Value Meals

JEFF WELLS

It's a question that inspires endless industry debate, yet cannot be ignored. And there's no more fitting category to examine it than deli and prepared foods:

What is the supermarket's place?

In this age of carbs, wraps, curbside pickup and high-concept advertising, it's easy to overlook neighborhood supermarkets and the wholesome, consistent meals they offer. Indeed, while many chain restaurants try to out-innovate one another, grocery stores like Hy-Vee, Big Y, Minyard's and Piggly Wiggly are offering traditional meals that can sate the hungry worker, even feed a family of four.

Executives from those four retail companies participated in a recent SN roundtable in Kansas City, Mo., that focused on key topics in the deli/fresh meals arena. Joining SN in moderating the roundtable was Eric Le Blanc, director of marketing for Tyson Deli, a category leader in the deli/fresh meals arena.

Value is the virtue that SN's four panelists say sets their prepared food sections apart from the competition. For them, this means cost-effective, quality selections.

“We offer value, and if the value is that it tastes good and your family likes it, then you're going to come back,” said Norm Vernadakis, director of deli/bakery/food service for Big Y, Springfield, Mass.

Up for debate, of course, is whether this is enough to grab consumer dollars away from the polished appeal of an Applebee's or a Kentucky Fried Chicken. It is they, after all, who are overwhelmingly top-of-mind when it comes to convenience. Supermarkets, on the other hand, are often perceived as the place where you buy a frozen dinner or shelf-stable soup as opposed to a hot meal or fresh sushi.

Greg Frampton, assistant vice president of food service for Hy-Vee, Des Moines, Iowa, sums up the sentiments of the entire panel when he argues that supermarkets shouldn't play the same game as the majority of the restaurant industry.

“We need to focus on what we can do instead of what we wish we could do,” he said.

What supermarkets like Minyard's can do, according to Faye Greenberg, vice president of deli/bakery for the Coppel, Texas-based retailer, is offer freshness.

“Seeing it made fresh, smelling it, watching the animation,” she said. “That's more important for our customer.”

What a supermarket can and should do is a constantly moving target, however. This is because, for all their intentions toward offering quality and holding their ground, supermarkets have to stay focused on the bottom line — meeting the ever-changing tastes of consumers.

Like the rest of the roundtable participants, Katherine Kendrick, deli/bakery director for Piggly Wiggly, Bessemer, Ala., believes that raising awareness of the prepared meals in her stores will go a long way toward increasing sales.

Looking deeper, she said, it's a matter of accentuating the supermarket format as a vehicle for convenience. After all, Applebee's and KFC don't have a produce section or Center Store aisle.

By playing up this advantage, among others, supermarkets can stay competitive without compromising their identity.

“One of the main things, I think, is trying to get them into the store, getting new business in there,” Kendrick explained. “And while they're there at the deli, then they can go into produce and get bananas, or a gallon of milk and a loaf of bread.”

SN: As an opener, let's talk about the challenges you see in establishing the supermarket as a meal destination.

Kendrick: Vendor support. That would be one of our biggest challenges. And getting the support from the vendors out in the retail stores. We need to be able to set up a program that can be user friendly for any market, and a lot of times the vendor is not willing to come in and do the work that's needed to help us put a program together. Also, training is a big issue at the store level because we have such a big turnover in deli/bakery.

Frampton: I just think as an industry, if we're talking about the total store, not just food service, we need to do a better job of bundling. We do a pretty good job of selling the components; we do a pretty good job in the produce department. But I think it's a real challenge for today's consumer to be able to know what's for dinner. They come in looking for what's for dinner. We can capture some of that in food service, but on the other hand they're looking for groceries too. So if we were to bundle all the components together to make a meal we might do better at that. Giving them recipes with the shopping list on it might be something we can do for the stores. That's one of our challenges. We're looking at doing more of that.

Greenberg: I think another challenge is having the product fresh, and having it at the right time when the customer is in your store. That's a big challenge to make sure you have the rotisserie chickens ready at 5, 6 or 7, or the hot bread that goes with it. Again we get back to the labor issues — having the people at the right time when the peak of business is there.

