JEWEL'S MARKETPLACE BUILT WITH FLEXIBLE CONCEPT AREAS

PAT NATSCHKE LENIUS

ORLAND PARK, Ill. -- In its largest and highest volume store here, Jewel Food Stores has constructed a new prepared-foods presentation, dubbed the MarketPlace, that is based on conceptual building blocks.

The blocks, or "concept areas" that form the core of the MarketPlace format, finished and unveiled in the first week of March, include:

A PapaNicholas coffee shop.

A European Bread Co. shop that provides customized slicing service.

A hot soup bar.

Service and self-service chilled prepared foods.

Service and self-service hot prepared foods.

And a leased pizza section called Home Run Inn, with both hot and cold products, plus a chilled self-service display of private-label pizza.

Indeed, the strategy behind the MarketPlace calls for a measure of flexibility afforded by such modular components, according to Nancy Chagares, vice president, bakery/deli/floral merchandising for Jewel, based in Melrose Park, Ill.

"Each of the concept areas in the MarketPlace can stand on its own. We have another PapaNicholas coffee shop in our Barrington store, for instance.

"Wherever we go, based on demographics, we can take a concept area and drop it in. We don't have to take the entire MarketPlace, the entire concept will not work everywhere," Chagares said.

The chain decided that this store, at about 100,000 square feet in total, with a 70,000-square-foot sales area, was the best size to test the format, and had the right demographics.

The location -- Orland Park is a southwest suburb, about 40 minutes' drive from downtown Chicago -- attracts middle- to upper-income households, dual-income families, college-educated people, families with children and senior citizens with sizable disposable incomes, she said.

Still, the store is a true prototype, serving only as a starting point in the MarketPlace's evolution.

"It is too new for us to plan any major changes, but we are looking at additional signage, adding more seating, revising the packaging and labeling of our prepackaged entrees and side dishes. We want to retain the MarketPlace name, but may reconsider how to present the name on the package," Chagares said.

"In six months or two years we may do something different. Our mind-set here is to continually challenge ourselves to determine what our customers' needs are. We learn from our customers every day.

"The possibility exists that we could have another whole MarketPlace, including all the concepts, in another store. Our other option is to take individual concepts from the MarketPlace and put them in remodels or new stores," she said.

In any configuration, with the MarketPlace Jewel's goal is to create a destination, Chagares said.

The overall design of the concept was developed with the help of Levy Organization, a Chicago-based food-service company. Steve Katz, a chef from the Levy Organization, spent seven months at the Orland Park store developing recipes. Jewel also received assistance from David Ockleshaw, president of Bellwether Co., another local consulting firm.

During development, the designers conducted focus groups to determine what customers wanted, what level of quality they were looking for and what they would pay for. Name recognition was also studied, Chagares said.

The focus groups told Jewel that consumers want quality at a fair price -- but what that means varied by demographic group, she explained.

"It is a real challenge for us to develop product lines that meet everyone's expectations of what a meal solution should be. Consumers have the perception that supermarkets should be less expensive than anybody else, while being just as convenient, if not more so," Chagares said.

"Our customers want high quality at a low price," added Karen Ramos, Jewel's manager of public relations. "They seem to be unwilling to pay restaurant or even fast-food prices for what they purchase here."

Now, the store will serve as a meals-menu concept center for other Jewel units. "This is our test kitchen for the chain. Items that do well here will be considered for further expansion to the other stores in the chain," Chagares added.

So far, the three best-selling prepared food items in the MarketPlace are meat loaf, vegetable lasagna and turkey tetrazzini. Some of the signature items in the MarketPlace are stuffed grilled portabella mushrooms, Amarillo chicken, pico de gallo and crab cakes, Chagares said.

Amarillo chicken is the top-selling item in the cold prepared-foods case, she said.

"These items are starting to build a following; those may be items we will take to the rest of the chain," she said.

Meat loaf was one of the first items offered in the prepared-foods section of the MarketPlace and remains a favorite with customers. On the other end of the spectrum in terms of price and uniqueness are the stuffed grilled portabella mushrooms, one of which is large enough for two people to share. On the day SN visited the store, several pans of the mushrooms had been sold from the hot case by late afternoon.

Chagares said Jewel's plan is to work with outside companies that will pick up the production of the best sellers from the chain's own recipes.

"We are looking to outsource some of the top-selling items from the chef's area. We want to develop items that can be taken chainwide."

