and they offer services that nobody else offers. If you are going to shop for price, you go to Wal-Mart. If you are going to shop at a supermarket because you are being catered to and treated better as a customer, then you go to Roche Bros. That is their specialty.”

Simply put, Roche Bros. operates by the Golden Rule. “We treat the customer the way you'd want to be treated. We take that down to the associate level, and treat our associates the way we'd want to be treated — and they take care of the customer because of that,” said Arthur Ackles, director of marketing, during a recent SN visit to a Roche Bros. store in Easton, Mass.

Gary Pfeil, Roche Bros.' general manager, summed up the company's operating philosophy. “We run the cleanest, well-merchandised stores with the best quality possible and have the best people in the industry to do the right thing all the time for the customer.”

Move Over Whole Foods

What has distinguished Roche Bros. from the very beginning is the quality of its perishables. Rather than everyday low prices, Roche promises customers quality and freshness every day. This is possible through an exclusive partnership with its produce supplier, James E. Kilduff, Everett, Mass., which began supplying Roche at its original meat shop.

Kilduff buys fresh produce every day at the New England Produce Market in Chelsea, Mass., and delivers it to Roche Bros. stores seven days a week. Roche is its only customer. “It's possible that what you buy at Roche Bros. came out of the market that very morning,” said Jay Kilduff, vice president of the company. “We aren't guessing a week in advance on the telephone and bringing it in by the load. We buy it as we need it,” he added.

Power aisle displays of produce are the first thing customers see when they walk through the door of a Roche Bros. supermarket, leading with a display of seasonal items at a good value. Some items are tagged as weekly specials. Some fruit are cut open to show their freshness and laid on top of the stackings. The retailer offers and advertises a double-your-money-back guarantee on the freshness of its produce.

What can be said about produce also holds true for Roche's fish department. In 1980, the retailer began an exclusive agreement with M.F. Foley Co., based in Boston and New Bedford, Mass. At one time the fresh fish company supplied major chains, but as the cost of fish rose, those chains turned to refresh programs (previously frozen and thawed at point of sale) to hit their needed price points, said Laura Foley Ramsden, a co-owner of Foley.

“What is so special about Roche Bros. is that they stayed very committed to putting fresh fish in front of their customers and were never willing to go the refresh route,” she said.

Roche doesn't warehouse any of its fish. As with produce, it receives the fish direct daily to its stores just hours after the fish comes out of the water.

“That's why Whole Foods is wonderful,” commented Ramsden. “Even though they aren't a Foley fish customer, they do show retailers that people are dying for good fish. If you build it they will come. People want to eat healthy, fresh fish — all-natural, with no chemicals or treated with CO gas.”

She said Roche's success is based on the retailer's ability to stay focused on its core competency and not deviate. That competency is providing consumers with value. “They will not compromise quality to hit a price point, but they will be extremely fair in their offering,” she said.

Kitchen's Home Cooking on the Go, which features a large variety of hot and cold prepared meals, is another signature department for Roche Bros. The departments are about 4,000 to 5,000 square feet and are manned by a staff of 20 people, including chefs. Pfeil said the prepared meals department is a major point of differentiation for Roche vs. other supermarket competitors. The business is growing and has doubled in sales over the years to represent 8% to 10% of total store sales, which are about $550 million a year. Most everything is cooked on the premises. However, a separate company that Roche owns, Hans Kessel, makes all of the 20 different varieties of salads sold.

At the Easton store, 4 feet of space was devoted to sushi and 12 feet to panini sandwiches, which are new additions to the 30-foot Kitchen's section, which features a Chef's Station offering complete meal solutions for lunch and dinner.

The fresh-quality statement is carried into the deli, bakery and meat departments. All baking is done on the premises. In meats, supplied by Agar, Roche carries a range of choice, Angus and natural.

Of all its New England competitors, Whole Foods Market may be the biggest threat to Roche Bros., because of its position as a retailer in high-quality perishables. But Roche doesn't flinch. “I know Whole Foods has made a name in perishables, but we don't have to be ashamed to hold our products up to anything they sell,” he said.

Offshoot Operations

The retailer also has been astute in branching off into other businesses. Its Creative Entertaining enterprise has grown into a $10 million-a-year catering operation. A large kiosk for the business is situated off the perishables area at the Easton store. Roche works with a service company that can cater events as small as tailgate parties to large events involving 400 to 500 people.

Roche's Internet home shopping delivery service was launched at the end of 2005 and is showing promise despite Ahold's Peapod service in the area. Orders are currently averaging between 1,400 and 1,500 a week, said Ackles, who was responsible for launching the service.

While being small works to Roche's advantage in perishables, that is not the case in grocery, where most products are commodity-based, McGillivray said.

It's been difficult for the company to maintain its private label, which it has been producing itself, he noted. At the end of last year, Roche joined Chicago-based Topco Associates, and three weeks ago it introduced Topco's Full Circle line of organic products.

McGillivray said the company is playing catch-up in the natural/organic grocery arena. The Full Circle line is a major step in expanding that offering.

“Our association with Topco is to refine and grow our whole private label. We are looking forward to this association with Topco and their buying ability,” he said.

Roche also changed its grocery supplier several years ago from C&S Wholesale Grocers to Bozzuto's, Cheshire, Conn., because it was simply a better fit. “How they do business and the way they work is very similar to ours,” said Pfeil. “They deliver what they are supposed to deliver, when they are supposed to deliver it, and at a fair price.”

