Raising the steaks

Handmade pies, an extensive service seafood case, locally produced groceries and a top quality meat department place Karns Quality Foods newest store in a class above the rest. The newest Karns Quality Foods store in Carlisle, Pa. is butchering the competition. The eight-unit independent prides itself on its meat department, and in Carlisle that really shows. The entire operation is service—a customer will never find a pre-wrapped package of chopped chuck—and accounts for a whopping third of total store sales. Customers come from miles around to partake of Karns’ famous Freezer Bundles promotions and stock up on steaks, ribs, roasts, chicken and ground beef. “We are a meat store that sells groceries,” Scott Karns, owner and CEO, of Mechanicsburg, Pa.-based Karns tells Grocery Headquarters. The big neon “PA’s Best Meat Dept.” sign above the entrance drives home that message. Karns admits it is a self-proclaimed proclamation. “But when you walk through our meat department you will say, ‘Wow! That meat department is totally unique.’” Karns is a lot more than just meat. The chain is renowned for its made-from-scratch pies, cakes and other baked goods. In a bid to become more price competitive with market leaders Giant Carlisle and Weis Markets it has a “Save the most with Max” program featuring hot deals on grocery products, and holds door-buster one-day sales to draw in shoppers. To further build loyalty, Karns has developed a frequent shopper program that rewards customers with free Karns gift cards. The chain has arrangements with dozens of farmers to carry local produce and is equally strong on the local front when it comes to grocery, stocking scores of local and regional products, like Jake & Amos pickled vegetables, Martin’s hand-rolled pretzels and Chef Tim’s Sweet Balsamic Vinaigrette salad dressing. Vendors say Karns goes the extra mile to assist them. “Karns is an awesome retailer,” says Chef Tim Jutzi, owner of Etters, Pa.-based Chef Tim Foods. He sells about $70,000 worth of dressing through Karns. “I’ve gotten free advertising from them in flyers. They advertise my demos at the store. When my dressing goes on sale they put pictures of it in their flyers, and I’m not charged anything for this. I cannot tell you how much I love that.” One of the places Chef Tim demonstrates his “Shake. Shake. Shake. Don’t Refrigerate.” oil-based dressing is at Karns’ Carlisle location. Housed in a small strip center with Aaron’s rent-to-own and Family Dollar as neighbors, the store was previously an AWI corporately-owned Nell’s ShurFine. “They just didn’t renew the lease,” Karns says. “We looked out in this direction decades ago, but Nell’s was already here and we never build our own stores. We always take somebody else’s location. Then the landlord called me and said the property was available. We did a market study and got a good lease.” At about 40,000 square feet, Carlisle is the fourth largest store in the chain. “When we came in here this store was a vanilla box,” Karns says. “It was stripped. They had auctioned it off.” Karns furnished the store with top-notch equipment on the cheap by buying the entire contents of a five-year-old upscale chain store in South Carolina that had closed and was itself being auctioned off. “It was so fortunate to get a store that was five years old and not used hard,” Karns says. “They had the best quality equipment, the best chicken rotisseries, the best shelving, the best dairy cases.” Karns bought the store in December. His nephew Mat Rudderow, vice president of technology, went down to South Carolina to ship the fixtures back. “Mat spent three weeks, seven days a week, with a crew, tearing it down, putting it in boxes, sending it up in a truck and then putting the puzzle back together up here,” Karns says. “The only thing we insisted on being new was our meat cases and our front end because we have the newest version of NCR scanning available.” The meat cases had to be new because meat is the hallmark department of the store. “Our stores range in size from 30,000 to 50,000 square feet, but our service meat and service seafood cases are pretty much exactly the same,” Karns says. To accommodate the service cases and the large work area required, the back wall meat department was expanded out into what had been Nell’s center store section. “The meat department in this store is the same as the others. The center store section just shrinks, but the customer doesn’t realize that because we ended up putting in all new expanded frozen and dairy departments. We over SKUed the store for perishables and under SKUed it for center store,” he says. The meat department is extensive and carries cuts—shin beef, pigs feet, chicken gizzards, lamb, to name a few—that the bigger chains do not, along with an extensive selection