FARM STORES LOOK TO NATIONAL EXPANSION

ELLIOT ZWIEBACH

MIAMI -- Farm Stores Grocery here, which will be operating more than 100 drive-through Express Stores in Florida by the end of the summer, plans to expand the concept nationally over the next few years, according to the company's president and chief executive officer.

Since converting 43 stores to the express format over the last six months, sales are up 20%, with many of those locations achieving weekly sales of $1 million out of a 750-square-foot space, Carlos Bared told SN last week.

The company expects to complete conversions of its 51 other stores -- in Broward County, Palm Beach and Tampa, Fla. -- by the end of the summer, "and we're looking very seriously at Atlanta, Dallas and Denver and at other markets in between [to expand to] because the concept works," Bared declared.

Farm Stores, which has been in the dairy business since 1937, has been operating walk-in and drive-through convenience stores in Florida since 1957. In 1999 it disposed of approximately 100 walk-in locations and began developing plans to convert the remaining drive-through stores to an express format -- a destination for fill-in purchases for take-home consumption rather than a convenience store for immediate consumption, Bared explained.

"Our sales model is designed to compete with the express lane of a supermarket, not with a convenience store," he said.

Under the Farm Stores Express concept, customers drive up to the facility, view an assortment of approximately 1,500 stockkeeping units displayed on shelves behind the store's glass windows, then place their orders with store associates, who pull the items and load them into customers' cars. Customers can drive through on either side of the store.

Bared said it takes less than 60 seconds on average to fill an order, which generally includes two to four items, "and most customers come in two or three times a week."

The 750-square-foot buildings stock enough merchandise for one- or two-days' worth of sales, Bared said. Most stores are open from 6 a.m. to 11 p.m. daily, although some locations operate 24 hours a day, he added.

Farm Stores Grocery used to carry 2,000 to 3,000 stockkeeping units, he noted, but the company has scaled back to 1,500 for the express concept. "We offer the leading categories found in traditional supermarkets, but within each category, we offer the dominant brand or, in some cases, the top two dominant brands," Bared said, "and within those brands, we carry the dominant size, and we price it the same as or competitively with the supermarket price."

While the company reduced the overall number of SKUs, it added several new categories, including fresh produce (both bagged and bulk), fresh baked goods and pet food.

Farm Stores issues a circular every two weeks featuring sale items, as well as a complete list of its offerings, Bared said. Circulars are mailed to households within a mile of each store, and they are also handed out to customers as they arrive, he added.

Manny Portuondo, vice president, marketing and business development, told SN the format is geared especially well for people who spend a lot of time in their cars.