BYERLY'S RETOOLS

David Merrefield

To almost anyone in food retailing, the Byerly's name has been synonymous for a generation or so with leading-edge retail strategies centered on upscale product offerings.

Those offerings sweep across an unusually broad range: gourmet grocery, well-presented seafood, high quality baked goods and so on throughout the store. But that's not all. Byerly's mix has always included unusual in-store departments and services such as restaurants, gift shops, cooking schools and more, all punctuated by decorative flourishes from wall-to-wall carpets underfoot to crystal chandeliers overhead.

Byerly's, of course, is the retail organization founded by Don Byerly nearly 30 years ago. During that time, Byerly's has set high hurdles when it comes to quality product, presentation and format evolution, but it has hardly been a trailblazer when it comes to expansion. Indeed, the retailer has followed a conservative growth path which has brought it to the present moment with just 10 stores in operation, all in its home state of Minnesota. Byerly's did tinker with running distant stores once, though. About 15 years ago, Byerly's opened a couple of stores south of Atlanta, an experiment that didn't work out, perhaps because of the distance between Georgia and Minnesota and the relatively downmarket demographics of the store sites. That experience may have compounded Byerly's reluctance to search for success outside its backyard -- until recently, that is. As this week's Page 1 news feature shows, market forces are inspiring Byerly's to take a new look at its slow-growth outlook, and at some of its traditional product offerings.

As for the issue of store expansion, Byerly's added just one store during the past seven years. During that period, competitors in Byerly's core market added nearly 20 stores, causing Byerly's market share to droop. As for product, competitive challenges have surfaced there, too. Many of its competitors have developed quick-food programs that are better attuned to time-impoverished shoppers than is Byerly's more languid shopping experience.

So what solutions are in the making for Byerly's? To face the issue of competitors' development of successful food-service offerings, Byerly's plans to test the idea of enhancing convenience by putting deli and bakery departments together, instead of separating them, and by minimizing in-store restaurant presentations in upcoming units. Byerly's is also working on expanding prepared salad and other quick-grab items.

"Our goal now is to continue to evolve our food concepts, particularly in the area of food service, and to keep our ears open to what's hot and trendy," Jack Morrison, Byerly's chairman, told SN. Also, Byerly's plans to enter the Chicago market next year with two stores. That is to be followed by perhaps three more next year and another five or so during the next three years. Those projects alone would nearly double Byerly's store count in the next few years. But in addition, another store is planned for its core Minneapolis market, and there's talk of establishing in yet a third midwestern market in upcoming years.

As Byerly's expansion strategies unfold, there might be a lot to learned by looking at how Byerly's answers questions such as these:

How will it advertise in new markets? Unlike the situation in its home market, Byerly's plans to build an image in new markets through multi-media campaigns.

How will workers be trained in new markets to replicate the high service levels achieved by Byerly's at home? After all, Byerly's virtually invented the philosophy of "delighting customers."

And, how can it be reasonably priced competition in its new markets with a format that's undoubtedly destined to be more labor intensive than that of many of its competitors? It may be that Byerly's will emphasize non-price competitive advantages to an unusual degree.

In short, Byerly's has a full plate of change ahead. But it's good to see Byerly's back in the game and maybe poised to teach a little something to those of us looking on -- just as it has done so often in the past.