CORE CURRICULUM

KAREN DeMASTERS

Even as more supermarkets become part of nationwide chains, some independents, such as Coborn's supermarkets in St. Cloud, Minn., are finding ways to attract and keep customers. In Coborn's case, beefing up the offerings and advertising for the Center Store aisles is one method.

Although Coborn's has reached an unprecedented level of success as a regional chain by expanding its supermarkets to include gasoline stations, florists, pharmacies, video rentals and other offerings on the periphery of the store, executives told SN it is the Center Store aisles that keep people coming back.

"The grocery industry has found it difficult to try to stave off the competition of the mass merchandiser and the effects they have caused," said Bob Thueringer, executive vice president and chief of operations for the chain, which has 17 supermarkets in Minnesota and South Dakota ranging in size from 22,000 square feet to 65,000 square feet. "We started a new marketing strategy in the last half of 2001 and will continue through 2002 with our primary goal to focus on the Center Store aisles.

"There is no magic bullet or solution to compete with the mass merchandiser, but we have developed a complete sign package to reinforce with the customer the fact that we can be competitive in the Center Store aisles with the mass merchandiser."

The stores, which started with a single produce stand in Sauk Rapids, Minn., feature truckload sales of Center Store items, with many of the sales or specials lasting for several weeks or months at all 17 supermarkets.

Because the family-owned business has enough supermarkets in its regional chain to buy products in truckloads, prices can be set at nearly the same levels as those in the huge warehouse stores.

Debuted late last year, Coborn's features distinct yellow, black and red signage throughout the store to draw attention to the truckload price values, said Sue Wendt, vice president of advertising and a company officer.

"We buy by the truckload and pass the savings along to the customer," Wendt said, "and we want the customer to be aware of that fact. We want people to know they can come to us and buy laundry detergent, toilet paper or soup at a price that is competitive to the superstores."

To do this, Coborn's developed large, colorful, distinctive signs for the front and back of the store, endcaps with the same color scheme, and shelf-talkers and poppers, as well as signs on shelves and arm signs hanging in the Center Store aisles. The same truckload theme complete with the yellow, red and black color scheme is carried through in the newspaper advertisements, in-store circulars and direct-mail advertising, Wendt said.

"Our shelf-talkers say 'truckload buy.' Signs at the price-tag level, blade signs, typical shelf signs and endcaps are the same, so the theme is complete," Thueringer added.

"This is all part of our marketing strategy for 2002," said Chris Coborn, company president and great-grandson of the founder, Chester Coborn Sr.

"The Center Store is the core of our supermarkets. It does the greatest amount of business as a single department," Chris Coborn said.

"We have always been convinced that our Center Store products were competitively priced, but we were not convinced that we communicated that well to our customers," he added. "That is what we are changing."

The stores also have a cross-merchandising program that ties merchandise, such as cookware, with Center Store items. In mid-January, the stores were featuring a special that gave away the makings of a stir-fry dinner with the purchase of every wok. Before that, each customer who bought a crock pot received the ingredients for making chili for free, Wendt said.

Chili and other similar cold weather foods illustrate the chain's attempts to appeal to its particular customer base in the upper Midwest, where the temperature drops early and stays that way for months.

Coborn's also has become famous for being first among supermarkets to integrate new ideas and new technology.

"Coborn's is known for being on the cutting edge of technology," said Nancy Christensen, executive director of the Minnesota Grocers Association.

"They keep well aware of what is happening across the nation in the industry and they are not afraid to innovate."

For instance, the store's Internet site is user-friendly, showing the different weekly specials at each location and allowing customers to print coupons or order flowers online. The site lists each store and what amenities it offers and has a kids' page for activities, crafts and recipes.

The multi-million dollar enterprise started with one small produce store in 1912. The founder added dry goods and other merchandise over the years and then added a meat market in 1936.

By the 1940s the original Coborn's had incorporated shopping carts and checkout lanes, which were new concepts at the time, and in 1952 the store adopted the "cash and carry" operation that is prevalent in today's supermarkets.

In 1970, when descendants of Chester Sr. were running the store, a liquor store was added. Then in 1972, technology hit the grocery industry and Coborn's was the first grocery retailer in Minnesota to adopt scanning at the checkouts.

The family also has not been afraid to enter new fields outside the standard supermarket. The corporation opened its first warehouse or discount store under the name Cash Wise Foods in Willmar, Minn., in 1979, and now operates nine Cash Wise Food stores, ranging in size from 50,000-square-feet to 105,000-square-feet, in Minnesota and North Dakota.

Going the other way in size, the family saw another niche that needed to be filled and opened its first convenience store in 1986. They now operate 21 convenience stores in Minnesota, South Dakota and North Dakota that go by the name Little Dukes, named for the one of the founder's sons, Duke Coborn.

The corporation now includes 14 Coborn's and Cash Wise liquor stores, 21 pharmacies mostly within the food stores and five stand-alone video stores, as well as in-store video rentals in most Coborn's and Cash Wise stores.

Also part of the Coborn's company are two Save-A-Lot food stores in Freeport, Ill., and Dubuque, Iowa, which handle mostly private-label products with a limited number of stockkeeping units and greatly reduced prices.

"Coborn's has become known for being extraordinarily focused on customers and for its exemplary communication with employees," said Christensen.

Thueringer said both are goals of the corporation. The corporate officers meet at least once every six months with all employees and communicate through letters and videotape even more often. When the truckload sales theme was adopted, it was presented to employees first.

"If your own people believe that you sell at competitive prices, then it is contagious and that message passes on to customers," Thueringer said.

And if employees are happy, that is also communicated to customers, Chris Coborn said.

The company's community spirit carries over into a wide range of charity activities. The company received the Most Generous Companies in America award in 1998, which was sponsored by actor Paul Newman and the late John F. Kennedy Jr. Last month, the company announced a $1.5 million donation to CentraCare Health Foundation to develop a Coborn Cancer Center.

But much of the company's charity work is done quietly through the donation of food or space in the stores for charity events.

"You would be hard-pressed to find anyone who tops the Coborns when it comes to helping the community," said Steve Joul, executive director of Central Minnesota Community Foundation. "After Sept. 11 they developed their own patriotic T-shirt and sold it in the stores and donated the money to the victims' funds. They were involved. They didn't just write a check."

The success all comes back to being a family-owned business that is willing to diversify and adopt technology but also maintains its core business, Chris Coborn said.

Thueringer explained the philosophy.

"This remains a family-owned business and the owners are willing to reinvest in existing operations, upgrading and remodeling the stores, at the same time that they are committed to change," he said. "We have added natural food stores that are fully staffed. We have kitchen cookware centers, sit-down eating areas in the deli, and bath and body shops.

"But at the same time we do not want to lose sight of the fact that customers need to stock their cupboards and the Center Store is the core of our business," he said. "What we have over the mass merchandiser is that we are closer to the customer and we are closer to the execution of any program we undertake. It is all part of our 'Be the Best' theme."