Roche noted that Bozzuto's is innovative. “They're always asking our opinion on how they can do it better, which is a great thing to see,” he said.

Michael Bozzuto, chairman, president and CEO, said the relationship with Roche goes both ways. “They exude a caring philosophy to their communities, their employees and their supplier relationships. That is a common characteristic you see with all our customers. We are in it together, and work together to get to the common goal.”

Moving ahead for Roche Bros., it will be more of the same. Roche executives say they will continue to be innovative and raise the bar in all their departments.

The retailer is always experimenting and trying new concepts. At the Easton store, soup, chicken wings and antipasto salad bars were new. A new gluten-free product section is showing good sales. New in-store signage calls out its natural/organic products.

“We are doing lots of little things,” McGillivray said. “All our efforts are incremental and make our company better and better every day for our customers in an increasingly competitive marketplace.”

A Fish Story

NEW BEDFORD, Mass. — It was 1980 and Roche Bros. had just opened its first Sudbury Farms store, a farmers' market format, in Sudbury, Mass. It was there that Roche first introduced M.F. Foley Co. fish, which has since become a key element of the retailer's reputation in perishables.

Laura Foley Ramsden, a co-owner of the company, based here and in Boston, which supplies fresh fish to fine dining establishments and specialty retailers, recalls that her grandfather, Frank Foley, handed Bud Roche seven pages of handwritten notes on how to handle the fish before he would allow it to be sold at retail.

“They wouldn't sell to us unless we agreed to operate by their handling standards,” said Rick Roche, chief executive officer of Roche Bros., based in Wellesley Hills, Mass. “That made us good fish salespeople because we learned how to handle it right and made sure it was the freshest around.”

While a lot of retailers pay lip service to following quality standards, “Roche is committed to the quality of the product,” Ramsden said.

She said 13 of Roche's seafood specialists were at their plant several weeks ago for education and training to learn more about the perishability of fish and proper handling. “They're committed to making time to educate paid employees.”

She also noted that Roche knows how to manage the size of its staff. “They recognize that with 17 stores, they can't expect one person to be spread so thin.”

The company is also known to reserve time for its managers to be active in share groups, where they can share new merchandising ideas and competitive information, Ramsden said. “They are very involved in those organizations — that helps them act like a bigger chain than they are, considering their size.”

At the Easton store, the fish department was running about 2% of the store's total sales.
— C.V.

Branching Out

WELLESLEY HILLS, Mass. — The launch of Roche Bros. Home Delivery service in late 2005 marked a turning point for the retailer in terms of its growth and branding strategy.

It meant the company was reaching beyond its core market radius of 3 to 7 miles from its stores to new shoppers living within 15 to 20 miles of the stores, and beyond. These consumers weren't quite as familiar with Roche Bros., said Arthur Ackles, director of marketing, who helped get the service off the ground.

“It is an interesting transformation we are taking,” said Ackles, who began his career with Roche Bros. as a teenager in 1987 as a part-time service clerk and has remained aboard ever since. “As we've gotten farther out to the towns of Marshfield, Mashpee, Burlington and Acton, we have come to realize that not everybody knows who we are.”

A major promotional push consisting of radio, direct mail, print media and public relations was made to publicize the home delivery service. In a little more than a year, the service has grown to an average of 1,400 to 1,500 orders per week and is expected to be profitable soon.

“The addition of the home delivery service really changed the dynamics [of our branding],” explained Paul McGillivray, vice president of sales and marketing. “As a separate business, we approached the advertising and marketing separately.”

As the marketplace becomes more fragmented, McGillivray believes it is important to communicate to consumers the values for which the company stands and to clearly remind consumers of the benefits of shopping at Roche Bros.

So far, the company's main advertising push has been through the distribution of 550,000 weekly fliers. Ackles' first priority is to concentrate on in-store branding and identify through new signage the company's thrust into organics, and to call out specialty items that are unique for customers. However, a broader brand strategy will be an important element in Roche's success going forward, executives said.

Roche decided to launch its home delivery service because it felt it was losing customers to Ahold's Peapod. “We realized there were customers out there that needed home delivery and they couldn't get to the supermarket. We weren't able to offer them any solution, but Peapod was,” said Rick Roche, chief executive officer.

Roche said what distinguishes his company's home delivery service from Peapod is the separate frozen, cold and ambient-temperature compartments in his 17 trucks. Peapod is said to have unrefrigerated trucks, with orders shipped on dry ice, Roche executives said.

Roche fulfills orders for areas surrounding its entire chain from eight store locations — except on the Cape, where home delivery is not offered. It is not a warehouse operation. Personal shoppers pick the orders out of the stores, which contain a selection of some 20,000 items. Deliveries go out three times a day. The service costs $9.95 per delivery, no matter how large or small the order. Sales items and in-store pricing are the same for home delivery customers.

“Roche Bros. customers expect our trademark service, selection and fair pricing when they shop in our stores, and now they will experience the same level of satisfaction coupled with convenience in our new home delivery service,” said Ed Roche, president and chief operations officer, at the time the service was launched.

“It gives our current customers another option, and future customers a reason to shop with us,” said Rick Roche.
— C.V.