Developing a prepared-food product that can be sold chainwide can take from four months to a year, starting from scratch with a new recipe, she said.

"To do this right, we believe we will need a combination of prepared in-store, fresh-prepared and delivered fresh, and a little thaw and sell. By offering this type of combination we will manage labor cost. We cannot afford to do all scratch cooking in every location."

A chef from the Levy Organization was initially on premise, and trained store employees. There is no longer a chef on site; the store has visiting chefs but they are not necessarily from Levy, officials said.

"Many food-service companies are willing to help us develop recipes. And we hope to develop more recipes in the future. What is important is that our product offerings in the MarketPlace keep changing. We will probably end up with eight to 10 core items, then another five or six items that change every day," Chagares said.

Meanwhile, customer loyalty is already being fixed on selected items in the MarketPlace. For example, the store heard complaints from customers when its prepared meat loaf was not available. Complaints were also fielded when the store stopped offering wild forest mushroom soup every Tuesday at the soup bar. Both items had to be brought back in response to customer demand, Chagares said.

"There are certain items we will continue to maintain because they sell well all the time," she noted.

The MarketPlace area has one of the store's two entrances spilling into it. The area is equipped with three cash registers, for fast and convenient check out: two in the coffee shop and one in the deli, near the leased pizza department.

First in the MarketPlace traffic pattern is the PapaNicholas coffee shop. It is operated by the bake shop, which also has a European Bread Co. service area and self-service display in that section.

Customers can request custom bread slicing. A wooden loaf of bread, sliced into various thicknesses, each bearing a number, helps customers identify the desired thickness. (An in-depth look at Jewel's in-store bakery strategy appeared in the April 21 issue of SN.)

"Seven of 10 customers request custom slicing of the European-style crusty bread," Chagares said.

The European Bread Co. is a brand Jewel developed within the last year to encapsule its European bread program. All the Jewel stores carry the product but not all of them use the name. Where appropriate, European Bread Co. shops will be added to stores.

Next in line is the soup bar, offering two or more varieties of homemade soup or chili, served hot. "The soup bar has been a nice surprise for us. It is doing well. We will consider putting it in other stores. All that is needed is a 4- to 6-foot section," Chagares said.

Following the soup bar are service and self-service displays of chilled prepared entrees and side dishes. The service case has an attractively garnished restaurant-style presentation.

Prepackaged entrees are in dual ovenable cardboard boxes bearing the MarketPlace logo, and sporting a clear film window.

Also visible to consumers is the deli kitchen, behind the service and self-service displays. Having sight of the open preparation area gives customers a high confidence level about buying the food, Ramos said.

The kitchen is equipped with a braiser, stove, steamer and convection oven. It also has a blast chiller to cool down products for the self-service cases.

Next in line is a service case with hot prepared entrees and side dishes, followed by selected hot items, such as rotisserie chicken, in a self-service display.

The majority of prepared-food business is done from the self-service and service hot cases, followed by the service cold case, Ramos said. Different items are positioned in different areas to encourage customers to visit each case.

The selection of self-service hot foods has already been expanded since the store opened. Three varieties of hot rotisserie chicken are offered, plus a Perdue chicken breast, turkey breast, chicken parts and pork roast.

"The chicken parts have been very successful because they offer a small portion. An individual can get a package of four pieces prepackaged in self-service. Some people buy the pieces for the convenience of not having to cut up a whole cooked chicken," Chagares said.

The store also has a Meals to Go program featuring entrees from its self-service hot case. The meal includes a hot entree from the self-service case, such as a whole chicken or a pork roast, plus a cold deli salad. Plastic bags with rolls inside are lined up near the self-service display, and signage explains the various combinations and prices.

"The pricing is very reasonable and competitive with the fast-food outlets. A family of four can have a healthy hot meal for $6.99 based on the price for a regular rotisserie chicken dinner. We will be rolling this out chainwide. It has been made available in all new and remodeled stores in the last year," Chagares said.

In addition, every night the MarketPlace's hot service case features a $3.99 dinner special. One week in March, corned beef and cabbage was featured. In two days, a Sunday and Monday, the sections sold 66 corned beef and cabbage dinner specials.

The leased pizza department, featuring Home Run Inn pizza, stands between the hot prepared foods and a chilled self-service display of deli items that leads to the traditional deli service counter.

"Home Run Inn has a great branded identity in the Chicago market," Chagares said. "It is very hard to compete with that. The relationship with Home Run Inn has worked well for us. We are looking at expanding; we have four locations. Home Run Inn also has three restaurants in this market. They are most popular in the demographics of this area. Their pizza is fairly pricey and upscale."

