D&W JOINS FRESH FOOD FIGHT WITH CAFE STRATEGY

GRAND RAPIDS, Mich. -- D&W Food Centers here is putting in-store cafes front and center in a corporate strategy bent on to selling more fresh food.

This expansion fits into the company mission, because we believe our customers are interested in purchasing food more than they are interested in purchasing groceries," said Mike Eardley, senior director, fresh foods, in an interview with SN. "As the supermarket evolves, we will learn new ways to serve food."

D&W's plan is to use in-store cafes as learning centers, as well as a practical vehicle for boosting consumer food dollars spent within the store, Eardley added.

"Supermarket operators have to still compete to sell food to customers," he said. "We are not going to achieve success by relying solely on the grocery aisles.

"As time goes on, we will continue to explore a variety of options to sell more food," said Eardley. "As our chief operating officer says, up until this time we have been America's pantry; now we are working toward becoming America's kitchen."

It is this corporate attitude that has enabled D&W's cafes to thrive to the point where doubling the number of operations was able to be considered. Eardley said that with top management behind him, he's committed to better merchandising and presentation of food on a continuing basis.

"Adding hugely to our success is the attention to detail, attention to freshness and our attention to quality ingredients," Eardley said. "Success depends on how hard you work on it."

In designing and running the cafes, D&W has had to learn to think like a traditional restaurant food-service operation.

But Eardley said D&W still steers clear of actually being a restaurant. For one thing, the company is better off finding and securing a position as a special niche food-service merchandiser, rather than joining in on the noisy local restaurant competition. What's more, Eardley said it is important for D&W to remember and adhere to what its mission is.

"We are still a supermarket," Eardley said. "That is where our roots are, and that is what we are."

For example, the cafes have large, open windows, "not at all the ambiance of a restaurant," Eardley noted. In a display of caution, the operator only recently expanded the cafe hours to include dinner.

Still, D&W is at least competitive with local food-service operators in its variety and selection of menu options, if not in its presentation and ambience.

"We offer more menu selections than most restaurants in town," Eardley said.

D&W's food-service operation is a true cafe environment. Basically, the cafes are self-service cafeteria-style eateries. Seating in the in-store units range from 60 to 85, with an additional seating area situated outdoors during warmer months.

The format uses stations to give a specialty segment appeal to the cafes. These stations include:

· Pizza. The department offers hot pizza by the slice and full pies in 9-inch and 16-inch sizes.

Dough balls are hand tossed in-store to form the crust. The pizzas are sauced and layered and put through a tunnel oven to cook. Customers can either eat their selection in-store or take it home. Varieties range in flavors from the basic -- three-cheese, pepperoni, and pepperoni with sausage -- to a signature honey barbecue item. The list also includes vegetarian offerings and other signature pizzas, such as bacon cheeseburger.

· Sandwiches. Old-time favorites and classic combinations of meats and cheeses are made to order.

· Grill. Customers as this station can order traditional and deluxe burgers, bratwurst and hot dogs.

· Chicken. Both roasted and fried chicken are merchandised.

· Oriental. The department concentrates on "Flavors of the Pacific Rim," ranging from classic stir frys, and traditional favorites including sweet and sour sauces, to new discoveries such as Kung Pou chicken.

· Panini. D&W put together an American version of the classic Italian grilled sandwich.

· Ice cream and yogurt, offered in both hard- and soft-serve.

At some sites, D&W also offers a salad bar and Caesar salad station, Eardley said.

In total, the cafe offers food in a variety of forms: cold to-go, hot to-go, eat-in and eat-out.

The take-out business has grown immensely in stores with cafes, because it helps customers make easy meal selections, Eardley said. And take-out sales are fine with him. "Whether customers sit in seats each night is immaterial. It is the sale that counts."

Labor being an ever present concern in the operation of a station-oriented food-service format, Eardley said. D&W tries to staff each concept continually with at least one employee who is familiar with the specific food and combinations, and knowledgeable about ingredients and preparation. At the same time, it still rotates workers to broaden their experience.

"While we try to have specialists as much as possible at each of the various stations, we maintain a staffing flexibility that allows staff to float between stations," he explained.

The cafes uses a combination of disposable and in-house tableware, cups and plates. The retailer is midway through a conversion to total disposable. Most recently, a plastic plate was introduced. "It is plastic, but it still has a nice effect," Eardley said.

As it continues to expand its food-service outreach, chain is also evaluating the contribution the existing cafes are making to store sales, Eardley said.

D&W decided not to rely on department distribution figures to grade the cafes, because a department's contribution to total store sales was not considered a good enough measure for store-by-store comparisons.

"When evaluating the bottom line success of the cafe concept within D&W's food-service operations, distribution is not considered a good barometer," Eardley said. "Distribution cannot be used as a barometer, since none of our stores are alike."

Instead, the operator has opted to take a look at dollar sales per cafe customer, as a means of measuring the overall cafe department's contribution to total sales in a given unit.

Eardley said this method of evaluation is more in line with food-service operations, and also more in keeping with D&W's ultimate goal of developing an accurate measurement of each cafe is being received by the customer base of the each particular unit.

"By using a sale per customer measurement, we can get a fairly accurate idea if the department is responding to the customer base that is inherent to that store," he said. "If the dollar sale is there, then the department is successful."