Vernadakis: I think the bottom line to the supermarket or restaurant business in general is: The food has to taste good. That's first to me. It has to be good. If it's a good experience on a consistent basis, you'll get the meal. If I come into your store to get a chicken, I want to make one stop. I don't want to make two. If I come in to get a chicken, let's say it's rotisserie chicken — and they're going to come out in 10 minutes — I don't want to wait 10 minutes. I don't want it at 10 after 5. I want it at 5 o'clock. I'm looking for convenience. If I have to make a second stop, I'm only going to do that once, maybe twice, and then that other stop is going to be my first and only choice. And you see that across the whole retail industry. We've seen many times department stores go out of business because you go in to pick up the item that you want and you can't find it. It gets to the point that you don't even want to read their flier anymore because you know the chances are that they're not going to have it. So if you don't have that consistency — and in our industry, if you don't have the quality — to make me want to come back, you're fighting a losing battle.

BOOSTING CUSTOMER SATISFACTION

Frampton: One of the questions we pose to our stores is, “How many customers are leaving your stores after the 4 to 7 [p.m.] experience and driving through somewhere on the way home, or ordering a pizza when they get home?” They've just been in our store, and they're still going to drive through somewhere. That's our customer. How do we capture that customer so that they don't feel the need to do that? We've got the offerings. I just think it's a matter of getting it in front of them.

Vernadakis: We have the gallon of milk, we have the loaf of bread, we have that bagged salad, we have the bananas they need for breakfast the following days that can help them avoid that second stop. If they're going to Applebee's to pick up dinner, they still need the gallon of milk, or they still need the fresh bananas.

Tyson: Two issues are heard there. One was quality, one was availability. How do you address that? Some people are doing in-stock guarantees for peak periods. Does that make sense? And quality — obviously if you're overproducing and holding too long, that has its own issues as well.

Greenberg: We don't keep our chickens past a four-hour holding time. And we have recipes set up so that either it's a rotisserie chicken salad, or it could be a fried chicken salad. We're repurposing to use that shrink.

Vernadakis: We guarantee our birds, actually, from 11 a.m. to 7 p.m. We started out at 4 p.m. to 7 p.m. We have blast chillers in all of our stores, and we also do the byproducts, whether it's a salad, wraps, pot pie. We have a huge pot pie business — seasonal, obviously. We also have a rotisserie chicken soup where we get the components and we add our own chicken. And that's our signature item. That's the thing that we stand for. As retailers you need to be known for something. You've got to have your original hook, and then you can build your products, your program, from there.

Frampton: I think we do a good job at breakfast, we do a good job at lunch, we do catering. Where we feel we have an opportunity is in that 4 to 7. We want to let the customers know that we have product for them when they need it. We've had double-digit increases year after year on rotisserie, and I think we still have a lot of potential there. “Fresh at Five” is what we're saying.

Tyson: How can you approximate the level of convenience that you find at, say, an Applebee's To Go, which has an emphasis on carryout and curbside pickup?

Frampton: To develop a program for a company is difficult. We have some stores experimenting with curbside pickup. We'll learn from it, and we'll do it some day, I'm sure. But I want to focus on that customer that's already coming in right now.

Vernadakis: I agree. There are 20,000 to 25,000 customers walking by our offerings that the restaurant industry and Applebee's doesn't have. And the other side of it is, define curbside pickup. When it's a supermarket, what is it? OK, I want my meal, but can you grab me a gallon of milk as well? And I really need a loaf of bread. Can you do that for me too? It can really get convoluted. Restaurants don't have a supermarket as their backroom to pick from, and the consumer is aware of that. They will ask you those questions — can I have my grinder or my sub on Wonder bread? And it'll be over in aisle 12. Whereas you go to a Subway, and you can't ask that question. We look at our limitations and try to do what we can do very, very well and let the restaurants fight for that business. They're starving from the competition, and from some of the competition with supermarkets as well. The way we look at it is we're not trend-setters. We look to see what the trends are and what's viable, and try to capitalize off that wherever we can.

FINE-TUNING MERCHANDISING

SN: What can you tell us about the actual model for your offerings, and how often you're changing that and how you're gearing that to the consumer? Is it a comfort food model? Is it an upscale model? And how key is that to the consumer?

