FRESH ATTITUDE

MINA WILLIAMS (FNS)

Midway through a three-store renovation, Penhollow Thriftway is already enjoying its decision to make fresh produce a signature department. The independent operator's redesign shifts produce to first in the shopping pattern and roughly doubles the floor space allocated to the department.

The result is a "produce punch" when customers enter the store, according to Jim Penhollow, owner of the three stores located around Seattle. The update of the Ballinger unit was completed late last summer, the Renton unit was finished in late September, and the operator's third unit is slated for redesign this coming May, said Penhollow.

"Small independent stores can take control of their own destiny and maintain independence," he said. "You have to have a focal point of what food really is. If we don't do something to differentiate ourselves, we won't make it. Produce is the most important thing a customer can take into their house and feed their family. We want to get into that niche and put out the best effort that we can."

The operator initially conducted a survey of the marketing areas the units are located in to determine what the customers wanted. While the Renton unit is located amid commercial buildings and a small Seattle suburb, the Ballinger unit posed a challenge. This unit is located in a suburb that straddles two counties, where neighborhoods are both blue collar and contain million-dollar, waterfront homes.

"Many of our neighbors did not know the store was even there," said Penhollow. "Or they equated it to another unit that had been there previously."

What's more, the Thriftway group did not get high marks for its produce offerings, and Penhollow suspected the smaller size of the departments may have made the difference as consumers compared them to competing retailers.

"You always have to fight when you are small, because you're perceived as expensive," he told SN. "Opening up the produce department made the stores look larger and the produce offerings bountiful."

The 25,000-square-foot Ballinger unit's produce department was moved to the front of the store and doubled in size to 3,200 square feet of floor space.

Similarly, the 40,000-square-foot Renton unit also enlarged its produce department from 4,000 square feet to 8,000 square feet. This size has enabled Penhollow to add new items and expand entire categories. Larger displays lend themselves to a brimming, bulk effect. Signage has been carefully redesigned to offer customers not only item and price information, but details as to growing method, origin and preparation or serving suggestions.

"Selection, quality and variety are the points we want to get across to customers entering the stores," said Penhollow. "We want to offer good-sized displays for selection. For variety we want to offer not just ginger root but taro root and horseradish root, for example. There are so many produce items available that the average store doesn't get. Now with our expansion we can offer more."

In both remodels to date, old cases were removed and the operator shifted to new double-deck cases. New moveable dry tables were employed to increase flexibility. These tables can also accommodate larger displays than previously, plus they can be shifted within the department to keep the look fresh. The ability to build bigger displays has also given the operator the ability to leverage his buying ability.

"We find the best farms and bring their crops to market," said Penhollow. "There is much more produce available today. Last fall we had an apple festival and featured 52 varieties."

The redesign doubled the organic offerings and increased the number of specialty items, too. Organics are merchandised in an eight-foot, four-deck refrigerated case with a well. Pink tape, used to identify organic selections, also makes it easy for front-end checkers to spot, reducing ring errors. Previous to the remodel, 35 stockkeeping units of organics were offered. Now that presentation is expanded to more than 100 pieces.

When available, the Thriftway group carries both organic and conventionally grown items, double-facing them within the department. In select categories -- including spring mix, greens and bunch carrots -- Penhollow has shifted to offering organic only.

"Conventional customers do not care if these items are organic or not and actually see the growing method as an added value," he said.

Specialty items are displayed in terra-cotta trays that promote a natural effect. Mushrooms, baby vegetables and peppers were in particular abundance when SN toured both units. SKUs here have increased 50% under the new setup.

A Salad Garden greens bar -- priced at $6.99 per pound -- makes available salad mixes, stir-fry mix, fajita mix and broccoli florets, along with sliced radishes, cucumbers and mushrooms. Toppings such as green onion, marinated artichoke hearts, red onion and shredded cheddar cheese are merchandised in crocks. Additionally, eight different dressings, plus two vinegars and olive oil, are available, and customers can place their selection in take-home, clear plastic containers. The self-service case is refrigerated with misting capabilities.

Elsewhere, service seafood and service meat were also added to the floor plans. Now grill-ready and oven-ready selections are offered along with a full compliment of sausages. The deli was expanded to incorporate a self-service cold-food bar; expanded specialty cheeses; and an olive bar. A self-service, hot-food bar was added to the Renton unit to service workers in the surrounding area during lunchtime. Both food bar prices are $6.99 per pound at both stores.

To accommodate the expansion of produce and deli in the Ballinger store, Penhollow elected to eliminate bulk foods and reduce the grocery presentation by one aisle. Fitting the service meat and seafood cases into the store required Penhollow to remove an additional grocery space by 18 feet, though angled case runs have helped minimize the decrease in dry goods. The Renton remodel removed two grocery aisles to accommodate the fresh-food focus.

"We have not eliminated selection. We cut down on offering every size in every brand in every category," he said.

"Since the renovations we have had positive comments from customers," said Penhollow. "They like the quality offered and the number of items now available. We feel we did a good job, but the customers will ultimately tell us the truth."

To introduce Ballinger-area consumers to the redesign, Penhollow embarked on an extensive direct-mail campaign. Every week, for 12 weeks, fliers were mailed to homes within the areas to introduce shoppers and potential shoppers to the changes. The fresh-oriented brochures punctuated the deepened offerings. Produce, seafood and meat items were photographed and headlines such as "Get Fresh With Us," "Come To Your Senses" and "Berry, Berry Cook!" were emblazoned on the cover. Inside, a lead item was featured along with a coupon for products such as a free, single tall latte, specially priced premium ice cream, $3 off a whole rotisserie chicken and a free dozen eggs. More specially priced items completed the inside of the brochure. The outside of the flier contained a map to the unit and a brief description about the changes.

"Advertising and direct mail are always a gamble," said Penhollow. "But these fliers really helped us tell our neighbors and customers about the changes in produce, seafood and the deli. We have to be different. The Wednesday ads have been grocers' only avenue and there the only recognition you get is that you are cheaper."

In both locations the store remained open during the renovations. "In produce we put the displays on wheels and watered the wet rack items with watering cans," said Penhollow, who plans to refurbish his stores every three years in order to remain competitive.

"You can get caught up in operations as a way to run your business, but your food still has to look beautiful," he said.