Schnucks Set to Debut Small-Format Culinaria Store

MARK HAMSTRA

ST. LOUIS — Schnuck Markets is scheduled to debut its new small-format urban store here next week, marking the family-owned chain's first venture into that burgeoning niche of concepts that include test vehicles from Wal-Mart, Safeway, Jewel-Osco and others.

For Schnucks, it is one of two stores opening over the next few weeks that take the company in new directions with its store design.

In addition to Culinaria — A Schnucks Market, the small-format store that is opening in downtown St. Louis, Schnucks also is preparing to open a new prototype for its conventional format in the suburban community of Des Peres, Mo.

“These next two stores are going to be the culmination of the planning we've had under way for a number of years,” Scott Schnuck, chairman and chief executive officer, told SN.

The 23,000-square-foot Culinaria store, slated to open Aug. 11, will seek to offer a full grocery shopping experience for the area's downtown residents as well as take-out options for the daytime cubicle dwellers. It will include an expanded prepared-food offering for all three dayparts, along with a seating area on the 6,000-square-foot mezzanine level and possibly outside the store.

“It will have the full variety of products for someone who needs to do a full shop, and it is also tailored to meet the needs of a large office population that will be there during the day in terms of what we will offer from a carry-out standpoint,” Schnuck said.

The area has seen a lot of old office space converted to residential lofts, he explained, and although the growth of residents has slowed, people are continuing to move into the neighborhood.

“We might be a little ahead of our time, but we have a good location, and we think the first one in might be the ultimate winner,” Schnuck said.

In addition to an expanded take-out selection, the store also will feature the Culinaria brand prominently inside the store, he said.

“We will have Schnucks-branded products, and a lot of Culinaria-branded products, services and departments,” Schnuck explained.

Previous reports indicated the store would also include hot food bars, wine and “culinary education” components.

The store also has on its side the fact that it is the only pharmacy in downtown St. Louis, Todd Schnuck, president and chief operating officer, explained.

Schnucks, founded 70 years ago in North St. Louis, already operates eight other locations within the city limits, but Culinaria, on the ground floor of the Ninth Street Garage on the corner of North 9th Street and Olive Street, will be its first in the heart of downtown.

While the Culinaria concept will be a completely new food retailing concept for the company, the 73,000-square-foot replacement store in Des Peres represents the next wave of development around the chain's conventional-store format.

“That's really going to be our flagship store,” Scott Schnuck said. “It's going to be fantastic — it will have the latest thinking and new concepts in it.”

The store will include a cooking school, where the niece of Scott and Todd Schnuck, Lucy, a graduate of the Culinary Institute of America, will be involved. The daughter of Mark Schnuck, who runs the company's real estate business, is one of three members of the fourth generation of Schnucks who are helping run Schnuck Markets today.

“One of the things we have been trying to work on is driving the food expertise in the company, to provide a better experience for customers,” said Todd Schnuck. “This is an example of how the next generation is going to add to that.”

Although details about the new flagship store have not been released yet, Todd Schnuck said the Des Peres location will have “a broader presentation of prepared foods that can either be eaten in the store or taken home, including some new concepts in that area for us.”

The store will also have an expanded wine and liquor offering, with an in-store spirits specialist on site.

Although Schnucks is opening the two new locations amid the worst recession in recent memory, Scott Schnuck said the company overall is cutting back on new-store development to focus on shoring up existing operations across the 105-store chain.

“Our commitment has been to our existing fleet of stores — providing an offering to our customers that will be competitive for the long run,” he told SN. “We have shifted more of our spending — particularly next year, but this year as well — to upgrading our existing stores.”

The company has been focused on improving pricing in Center Store “to get closer to Wal-Mart,” Scott Schnuck said, while at the same time seeking to differentiate in other areas, including through service and in the stores' perishables offerings.

Although the privately owned company does not disclose financial results, Scott Schnuck described the company's performance as “doing well,” given the highly competitive environment.

“I would love our sales to be better than they are, but looking at the public companies out there, we would be on the higher end of the customer-count side for the companies that are reporting,” he said.

67
Number of Schnucks locations in metropolitan St. Louis.
Source: Schnuck Markets