A NEW MARKET FOR BYERLY'S

NANCY BRUMBACK

HIGHLAND PARK, Ill. (FNS) -- After eight years of searching for sites, Byerly's has made its move into Chicago.

It opened its first store late last month in Highland Park, an upscale community north of the city on the lakefront, with a second store set to open in late May in Schaumburg.

The 70,000-square-foot Highland Park store includes a number of changes for the Edina, Minn., chain. There is no restaurant, but prepared foods for takeout are heavily emphasized. Ready-to-cook meat and seafood entrees are featured in a new Chef's Market section. Produce offers more organic items, and the chain can sell liquor in its stores for the first time. (For a detailed look at the store's fresh food offerings, including photographs, see Page 73.)

Byerly's expects to open between seven and 10 stores in the Chicago area within three to five years, Dale Riley, president and chief operating officer, said in an interview before the store opening. Locations for the next two stores are being explored, with an eye to opening in the summer of 1997, he said.

"We are not limiting ourselves to the northwest suburbs," Riley added. "We also see opportunities for smaller stores in city neighborhoods," such as Chicago's Lincoln Park section.

Byerly's, which has 10 stores in the Minneapolis area, is also continuing to expand on its home turf, where a store similar to the new Chicago unit is slated to open in October, which would bring the chain's total store count to 13 by the end of the year.

"The rest of our stores have sales of between $25 million and $40 million a year. We expect this one to be in the middle to upper end of that range," said Jack Morrison, chairman. Byerly's annual sales are about $250 million. Company executives do not expect to challenge homegrown, if no longer home-owned, powerhouses Jewel Food Stores and Dominick's Finer Foods with their seven to 10 locations. "We're going to stay below the radar screen of Jewel and Dominick's. They have a store every three miles," Riley said.

"We have a lot of respect for Jewel and Dominick's. They have a tremendously loyal following," he added. "There's also a strong local operator, Sunset Foods, with a very loyal customer base."

But Byerly's does plan to carve out its own competitive niche, and the expected $25 million to $40 million volume will come from someone. "We will be right there with Jewel and Dominick's on basic grocery pricing, and our endcap displays will be very competitively priced. In perishables, it's more a value question," with Byerly's carrying such items as USDA Prime beef and the ready-to-eat and ready-to-cook lines, Riley said.

He indicated that the prepared-food offerings in the two Chicago markets initially will help define Byerly's niche. Besides Byerly's own extensive deli offerings, the stores include a Wolfgang Puck's Express-to-Go section with a wood-burning pizza oven and an Asia Grille Express from restaurant operator Leeann Chin Inc.

The store stocks 40,000 stockkeeping units -- "20% higher than anyone else," Riley said -- and offers "three or four times more fresh seafood, and three times the assortment of wine, beer and liquor of any supermarket in the Chicago area," he noted.

To help Chicago-area shoppers feel at home, Byerly's has developed partnerships with several well-known local companies.

Charlie Trotter, whose Chicago restaurant has a national reputation, will be chef-in-residence, teaching a cooking class at each store location and working with the chain's Chicago culinary director (Gloria Reyes, a Quaker Oats veteran) to develop recipe ideas. Family-owned Oberweis Dairy operates an ice cream shop in the store, and its products are included in the dairy section. The Marshall Field's department store is providing table-setting displays, cookware and small appliances for the store's cooking classroom. Also, First National Bank of Chicago is operating full-service branches in the two stores.

Although Byerly's designed this store without a restaurant, it does include a cafe-style seating area -- complete with a working fireplace -- where customers can eat the prepared foods they have purchased.

The new Minneapolis-area store will also have the seating section.

The Highland Park store also has several features that Byerly's has been famous for:

Aisles are carpeted to reduce noise, though the store also has a lot of hardwood-looking tile flooring. The aisles are wide, 7 feet, and have no hanging signs or point-of-purchase material. No displays are more than 6 feet high.

Grocery gondolas run parallel to the checkout area, broken by a center frozen food section featuring a softly lit domed ceiling.

At the right front corner of the store is a cooking school classroom for a range of activities, such as chef lectures, children's birthday parties and cooking classes.

All buying is done at the store level by department managers under the direction of General Manager Jeff Maurer.

The 13-register checkout area has no candy or gum -- another focus group request. Clerks unload shopping carts, and groceries are taken to a pickup area, where shoppers drive up and clerks load the purchases into the car.

The frozens area features an arched, softly lit domed ceiling in a warm yellow, and cases blow warm air out at floor level to keep the area comfortable. Multideck cases form the department's side walls, with a double row of reach-in cases down the center.

Aside from the full-service bank branch, other services available include a full-service U.S. Postal Service branch, along with a wall rack of newspapers from around the world.

Shopping carts are unloaded by the cashiers at the checkout, and bagged orders are put into plastic bins and sent to an outside area by conveyor. Shoppers then drive up to the covered pickup area where clerks load the groceries into the car.

Byerly's introduced its Highland Park store with a preopening party to benefit the Regenstein Fruit and Vegetable Garden at the nearby Chicago Botanic Garden. The party drew about 1,800 people, and the store's soft opening was mobbed, with cars circling the parking lot looking for spaces.

Chain founder Don Byerly, on leave from his retirement home in California to attend the benefit, noted that the expansion into Chicago "is a big step for a company like ours, but I'm excited about all the things we've done here."

About a month before the opening, Byerly's began an advertising campaign for the Chicago store that included ads in local newspapers and magazines, billboards and 30-second cable TV spots.

The store is supplied by Supervalu's Kenosha, Wis., division, and as with all Byerly's stores, all buying is handled at the store level by the department heads.