Greenberg: I'll gear mine towards either the seasonality, or I'll play off what the meat department has on sale that week, or if there's a brand new catch of the day, I'll go ahead and put that in our hot case offering. We're cross-merchandising as much as possible, because that's an advantage that we have. We're showing customers the ease of cooking, that you can either get it raw if you want to make it yourself, or if you don't have that time, then we have it there prepared for you.

Kendrick: I'm gearing a lot of our programs now toward nutritional value, and there are some things I'm working on right now — bringing in a new fish program for our stores, and bringing in a new sandwich program. We're relaying that to the customer through signage. And there again is where I come back to vendor support, and trying to get them to help us. We're independents, and I pretty much have to sell the program to the retailers. We have around three shows a year, and in those shows I try to get the vendor support to pull together. We've also been doing a lot of sampling. That's something that we're also trying to push. Restaurants don't allow sampling, whereas in-store you're able to do that, and capture customers there. But, one of the main things, I think, is trying to get them into the store, getting new business in there. And while they're there at the deli, then they can go into produce and get bananas, or a gallon of milk or a loaf of bread.

HEALTH AND WELLNESS TREND

SN: What about the health topic? Obviously, we hear more and more about it in this country, but you always have the suspicion that people are talking about it and not necessarily practicing it. How does that play out on the food-service side?

Vernadakis: Ask Ruby Tuesday. You know, Ruby Tuesday cut back their portion sizes a few years ago, and it hurt their sales some 5%, 6%, 10%. Research that I've seen says that consumers, when they go out, want to indulge. They talk like they want to eat smart and eat better. And maybe during the week they will, but when they go out they want to have a little bit of fun. What they say and what they do are two different things, and we take more of a wait-and-see approach, really judge the groundswell of what we're hearing. The low-carb thing a couple of years ago is a prime example where everyone was gung-ho into going low carb, but then if you tried some of their product, it was like eating cardboard. We were in it in a way that was easy to get back out again, where we could take advantage. We got in, we enjoyed the spike, and then we were able to back out when the trend softened.

Greenberg: It's not playing out in a big way for us. Fresh is definitely a bigger trend for us than health. We get a couple of questions on the trans fat free, but really it's the freshness of the product — seeing it being made fresh, smelling it, watching the animation. That's more important for our customer.

Vernadakis: We offer value, and if the value is that it tastes good and your family likes it, then you're going to come back. The perception of value is more than price. It's about the value of having a well-made meal for your family.

Frampton: I have a feeling if it was a Chili's or an Applebee's that did some of the things we've done, they'd blow it up and market that. But we're offering more steamed vegetables, more brussels sprouts, and some of the darndest things in our hot cases we really didn't have that much of a year or two ago, and they're selling. So customers are wanting it. But they don't seem to want to give up that other half. The low-carb craze came around and I anticipated a big drop-off in our breaded chicken program, but we didn't see it. With zero trans fat — New Year's morning I get up and I'm seeing that all over the news. I'm thinking, we'd better get on that now. But we waited, and we still haven't. I can honestly tell you, I can count on one hand the number of inquiries we've had from customers wondering when we're going to do it. We are taking a wait-and-see approach.

PRICING STRATEGIES

Tyson: How do you feel about pricing across your prepared foods offerings? Looking at the $3.99 rotisserie chicken — are we leaving money on the table or is that just the reality of the consumer perception of value?

Frampton: It's both. We get pressures from within saying, well, the supercenter down the road has this price on chicken, and then there's KFC. Which one we compete against — that's always a dilemma for us in the grocery store, trying to identify who we want to be, and then what we want to beat, then positioning accordingly. Until you can do that, you're going to chase both ends. We don't directly compete with either one, honestly. We just found a middle ground where we feel like we can take a look at our bottom line and manage from that angle. But we're not embarrassed about our pricing in comparison to the low-price operator, and we're a heck of a value compared to the other end of the line.

Greenberg: It's presenting a great product at a great price. We do a 3¼- to 3½-pound cooked bird, and at a great price point, $4.99. It's hard to beat that. Four or five other players in the market are at that and below, or sometimes higher, so you're fitting right in with what they can go anywhere and buy.

Tyson: Some of your competitors have a Boston Market inside their stores. What's your reaction to something like that?

