Raley’s Continues a Legacy of Innovation

Raley’s has a history of innovation. The company was the first to introduce a “drive-in market” and was first to break down the wall between the drug and grocery store. Raley’s has a history of being known for offering fine meats and produce, clean stores and friendly service.

Raley’s takes great pride in operating in one of the richest agricultural hubs in the world, Sacramento, Calif. Thomas P. Raley founded the company 82 years ago, with the vision to provide fresh, healthy food for his customers and treat them like family. He worked with local growers and vendors and bought fresh food in daily. Raley’s was a true “local grocer.” 

True to that legacy, Raley’s continues to evolve and is a leader in the market place. Today, the company’s vision is guided by Michael Teel’s personal passion to help people eat better one plate at a time, company officals say. 

Teel, the grandson of Thomas P. Raley, is now the third-generation owner of this family business. He is surrounded by dedicated employees—including an executive team comprised of company veterans, newcomers and some returnees. 

Today, Raley’s is the pride and joy of its market territory, viewed by many consumers as the region’s hometown supermarket chain and considered the gold standard for grocery retailing in the area. Officials at the privately-held company, which operates the Raley’s, Bel Air Market, Nob Hill Foods and Food Source banners, as well as 13 Aisle One gas stations, say it registers nearly $4 billion in annual sales.

For those reasons, and many more, including great customer service, clean, easy-to-shop stores and a focus on a number of key categories, Grocery Headquarters has chosen Raley’s as its 2017 Independent Retailer of the Year. 

“I left the company in 2002 for personal reasons, I guess the biggest one was for self-discovery,” says Teel, now the president and CEO of the West Sacramento, Calif.-based chain. “I spent seven years trying to find a way to get back after I saw that the company was overly focused on pricing instead of purpose. Once I got back here I had to rebuild the trust with our consumers and suppliers, create a point of difference with our competition and create a purpose for shoppers visiting our stores.”

Raley’s adopted a merchandising strategy in the early 2000s that tested the everyday value pricing model, then dropped it to fall back to the hi-lo model, losing customers’ trust and arriving at too high a price point, even for affluent Northern California. The Great Recession that started in late 2008 was the final blow. Particularly in the state capital area of Sacramento, where the state of California instituted dramatic and historic layoffs to balance its budget, the economy was rocked. Many of the shoppers who were left jumped ship for less expensive alternatives. 

​Teel and his team got back to good, old-fashioned grocery retailing. First, they took steps to motivate the workers—called team members who number about 11,000—throughout the chain. It also meant bringing back the family atmosphere that the Raley and Teel family valued for all those decades. “It all starts with our own team members,” Teel notes. “We recognized that they have the biggest impact on our future because they are the people who work with our customers on a regular basis. If they don’t believe in the company, its values and its future, we will never be able to convince consumers to shop our stores.”

Next Raley’s redefined its relationship with suppliers. Teel made the decision to place the focus on what the shopper expected from the chain and communicate that to its vendors. “Changing the way we did business was not an easy task,” he says. “We are still in a learning mode five years later. But now we know that we are on the right track, and we are working with our vendors as partners to give our customers’ what they want. Our job is to fulfill our customers’ needs.”

Knowing your place in the market is vital too. Northern California is one of the nation’s most prosperous regions. It is also a region where a higher percentage of consumers are demanding healthy, better-for-you products. Stores are separated into four similar, but distinct, merchandising strategies. Based on the demographics on an individual store, the company installs a different merchandising approach, aligning the assortment with the customer needs and expectations. 

It has been an interesting journey for the chain. Raley’s created the self-service meat counter in 1947, and the chain moved to a superstore concept in the early 1970s when Tom Raley removed many walls from stores and merged the food and nonfood sides of the business. The chain acquired the Eagle Thrifty chain to give it a toehold in Nevada in 1973. It purchased the Bel Air banner in 1992 and the Nob Hill Foods banner six years later.  

