Pro's Ranch Markets Expands

ELLIOT ZWIEBACH

EL PASO, Texas — Pro's Ranch Markets is on the move.

With the opening of its first Texas store here in late September, owner Mike Provenzano is contemplating a rapid expansion of his Hispanic-oriented chain, with plans to expand to New Mexico early next year with a store in Albuquerque, followed by three more stores in Phoenix and possibly a second store here.

He's also hoping to move back into Los Angeles, with an eye on potential locations in Las Vegas as well.

“We've spent the last two years settling on our business model and our strategic plan,” Provenzano told SN, “and now the sky's the limit. Our model works, and we're looking forward to opening a lot of stores.”

The eight Pro's Ranch Markets that preceded the Texas opening — four in Central California and four in Phoenix — are all high-volume stores that cater primarily to a Hispanic clientele. They are merchandised “in a very upscale style, comparable to a Whole Foods,” Provenzano said.

Though he declined to pinpoint his annual volume, local observers estimate it at approximately $225 million.

What he and his four sons did during the two-year pause in store openings was to learn more about the Mexican culture his stores target — “about their foods and their delicacies and the differences from one Mexican state to another,” he explained.

“We also learned to manage from afar, so that as we expand, we can oversee the stores properly,” he added.

The company also updated its information systems, accounting systems and logistics; established a code of business standards; intensified its use of category management; developed an intranet system for internal communications; “and we worked hard on developing our human resources so we can be a company like Wegmans,” Provenzano said, referring to the Rochester, N.Y.-based chain that ranks among the Fortune 100 Best Places to Work.

Pro's also began broadening its assortment to appeal to a wider range of customers, he noted. “We're trying to reach out to different nationalities to do a better job of serving whole communities,” he told SN.

Provenzano said approximately 15% of Pro's Ranch Markets' business comes from non-Hispanics, though he expects that ratio to grow “as we carry more and more non-Hispanic items, both fresh and packaged.

“For example, although Hispanics don't buy a lot of frozen foods, other shoppers do, so we added 15 more doors in the frozen section of our El Paso store to accommodate those customers.”

At 88,000 square feet, the new store is Pro's largest, located in a former Smith's Food & Drug Center that's been closed for more than three years.

Provenzano said he expects the El Paso store to be his highest-volume unit, though he declined to pinpoint specific sales projections.

“We open stores to do high volumes,” he declared.

He said he became interested in operating in El Paso because it “looked like a market that was underserving the Hispanic segment, and we viewed it as a growing market for us. We also felt we could come in and take care of people.”

Local competitors include Wal-Mart Supercenters, Wal-Mart Neighborhood Markets and Sam's Clubs, along with Costco, Albertsons and the independent Lowes chain, “all of which cater to Hispanics in their own way, but not the way we do it,” Provenzano said.

As at all the Pro's locations, the El Paso store is designed to give shoppers the feeling they are in an outdoor marketplace in Mexico, with perimeter departments representing different shops in a typical small Mexican village where people can stroll from one to the next, surrounded by the sounds of traditional Latin music.

The store's fresh departments include the following:

The store also utilizes more floor space “to accommodate full-pallet grocery merchandising,” Provenzano said.

The El Paso Pro's Ranch has 16 checkstands at the front of the store and 16 more registers in the service departments.

Provenzano said he expects to expand Pro's Ranch to New Mexico during the first quarter with a store in Albuquerque that will be located in an 80,000-square-foot former Wal-Mart.

He also said he intends to open four more stores in the Phoenix area next year, including his first ground-up unit, scheduled to open in Mesa, Ariz., in the fall of 2008.

He also hopes to move back into Los Angeles “as soon as we can find locations to acquire or build there,” he added. “And at some point we may want to move into Las Vegas.”

Pro's buys primarily from Unified Grocers, Los Angeles. However, with its own distribution centers in its home base of Ontario, Calif., and at an old Fleming facility in Phoenix — and its own fleet of trucks — the company warehouses the top-selling Hispanic items and other high-velocity items, and it also cross-docks produce.

Provenzano said he's considering adding a distribution center in Albuquerque.

Pro's Ranch is a family business, with Provenzano's four adult sons all playing key roles: Michael Provenzano is executive vice president and chief financial officer “and my visionary,” the father said; Steve Provenzano is vice president, perishables and logistics; Rick Provenzano is vice president, operations and human resources; and Jeff Provenzano is vice president, technology and advertising.