Jewel had operated its own pizza shops in 15 stores for several years before deciding to try a branded identity.

"We approached Home Run Inn because it was a local operator that serves good quality pizza. We realized in pizza, companies such as Home Run Inn know their business and are expert at pizza delivery. Customers are willing to pay a higher price for a branded product," she said.

About six months ago a Jewel store on South Ashland in Chicago introduced another leased pizza department featuring Reggio's pizza.

"That operation also works well. Which pizza company works best depends on geography and other variables. We are discussing additional locations for leased pizza departments," Chagares said.

Prior to the current MarketPlace concept, the Orland Park store had also tested a McDonald's and a Panda Express. "They did not work out because of low volume. There is a McDonald's and a Chinese restaurant on every corner. We didn't really have a need to address that in the store. Both sides learned a lot from the experience. It gave us insight as to what our customers are willing to accept," Chagares said.

Over the years, Jewel has added and removed salad bars from its stores. Today only about 10 to 12 Jewel stores have salad bars, including this one, she said.

"Sales are good. The price of $3.49 per pound is competitive for the area. Many gourmet salads are included in the salad bar," she said.

On a store visit in March there were about five tables set up within the MarketPlace area, where customers could sit and drink a cup of coffee, or eat some of the prepared food available at the counters.

The seating area is kept flexible to meet demand. Tables can be removed to make room for a special display or special event. For example, on March 6 the tables were removed so the Orland Park store could conduct a seafood cooking class, which attracted 110 customers, Chagares said. Seafood cooking classes are offered in all 150 Jewel stores that have seafood shops, she added.

On the other side of the leased pizza department are more traditional chilled deli items in a self-service case, such as salads and sandwiches. About one-half of the stores get deliveries of prepackaged salads and sandwiches from Flying Food Fare, Chicago, a food-service company that services airlines, Chagares said.

"Another area we centralized is our prepackaged sandwich and salad category. We had 185 stores making sandwiches and salads fresh every day with a one-day code. We felt if we went with a commissary operation we could get better consistency, better quality and introduce new items more quickly. The food has a one-day code and a freshness guarantee. The program was developed and the change was made in about a year and a half. It has been in place for nearly one year and is currently in 97 stores.

Flying Food Fare prepares the food to our specifications, following our recipes."

Flying Food Fare is also participating in a test with Jewel in a few stores. In the test, Flying Food prepares highly labor-intensive prepackaged fruit and vegetable party trays, which are sold in a chilled self-service case in the produce department across from the service deli counter.

"We have been working on this for about six months. We provide specifications for Flying Food Fare to follow. The quality they are producing is as good as what we can make in the store. After the test, trays-to-go will be expanded to all 97 stores currently serviced by the company. Most of the creative ideas for these trays come from our store people," Chagares said.

About 50 Jewel stores, including this latest one, also carry a line of hand-made pierogi, blintzes and other European specialties in the self-service chilled deli case, Chagares said.

Items include a dozen precooked pierogi available in six varieties, in a 14-ounce package for $3.99; a 16-ounce package of stuffed cabbage for $4.99; six hand-made cheese blintzes (14 ounces) for $4.99; and six home-made potato pancakes (14 ounces) for $3.99; all sold under the Kasia's label and displayed in a 6-foot section of a three-deck chilled case.

"The items may be expanded to more stores if the company can maintain the hand-made quality. That is what sells this product. It is just like what Mom and Grandma used to make. The top sellers in pierogi by Kasia are potato, meat, spinach and plum," she said.

Value-added, ready-to-cook meat is also considered part of Jewel's home-meal replacement program. These items are sold from a service counter in fresh meat. Among the best sellers are meat loaf and marinated pork roast, Chagares said.

Customers refer to this store as the store with the trees. The decor includes two large artificial trees, complete with an artificial squirrel, positioned atop a self-service refrigerated case that holds produce on one side and deli cheese on the other, Ramos said.

The store also has a First Midwest Bank branch, Fannie May candy shop, and Caesars dry cleaners, which has its own entrance adjacent to the store's entrance.

"Everything in the store is subject to change, from the tile to the windows, fixturing, and placement of product, not just the products themselves. We have already learned from many of the things done here and are rolling them out to other stores. For example, the floor tiles used in this store are already being used in other Jewel stores," Ramos said.