of homemade sausages, including a proprietary Philadelphia Chicken Cheesesteak developed by Karns’ daughter Andrea, vice president of marketing. “We actually still grind our beef,” Karns says. “We don’t use any of those ground tubes. We never have allowed them; we never will allow them.” TV cooking shows always tout that ground chuck and ground sirloin are better than whole steer blends, Karns says. “That is why we only use chucks for our ground chuck, bottom rounds for our chopped steak and sirloin tips for our chopped sirloin,” he says. “Those are our three choices. We don’t sell an 80/20 (meat to fat ratio) burger. Customers are always asking me what is our fat content percent. I tell them we have a target range. This isn’t a chemical analysis product. Each batch is a little bit different.” Tempting Tuesday One reason the meat department does such tremendous business is because of the Freezer Bundles program. Every four weeks, consumers have the option of buying a “bundle” of meat items, ranging from 20 to 40 pounds, for a set price. The Summer Grilling Bundle, for example, included three pounds each of chopped steak, boneless breast tenders, center cut ham slices, center cut pork chops, chicken thighs or drumsticks, homemade sausage and two pounds of Kunzler grill franks. “Customers pre-order them and we sell tons of them—literally tons of them—every week,” Karns says. Another popular promotion is Tempting Tuesday. That is when Karns sells items offered in its bulk program to customers in any amount. Chicken leg quarters, for example, might be 69-cents a pound if a customer buys a 10-pound bag. “On Tempting Tuesday leg quarters are 69-cents a pound for any amount,” Karns says. “We do away with anything that has a ‘qualifier’ on it.” That causes the customers to line up for the bargains. Ironically, at those hot prices many end up walking away with a clear plastic sack filled with 10 pounds or more of chicken, ground chuck, spare ribs or whatever other item is being featured. Unusual promotions are also a hallmark of the 20-foot service seafood counter. In June, for example, a three-day soft shell crab sale was advertised 10 days out in advance for pre-orders. The cleaned and dressed crabs were sold at $4.99 each. “That is a real specialty item,” Karns says. “We call it a ‘foodies’ seafood item because it is not your typical salmon or whitefish fillet and doesn’t have a wide appeal. In crabs there are ‘hotel,’ ‘prime’ and ‘whale’ and we are featuring the whale, which is the largest size available.” Initially, Karns thought he might sell 600 of them. He was way off. By the time the stores closed on Sunday June 30, 1,800 of the crustaceans had been sold. “What sets us apart is our perishables side,” Karns says, pointing to the wooden fixture filled with pies in the department’s center. Lemon Sponge, Strawberry Rhubarb and Shoofly are particularly popular. “We actually still make pies in our store with handmade crusts and real fruit filling,” he says. “We don’t use canned filling but frozen fruit. We have a certain type of cherry that we use for our cherry pie. We have these specific items that we hang our hat on, and our sales skew that way. Our pie sales are double the industry average.” Other made-from-scratch items include layer cakes and whoopie pies; breads are baked in-store using mixes. When it comes to produce, Karns tries to stock local whenever possible. “We go for local when we can, but there are no local bananas,” Karns says. “We do a tremendous amount of local produce and have contracts with a lot of local farmers for peaches, apples, corn and melons.” This year much of that produce is being merchandised in fixed price 1.5-quart totes. “That is a new program that we started with this store and have expanded to all of our locations,” Karns says. “It is real popular. We run better pricing that way. Now the loose peaches might be a little bit bigger than the peaches in the totes, but you’re getting a whole big container. It is more family style.” Many families are also enthralled with Karns’ Bulk Barn bulk food section, featuring more than 450 items. Merchandised in clear plastic tubs, the items are packaged at the commissary at Karns’ headquarters. “The stores can order what they need,” Karns says. “Each item has its own SKU. We keep a store set up in our commissary where we package. When the stores write the orders on what they need we just go through and pull of off the shelf and refill from the back.” The deli department specializes in Dietz & Watson luncheon meats and the majority of the salads are homemade, identified by a “Karns” sign on the bowl, such as Karns coleslaw. “If it is an actual brand we will write that on the price card, like Winter Garden potato salad, which is a very popular local brand.” Across from the deli counter is a large