HARRIS TEETER IS AMASSING FOOD-SERVICE STAFF, TACTICS

STEPHEN DOWDELL

CHARLOTTE, N.C. -- Being a good, even a very good, supermarket prepared foods purveyor is not good enough anymore for Harris Teeter, according to senior executives at the company, based here.

The chain -- known for high-quality products and for setting trends in supermarket prepared foods -- is making a major new commitment to fresh meals marketing by adopting sophisticated operational tools and recruiting high-level management talent from the traditional food-service industry.

Harris Teeter's aim is to get more serious as a food-service operator and gird its loins for the intensifying contest against restaurant and home meal replacement operators for the consumers' takeout food dollar.

The retailer has hired as its new director of deli, bakery and food service a dyed-in-the-wool restaurant manager with extensive experience at multi-unit chains.

That is the first step in a plan to improve its in-store meals programs, from procurement to marketing and merchandising, along the lines of full-fledged food-service operators, said Joe George, Harris Teeter senior vice president.

"We are shifting from being a supermarketing company that is dabbling in prepared foods with a supermarket mentality, to bringing in professional food-service experienced people into the organization. That is the concept," George told SN.

"It underlines the fact that we are committed to giving our customers what they want, and with everybody being time-impoverished, customers are wanting more and more meals," George said. "We are changing our approach, becoming much more food-service oriented."

Harris Teeter is generally considered a sharp fresh foods operator among supermarkets, but its executives are apparently more worried about competitors from without than from within the industry, when it comes to fresh prepared foods.

"Maybe we are OK as far as supermarketing goes, but we don't think that is good enough," George explained, adding that the spur to Harris Teeter flanks is in large part "the newly entering pieces of the food-service industry, called home meal replacement purveyors.

"We certainly see those people as being our competition. And in order to compete wonderfully well with them, we have got to be better than 'being good' as far as supermarkets are concerned," he said.

"Our customers have these other options, that are better than what we are currently presenting them, through traditional food-service operators that are evolving and getting better. Therefore, in order to stay on the edge, we have got to evolve and get better and better. And to do that, we have to start thinking more like food-service people."

Indeed, the linchpin in the chain's plan is to import experienced food-service management skills, building on a base of primarily supermarket-trained deli and food-service personnel. Its first move was the recruitment of Will Dunlavy, who is equipped with "25 years of experience in bakery, prepared foods and banquet managements," including high-level stints with large multi-unit operators Golden Corral Family SteakHouse and Mrs. Fields.

"In the market, you can always see operators like Boston Market addressing the home meal replacement piece. When we looked at ourselves and then at the other industries, we realized that we are prisoners of our own assumptions," George explained. "We have not had the benefit of years of experience operating a chain of restaurants. We decided that the best way to get us into that business more quickly and more professionally would be to bring in the talent that possesses those skills."

The skills Harris Teeter is looking for fall into two areas, operations and marketing.

To sharpen its operations, the chain aims to develop more sophisticated food-service controls, food-costing systems and preparation planning tools at the store level.

The marketing improvements are likely to include better menu planning, primarily the cultivation of a core menu; and more explicit packaging, merchandising and pricing of more complete meals, rather using fresh components as building blocks for consumers to put together themselves.

"In terms of running our business, this means certainly looking at portion control more from a food-service basis, standardization of menus, using core menus and more," George said.

"As we started getting into our chef's programs, for example, we did not have food-service control mechanisms in place, food-service portion control, tracking mechanisms, all the tools one would expect to find in a chain of 50 food-service operations. That is just one area we know of where we need to be more food-service oriented."

Dunlavy, the new deli and food-service director, told SN that the need for a core menu, a fundamental component of multi-unit food-service operations, was something he spotted shortly after joining Harris Teeter less than two months ago.

"We are looking to develop a consistency of offerings for our customers, core menus that reach across all our stores, and will even allow us to expand that beyond the current 50 stores that we have a chef's program in," he said.