Now the emphasis is on the future. The chain is unveiling its Market 5-ONE-5 neighborhood store new brand of store(s) this spring with an 11,000 square foot unit in Sacramento. Reminiscent of the neighborhood market, the food offered in Market 5-ONE-5 will be mostly organic, minimally processed, sustainably sourced and free of things not found in nature. “This concept is designed to allow consumers to shop a store where they have confidence the product has nutritional value, taste great and does not contain the potentially-harmful products often found in conventional products,” Teel says. “We are using a completely different supply chain and taking steps to make this a unique shopping experience for those consumers looking for organic and nutritional products.

“Ultimately, this is where grocery is going as consumers become more knowledgeable about the food they eat and how it affects the human body. It allows us to serve a segment of our customers and still allows us to continue to learn about this emerging category,” says Teel. The company believes there is a better model to address the food system and support customers’ health and wellness.

As for the rest of the chain, Teel says that Raley’s is poised for future growth, and perhaps into new markets, particularly the Pacific Northwest. “We are in a good place right now, and we are positioned for growth in all its forms: comp store, new store and acquisition.”     

Feeding Families

For more than 80 years, Raley’s has worked hard to build and create its legacy in Northern California. Much of its success can be attributed to its strong ties to its community. When Joyce Raley Teel, daughter of founder Thomas P. Raley, joined the company in 1985, she made it her mission to create a strong foothold in the company’s community, says Mike Teel, Tom’s grandson, Joyce’s son, and the current president and CEO of the West Sacramento, Calif.-based chain. 

“When my mom joined the company, she really wanted to create a legacy for the family,” Teel says. Part of that legacy includes the Food for Families non-profit organization, which was founded in 1986 by Joyce and former Raley’s president Chuck Collings. The organization started as a holiday food drive and has since expanded to a year-round effort to fight hunger in the community. 

Today, funds are raised through a variety of ways: at the check stand, online, through Facebook and even through mobile messaging. The annual Food for Families holiday program has continued on; last year the program raised over two million pounds of food for local families in need. 

All contributions raised through Food for Families stay in the communities in which they are raised and are distributed by Raley’s 76 food bank partners across Central California, Northern California and Nevada. In addition, Raley’s, Bel Air Markets, Nob Hill and Food Source stores donate groceries and food products to the company’s partner food banks. Food for Families recently expanded this program to include fresh fruits and vegetables. 

Since 1986, Raley’s Food for Families program has raised more than $34 million, which represents 37.5 pounds of fresh food to its partners. In essence, over 31 million meals have been given to men, women and children fighting hunger in its neighborhoods.

A Shout Out for Raley’s

By Ron Fong, president and CEO, California Grocers Association

Growing up in the grocery industry—my family owned several neighborhood markets in the Sacramento area—I was very aware of the excellent quality and service Raley’s provided its customers, and the impact it had on the communities it served.

Raley’s has always been known for fresh produce, quality meats and dairy, and unmatched customer service. Over the years, Raley’s has led the way in innovation, always at the forefront of the latest grocery trends.

While they have grown to be one of Northern California’s largest grocery retailers, it has still maintained its focus on being the neighborhood grocery store with strong ties to the communities it serves. Tom Raley set the standard back in 1935 when he opened his first store, and that tradition continues today with his grandson Michael Teel. 

Among many other projects, Raley’s is deeply committed to supporting the arts, led in large part by Tom Raley’s daughter, Joyce Raley Teel. Through the Raley’s Reach Community Giving program, the company supports hundreds of charitable organizations and community events each year that align with their core causes. 

It has established several food donation programs that have fed tons of thousands of Californians over the years, most notably its Food For Families program, which has donated more than $33 million since its inception in 1986.

In addition, Raley’s is a strong supporter of the California Grocers Association and the CGA Educational Foundation. In fact, Tom Raley was the first retailer inducted into the CGAEF Hall of Achievement. Since then, former Raley’s executives Chuck Collings, and Joyce and Jim Teel have joined Tom in this elite group of grocery industry icons.

CGA is proud to include Raley’s Family of Fine Stores as one of its core retail members. Its dedication to California’s rich and diverse grocery marketplace is demonstrated through its continued support of CGA’s government relations efforts.

Congratulations to Michael Teel and the entire Raley’s family of dedicated employees in being named Grocery Headquarters 2017 Independent Retailer of the Year.