HUGHES OPENS FIRST UNIT INFLUENCED BY QFC

ELLIOT ZWIEBACH

MALIBU, Calif. -- Hughes Family Markets unveiled its first store here last week that directly reflects the influence of Quality Food Centers, the Bellevue, Wash.-based company that acquired the Irwindale, Calif.-based Hughes chain last March.

The remodeled store, viewed by SN during a tour, offers a combination of Hughes' own innovations and QFC's proven merchandising formulas.

According to Mark Oerum, vice president of store operations for the 57-unit Hughes chain, "What QFC has enabled Hughes to do is jump ahead two years. A lot of ideas we had were in the planning stages, and QFC simply gave us the green light to implement them.

"And most of our merchandising people have been up to the Pacific Northwest and gotten a taste and a feel for what QFC is doing there.

"In the process we've been able to mesh their ideas and ours for the best of both worlds." Hughes will unveil its second post-QFC store Nov. 12 when it opens a replacement unit in Irvine, Calif. At 29,000 square feet, the Irvine store is slightly smaller than the remodeled store here and will not feature as many innovations, Oerum told SN.

The unit here is a 36,700-square-foot box with 26,656 square feet of selling space -- an increase of 1,856 square feet that was achieved during the remodeling by pushing back one rear wall 6 feet and a side wall 8 feet.

The store's innovations, Oerum said, include the following:

Opening up the area in front of the store's service deli-bakery counter to accommodate island displays that give customers the option of self-service.

Adding a variety of signature lines.

Expanding home-meal replacement items, including introducing QFC's Chef's to Go program and Grab n' Go hot and cold entrees and side dishes.

Increasing frozen-food space by 50% to accommodate expanded varieties.

Installing a wine cellar featuring premium wines and a wine steward.

Integrating a variety of health-food products into a nutrition center.

Moving produce and florals from the back to the front of the store. The store here, which is 11 years old, serves a very upscale clientele in the Malibu Colony and is one of Hughes' most successful stores in terms of volume and average purchases, Oerum said, though he did not disclose either number.

Perched just off the coast of the Pacific Ocean, the store is also the only chain store in Malibu and the only market for 10 miles.

It had not been remodeled since it was opened, Oerum added. He declined to say how much Hughes expects sales to increase following last Wednesday's grand reopening.

A customer entering the store from the left encounters the revamped deli-bakery area, which features 80 running feet of counter space, including Seattle's Best -- a coffee bar that's a standard feature in QFC stores -- and an open preparation area that allows customers to see employees preparing and packaging hot and cold entrees and decorating cakes.

"Before the store was remodeled, customers walked right into several rows of grocery gondolas -- it was like walking into a wall," Oerum said. "But now we've opened up that side of the store dramatically, replacing the gondola area with some tables and chairs and several 24-foot island displays that enable customers who don't want to wait on line in any of the service counter areas to buy the same products in a self-service mode.

"That has enabled us to offer a larger variety, including doubling the items in the bakery and allowing us to feature more signature brands."

According to Oerum, the store follows QFC's dictum on signature items: "We're looking for the best that's available in the area and then offering it for sale at one location, our store." Among the signature items here are several brands of bread from local bakeries (including Emerald Bay whole grain breads made in Laguna, Calif.; specialty breads from Schwartz Bakery and La Brea Bakery in Los Angeles; and a line of Italian specialties from Il Fornaio, an Italian restaurant and bakery chain). Other signature items in the store include a line of premium candies from Powell & Hyde, San Francisco, merchandised in the bakery case; salad dressings, olive oils, breads, frozen foods and packaged goods from Cucinia! Cucina!, a Seattle restaurant that recently opened its first southern California outlet; and prepackaged upscale entrees from Mallard's, Huxtable's and Burnet & Son.

Besides breads, individual island displays in the deli-bakery area feature decorated cakes and single-serving slices, a new item in the store; Grab n' Go items (QFC's home-meal solutions line of sandwiches, lunch meats, side dishes and barbecued chickens); a salad bar that incorporates a newly installed soup bar, plus gourmet cheeses -- all flanked by a 64-foot island display of mostly traditional supermarket deli items, running from front to back, that used to be positioned on an in-line gondola, Oerum noted.

The deli case includes a section for hot entrees, including the store's ready-to-eat feature of the day -- a full meal priced at $6.99 and available seven days a week after 3 p.m., with combinations such as meat loaf with mashed potatoes and vegetables; chicken cordon bleu with asparagus and rice; and prime rib with mashed potatoes and green beans. Customers can buy the features either hot or cold, Oreum noted.

Adjacent to the service deli is the store's meat department, with a three-tier meat case that runs 48 feet and features several unique branded lines -- Premier Choice beef and turkey, a Hughes-QFC exclusive, plus Coleman natural beef; Smithfield Lean Generation pork; Empire's fresh chicken line; the Rocky line of fresh range chickens; and beef from Argentina.

The meat department also features QFC's Chef's to Go line of entrees, packaged in the store daily by specially trained chefs, who also spend two hours a day (from 4 to 6 p.m.) demonstrating products in the department.

According to Oerum, Hughes' signature chef, Tom LoCicero, spent time at QFC learning the recipes and procedures in the Chef's to Go program that was developed there, then returning to southern California to hire and train Hughes personnel.

At the rear of the store is a 16-foot seafood counter featuring valued-added items, a new product category for Hughes, plus a small seafood soup counter that Hughes features at 15 stores, and a self-service sushi bar.

An adjacent 18-foot frozen-meat case contains expanded varieties "to accommodate customers who are looking for new items," Oerum said, including meat from alligators, buffalo, quail, ostrich, venison and pheasant.

Also on the rear wall is a wine cellar, a 450-foot alcove with 90 running feet (up from 48 running feet) that features premium wines priced from $200 to $1,200 and offers customers the services of a wine steward from 11 a.m. to 8 p.m. daily.

The store here also has expanded its refrigerated beer selection in a 12-foot case to accommodate premium beers and microbrews in addition to more traditional selections, Oerum said.

Frozen foods were expanded -- from two 75-foot gondola runs of 60 doors to three 75-foot runs of 90 doors, including wraparound endcaps -- to accommodate better quality and more variety, Oerum said. Added items include low-fat and fat-free varieties, pizzas, hors d'oeuvres and other party snacks, kosher items and ice cream.

Ice cream is merchandised on shelves tipped toward the customer that expose the top of the cartons, permitting a clearer view of what's available than most door cases, "which has helped sales dramatically because customers can see everything that's available more easily," Oerum said.

Hughes has reorganized various merchandise it has traditionally carried into a nutrition center -- a QFC concept -- that features six 24-foot gondola sides of natural medications, vitamins, drinks, cookies, snacks and condiments, including a 24-foot case for refrigerated and frozen natural foods.

Both the produce and the floral sections were moved from the back of the store to the front "to set the tone of freshness up front," Oerum said.

Produce picked up about 15% of additional space in the move by adding five-tier upright cases for some varieties, including organic produce and juices, and the floral section was expanded to accommodate more single-stem varieties and a full-time floral designer who helps put together custom bouquets.

The store also features a humidor in front of the checkstands for premium cigar lines, Oerum pointed out.

According to Oerum, the store reflects the tastes of its high-end clientele, who were consulted on the redesign early in the process. "We gave them three decor packages to assess -- one that was very plain, another with very ornate fixtures and one in-between, and they chose the middle one.

"So rather than the bright blues, reds, oranges and yellows the store decor used to feature, the remodeled unit has a lot of earth tones and natural colors with wood accents, which allows the food to speak for itself rather than calling attention to the decor.

"The store now has a warmer, more comfortable feeling."