self-service cheese case. “We weren’t sure how this market would do with specialty cheese, but we’ve been thrilled with it,” Karns says. “We do great with the BelGioioso and the Emmi. When this was Nell’s they didn’t carry much of an imported cheese selection.” Karns does carry less standard groceries than Nell’s did, however. “We buy from a whole group of local, small-type vendors that make specialized products,” Karns says. He cites Arooga’s wing sauces made by a local restaurant chain. “We do a tremendous job with it,” Karns says. “The other week we sold 30 cases as a company.” Karns also does a bang-up job with Roland brand gourmet foods and also stocks an extensive amount of Eastern European groceries. Karns is supplied by Supervalu and uses that wholesaler’s Essential Everyday brand as its house brand. “When Supervalu initially introduced Essential Everyday it was a struggle,” Karns says. “We were a Richfood brand, so our customers who liked Richfood were confused on where to go with Essential Everyday. Now if someone moves here from Philadelphia, where they shopped at Acme, or Chicago, where they shopped at Jewel, and comes into my store they will feel at home. I think Essential Everyday is a great program because it gives us across the board branding.” Super Tuesday One of Karns’ quirks is that its sales break on Tuesday, “old school tradition” as Karns calls it. “Customers all the time tell me that we ought to go to Sunday, like Giant and Weis, but because we are so perishably oriented, to have the store properly set up on a Sunday just doesn’t work from a logistics point,” he says. In a more recent development, Karns has eschewed traditional newspaper advertising after taking the advice of his daughter Andrea who pointed out that young people no longer read the paper. “One day I stood outside our store and asked younger shoppers if they get [the local paper] The Patriot News and I couldn’t find a soul,” he says. That is why he is turning his attention to gimmicks on local TV, like the Steaks and a Forecast summer weather promotion on CBS 21 and Scotts Smart Meals on ABC 27. There is also the Karns Fresh Rewards frequent shopper program. Unlike competitors, it is not required to get a sale price, but shoppers accumulate points that can be redeemed for $10, $25 or $50 Karns gift cards when a $350, $800 or $1,500 price level is met. When shoppers reach their desired level they go online and request a card and it is mailed to them. “I’m always surprised that most people don’t pick the $10 card; the $25 and $50 are the most popular,” he says, adding that the data mined from the program is also used to alert shoppers about sales. “We do e-mail blasts off the program. I have a Scott’s Top 10 Picks where I pick 10 items each week that I think are exceptional buys. You click on that and it shows you the whole ad,” Karns says. “Technology baffles me, but we know how long someone looks at out ad. The average is two minutes and 20 seconds. It has been the same for the last three years,” he says. Peachy can At Karns Quality Foods the house brand is Essential Everyday, the private label offered by its wholesaler Supervalu and found on hundreds of boxed groceries, frozen foods, dairy items and canned goods. But the Karns name appears on one noticeable exception—canned peaches. While Karns does stock Essential Everyday canned cling peaches, the clear customer favorite is the 29-ounce cans of Karns Konhaus Farms Yellow Clingstone Peaches. The tree-ripened, home-style canned halves are offered packed in light or the traditional, good, old-fashioned, heavy syrup. “Our Karns peach is local, hand-packed and our customers know that because we’ve sold it for decades under our label. They love our product,” says Scott Karns, president and CEO. They are made for Karns by Kime’s Cider Mill in Bendersville, Pa. in nearby Adams County, where Karns gets most of the fresh local peaches, nectarines, plums, apples and pears sold in its produce department. “Kime’s packs those peaches for only four to six weeks a year, depending on the season,” Karns says. “They have one product line where they are peeling and cleaning the peaches and there are a bunch of women at the other end putting them into the cans and sealing them. They really pack a lot of peaches into those cans.” The Konhaus Farms moniker is kept as a nod to an independent that Karns bought out years ago that originally sold the peaches. “The sad part is I know that someday—and I don’t know what year—Kime’s will just stop canning peaches because the equipment is old. If it breaks down there will be no way to fix it,” Karns says. Until then they remain a best-seller. “We give them our order for the whole year and hope that the stock makes it until August 15 of the following year when they start packing again,” Karns says.