ROWE'S SEEKS TO MAKE A BIG SPLASH IN JACKSONVILLE

LIZ PARKS

JACKSONVILLE, Fla. - Rob Rowe, a 43-year-old entrepreneur who started his professional career as a butcher and went on to develop new business strategies and retail formats for a number of leading supermarket chains, is finally in business for himself.

In one fell swoop last year, he did what few, if any, single-supermarket entrepreneurs have ever dared do: He used his own capital and an asset-based loan to buy seven underperforming supermarkets from a chain anxious to exit an underperforming market.

A few months and many hundreds of thousands of remodeling dollars later, in August 2005, he reopened six of those stores under his own new banner, Rowe's Supermarkets. He sold the seventh store to a local developer, using the proceeds to supplement the investment in his new company.

Rowe, who has been in the supermarket industry for almost 25 years starting out as an 18-year-old in the meat department, progressed up the corporate ladder in a variety of management positions, ultimately finding himself functioning as a "turnaround" specialist for a number of chains including Winn-Dixie and Smith's Food & Drug Centers, where, as a member of their respective management teams, he helped develop alternative formats to broaden their marketing reach.

The work was hard, but rewarding enough that Rowe promised himself that one day he would do a turnaround job for "myself."

He was in the market looking for that opportunity, when through some old contacts he learned that Albertsons, disappointed with its market share in Jacksonville, Fla., was putting on the market all seven of its stores, averaging 55,000 square feet.

The locations, the size and the fact that the supermarkets all had liquor stores attached were perfect for the format that Rowe had in mind, plus, he would not have to move - he lives in Jacksonville.

Rowe won't discuss the financing for the deal except to say he invested his own money and he secured an asset-based line of revolving credit. He also said the six stores are all doing well, and that, thanks to favorable press reports and strong word-of-mouth, he is happy with the way his sales and customer counts are growing.

To create a point of difference, Rowe has focused on two key marketing opportunities: Providing a broad assortment of high-quality brands and items in all his perishable departments and making sure that all his prices are the lowest in his area.

To keep expenses down, he is keeping his operation lean. His corporate office is a remodeled store manager's office in one of his six stores. He has a compact staff of talented veterans, all of whom pinch hit for each other whenever necessary.

"We all do at least three jobs," he said. "Our vice president of operations is also our vice president of human relations. I do some of the buying and we all dabble a little in everything. If someone comes in and the person they need to see isn't here, someone else pitches in to help out."

Rowe has also upgraded the chain's infrastructure.

"We're dedicated to having very effective automated systems and we're working diligently to have that," he said.

Rowe removed the stores' pharmacies to control expenses. Taking the pharmacies out also opened up the whole front of the store so as customers walk in, they can see the entire store, including the expanded produce department, fresh bakery, full-service meat and seafood department, deli, cheese shop, etc.

"I knew I could turn sales around by implementing basic merchandising strategies that had worked in the past. When we went in to remerchandise the stores, we focused on the perishables big time. We changed everything."

To help customers recognize the "value" component of the Rowe's equation, Rowe and his team created a mini-dollar-store section that they have named the "Stuck-At-A-Buck" department. It's approximately 400 square feet with two or three gondolas that display some 3,000 rotating items priced at $1.

"We put all our best deals up front in that department," he said, "so customers will know we're not afraid to sell things at bargain prices."

Rowe periodically moves that department to different parts of the store, partly to make way for seasonal promotions and partly "to keep the store fresh."

To give customers an additional incentive to visit his stores, Rowe developed a number of exclusive supplier relationships. His supermarkets are the only ones in Jacksonville to carry DeLallo luncheon meats in the deli and Black Canyon Angus Beef in the meat department. They are also the only supermarkets to sell blue crabs in the seafood department, and they offer the lowest prices on lobster.

They also carry a full line of DeLallo packaged groceries including olive oil, and they give shoppers free samples as often as possible - for example, letting customers dip some of their fresh baked bread into a DeLallo olive oil dipping sauce.

"The delis, when they were Albertsons, were already large, but we focus on new things such as the DeLallo brand, a larger cheese assortment, and more foods prepared for at-home consumption including antipasti," Rowe said.

"We want to make sure what we're doing is delivering the best every day, and every day, we get a little better, and our customers are stepping up.

"My philosophy is that if I can't do it right, than I don't want to do it. That's another reason why we took out the pharmacies. I asked myself, 'Could we beat the competition, and the answer was no.' So we focus on what we do best, which is grocery."

Their bakeries make items that are unique in the Jacksonville market, like Moose Brownie pies and tropical fruit pies, filled with fresh fruits like kiwi and glazed custard.

"We are looking for things that are hard for the other chains to do," he said.

Rowe's is also a member of IGA, which "has a lot of great programs to help an independent. Being a member gives us great buying clout," he said. Rowe's also stocks IGA private-label products, which helps further communicate Rowe's value story because "a lot of people recognize the IGA brand."

Because Rowe entered the market with six stores at once instead of one, coverage from the local press has been fairly extensive. "We created a buzz in the market when we took over the Albertsons stores," said Rowe.

"People recognize us as a presence, and they think we're a lot bigger than we are. Having six stores also says to the pubic that we're committed to the market. That helps create credibility with customers."

He is also still looking for additional expansion opportunities. At some point, Rowe said he will probably want to build from scratch, but for now he likes the acquisition route.