"Those types of tools are a given in any of the competent multi-unit food-service operators out there. When you go in from one McDonald's to another McDonald's, you absolutely will know what you are going to get. And that is what they have hung their hats on."

The idea is that Harris Teeter will find a core of signature meal items around which to build a program. However, it does not necessarily portend a radical departure from the chain's current offerings, but rather a refinement.

"Our plan is to take that idea, and that premise of a core menu, and apply it to the chef's entree concept, for products that are really world class, and world class consistently across all of our stores," Dunlavy said.

The chain will have to staff up accordingly. George said the plans is to promote and retrain from within, and supplement with experienced food-service managers and skilled food preparers.

"We think we already have some first class, excellent folks. We are committed to growth in this area, so I think we would be looking to build on our team of associates.

"First and foremost, we want to promote our people from within. Secondarily, we already have a three- to four-year history of hiring people from culinary schools; that will continue. The key here is that we are looking also for people with a different level of experience in the food-service industry," George said.

"We are, in fact, stepping up our current recruitment from culinary schools, because our need for that talent will continue to grow," added Dunlavy. "But the structural change will come primarily in the field, where we will be looking at multi-unit experience from the restaurant industry, to help us better manage our standards at the field level.

"We are going to be looking at top line restaurant or food-service organizations, and some of the multi-unit people from there that we could bring in. That is where the expansion in our structure is going to come from," Dunlavy said.

Traditional food-service concepts will also work their way into Harris Teeter's philosophy for procuring products and linking with suppliers.

George said the company will continue to rely on fresh foods prepared by its in-store chefs, but with some significant improvements in standardization.

"It is going to be done with more consistency, more of an emphasis on portion control, more tracking and so on," he explained.

In addition, that in-house aspect of the program will be complemented to a greater extent by high-quality products made outside using Harris-Teeter chefs' recipes.

"At a very limited basis [the chain has] done some items outside from recipes developed here by the chefs, but not to any great extent," commented Dunlavy. "We will now also be looking to partner with a lot of the traditional food-service vendors that are currently out there -- for example, for some of the raw ingredients, as opposed to working with the grocery side of these companies."

It will likely be some time before what George called the "paradigm shift" in Harris Teeter's food-service philosophy becomes noticeable in its prepared-food cases. Changes are not likely to be noticeable to consumers for another six months or even a year, the executives said.

However, when change does come it is likely to take the form of much more deliberate meals marketing.

"You will see a growing emphasis on excellent self-service meals, both prepared by our chefs and by outside vendors. You will see more of an emphasis on selling meal concepts, rather than the components of meals," George said.

"When you go into a food-service location, you purchase a meal, right? It is readily identifiable," he said. "We are selling rotisserie chickens now. But we are not selling rotisserie chicken in a meal form. If we sell the chickens at $4.99 each, we are really not selling a meal at a meal price.

"Now, to be more in the meal business, we will be likely to start to sell rotisserie chicken for four for $12.99. That is the kind of shift we are talking about," George explained.

"And we will focus on bundling that chicken with side dishes, cold and hot, and breads, and selling it at a meal price point," said Dunlavy, picking up the thread. "Even in the chef case you will see a shift. You go to that case now and see a lot of different items, wonderful, terrific food, but you don't see any meal price points, or any meal combinations readily."

That, they said, probably embodies the biggest shift that Harris Teeter must make as a prepared food merchandiser. Make no mistake, George emphasized, "this is as opposed to a supermarket operation that happens to be selling a few meal deals. Somewhere down the road, you have got to be able to walk into our stores and see meals displayed; to see signage that says, 'This meal at this price, and that meal at that price'. Right now, that kind of marketing message is lacking in our stores."

As he sees it, simplifying the operation with a core menu is the key. "If you go into McDonalds, there is a menu board up there with marketing messages that are pretty simple. There are six or seven meal choices with price. Right now, when you look at our chef's case, it is not very simple. You have got 40 or 50 choices, at different prices, and you have to sort out what your meal will be and what it will cost you."