COFFEE BARS PERK UP STORE IMAGE: RETAILERS

ROSEANNE HARPER

Retailers who have put gourmet coffee bars in their stores say that they perk up bakery sales -- but that's just the start.

Coffee bars, especially those featuring espresso-based drinks, also send an upscale message to customers and draw new people into the store.

They also slow down customers and get them to stay longer, and hopefully buy more. They breed customer loyalty and generally make customers feel comfortable while they shop for food, said retailers interviewed by SN about what effects they have seen from their coffee bars.

Making the store a more pleasant place overall is particularly important since studies have shown consumers say they just don't like to grocery shop, said Deb Kowalski, director of operations at Kowalski's Market, St. Paul, Minn.

"Giving customers a break" was a factor in the decision to install a coffee bar at a ShopRite unit in Oakland, N.J., said Robert Clare, vice president of ShopRite of Oakland, which is supplied by Wakefern Food Corp., Elizabeth, N.J. "This is a big store, 68,000 square feet, and the coffee bar breaks up the shopping trip so the shopping experience is more enjoyable," Clare said.

The ShopRite unit became a franchisee of New York-based New World Coffee & Bagels this past fall, and then opened a coffee and bagel bar in the food court at its expanded and remodeled store. The decision to put in a New World operation was also spurred by a desire to distinguish the store, Clare said.

"None of our competitors in this market have anything like this. The perception still is, at least around here, that you go to a supermarket for the prices," he said, pointing out that he wanted to set his store apart with the upscale touch a coffee bar can add.

"Our objective was to open a coffee bar that meets or exceeds the expectations of a Starbucks customer, and our customers do call this a class act," he said.

At Kowalski's Market, Deb Kowalski also said that the espresso bar Kowalski's installed at its White Bear Lake, Minn., store has pushed the store's image up to a new level.

She added that she has learned what a draw the coffee bar can be. That has spurred the company to retrofit another store, in downtown St. Paul, to accommodate a smaller version next to its bakery, similar to the layout at White Bear Lake.

At White Bear Lake, the coffee bar is given a large measure of credit for pushing bakery sales to a point that they make up 7% of total store sales. But Deb Kowalski pointed out that the bar probably has a sales-boosting effect in other departments of the store as well.

"It adds to the shopping experience. I see people buy a latte and then meander through the store with it. [Kowalski's provides cup holders on its shopping carts.] They're not just flying in and out," she said. As they traverse the store, sipping a cappuccino or latte, customers are more apt to shop the whole store, she added.

Indeed, total store sales are up 7% to 10% since the coffee bar went in as part of a remodel a little over a year ago, Deb Kowalski said.

On the subject of customer loyalty, she said the coffee bar is a definite plus.

"We see the same customers buying coffee five days a week," she said.

Harps Food Stores, too, views a coffee bar as a magnet that brings customers back. The company installed its first coffee bar at a prototype store it opened this summer in Springdale, Ark., just a few miles from its headquarters.

"When people like a cup of coffee, they come back," he said.

To Food Emporium, a Bronx, N.Y.-based division of A&P, Montvale, N.J., a coffee bar is seen to brew loyalty. After launching one in a new store in Fort Lee, N.J., last spring, the division is set to install coffee bars in three additional units in 1998, said Bob Damato, deli-bakery director for the 35-unit division.

"When I'm in the store [in Fort Lee], I see some of the same people over and over at the coffee bar," Damato said. Because customers have indicated they want to sit and drink their coffee and eat something with it, the division is in the process of adding more seating at the coffee bar, Damato said.

Making the customer comfortable has a number of benefits, said Deb Kowalski. One that's not immediately obvious, she said, is that the ambiance created by a coffee bar fosters a rapport between customer and associate.

She added that Kowalski's gets valuable feedback about various aspects of the store from customers who frequent the coffee bar.

"Because they feel comfortable and they're not in a hurry, they're apt to tell us if they don't like something or if they do," Kowalski said.

Most retailers that talked to SN about coffee bars said they think the nearer they place them to the in-store bakery, the better. But wherever they are put in the store, gourmet coffee bars in supermarkets constitute a growing trend, industry sources said.

"It's something that's here to stay. I can even see the day when coffee bars will become separate departments [from bakery or deli], just like floral has," said Ed Weller, president of Weller Co., a West Hollywood, Calif., consulting firm that works with supermarkets and manufacturers.