INDEPENDENTS SURVIVE AMONG SUPERCENTERS

Lucia Moses

LAS VEGAS -- When Wal-Mart Stores, Bentonville, Ark., began blanketing the Joplin, Mo., market with supercenters several years ago, two-store CNW Foods managed to do what several Albertsons, IGA and a family-owned store couldn't: It survived.

One of its stores occupies a busy location, which made a big difference, said CNW President Dick Casey, who shared his success story at the National Grocers Association's Supermarket Synergy Showcase 2005 convention here this month.

CNW also enjoyed a price-impact image with shoppers. It keeps costs down by eschewing newspaper ads, and being non-union allows it to keep labor costs to a low 5.5% of sales and achieve a 16% gross profit.

Today, with 10 supercenters and one Sam's Club, Casey's rural trade area has the highest number of Wal-Mart stores per person, he said.

CNW's experience shows how independents can indeed thrive in Wal-Mart's shadow, said consultant Paul Adams of Paul Adams & Associates, Olathe, Kan., who led the session, "Who Put Wal-Mart in Charge? Take Back the Market," along with Casey.

Preserving your price integrity and hiring good associates to execute your strategy are keys to holding your own, he said.

He urged retailers to stick to their strengths, as he said Clemens Family Markets in suburban Philadelphia did in building a strong reputation for its delis.

In Oklahoma City, meanwhile, Crest Foods has maintained a strong price image vs. Wal-Mart while making a strong first impression with cheerful employees and clean stores, he said.

"They tell you their plan," Adams said, referring to in-store posters proclaiming the chain's rock-bottom price statement. "It's on the wall."

Despite its built-in advantages, surviving wasn't struggle-free. Sales volume dropped 18% after the first Wal-Mart supercenter opened in Joplin. In addition to having a strong price image before a supercenter comes in, Casey stressed the importance of having plentiful operating capital, as he did.