Vernadakis: A competitor of ours does that. We've gotten out of that whole rotisserie war. We upsized our chicken years ago to the cooked weight; the bigger one's the 3½-pound, and we even went to a bigger chicken where we're cooking a 6-pound roaster. We make a scratch pizza where we make the dough. It's a great program that competes against a lot of pizzerias. We started the whole thing on a Monday, when most of the pizzerias in our area are closed. We try to mirror off of what the restaurant industry does. We have specials every day. We have a daily sandwich special, daily hot food special, and then we do an evening family meal special every day. And we only change a couple of them that are seasonal. They're very good values. They've simplified the kitchen, and it's also simplified the customer's decision. They know that they can come in on Monday for our pizza and get a value.

Tyson: Big Y has done a tremendous job with pizzas, Hy-Vee has done a tremendous job with Chinese kitchens. Where else have you gone with success, and how do you think that's grown your programs?

Kendrick: Smoked meats. We've had a lot of retailers, especially lately, that have gone into smokers, and they've been tremendously successful. They've been able to use the meat from the market. So we've been able to cross boundaries there, because the market and the deli are always going to have a little ongoing battle. This is another way to sell that piece of meat. And then, of course, if it hasn't sold in “x” amount of time, then it goes into the self-service case, or it's chopped up and made into barbecue sandwiches, or barbecue by the pound. We're trying this program on a group of 26 stores, and it has been very successful.

Greenberg: With our Carnival stores, we've had great success with our hot cases. We have restaurant-style entrees in there made fresh every day. To go along with that we have our tortillerias where we have our corn tortillas or our fresh tortilla chips, tostadas, taco shells. That's been very successful.

MEAL MARKETING AND BUNDLING

SN: What are some things that you are doing to create a theme feeling for shoppers? What are some innovative ways that you're looking to attract them?

Greenberg: We just rolled out a six-week Lent menu where we have two fresh seafood items every week, and we call it our “Fresh Choice of the Week,” so it actually goes on the front page of our ads. We fight for that front-page space.

Vernadakis: We also started out with a daily meal special, and we called it “Mad Monday,” and there's “Takeout Tuesday” and “WOW Wednesday.” Each day has a different themed event where the consumers know that on Monday you can get this, on Tuesday it's that. It's like the restaurant when you were growing up that had all the pasta you can eat on Wednesdays, and that restaurant did it forever. It's really the same concept.

SN: How often does it change?

Vernadakis: We have standards that have been going for a couple years. Pizza's a 52-week program, but we do our potpie on a specific day — we do it on Thursdays, and that will run through the colder months. We'll change that over to a barbecue pork rib through the summer months, and then we change that back. So we make it go away, and then it creates that anticipation of, ‘When's it coming back?’ I think that's an area where we as retailers could take a real good lesson from the restaurant industry, because they're not afraid to put an end date on products and make them go away. Have it come back next year; play it up over the next three weeks as “coming soon.” We have countdown clocks in our stores to where if we have something coming back, we'll actually count down to the day it's coming. And that goes around the whole supermarket, not just food service. Our seafood department does a great job with Copper River salmon, and every year they count it down on their clock. We play with the front page of our advertising supplement as well. Our company is very generous in that respect. They understand the value to what the food-service department brings to the overall store.

Tyson: How important are the meal deals?

Greenberg: We do quite a bit of that. We have a $3.99 special where there's an entree out of the hot case, and whether it's beans and rice, or a vegetable, tortillas. Every day it changes, based on the day of the week. And we get people lined up for that.

Frampton: We've already got them in the store. To bundle a drink with that meal, to raise the price of that meal by a dollar — that doesn't have much value for us. If they want a drink, they know that it's there, and so we pretty much just feature the meal price and don't bundle a lot with it. It typically comes as an entree and two sides, maybe a roll and butter. But to bundle it past that is just raising your ticket, which doesn't look that attractive.

Tyson: But you would bundle sides and the roll with that?

Frampton: Yes. And we offer entrees at a separate price. If you're a customer that wants to just carry out that spicy salmon, we offer that at a price, and then if you want you can pick your sides out of the case.

Vernadakis: We do some bundling. Like I said earlier, we have our sandwich of the day, and you add “x” to that and make it a value meal in our sandwich shop. With hot meals, we do the meal and then two sides, and the bread offering for a set price, but we don't get into the drink or any of that kind of stuff. We offer them in our pizza shops where you get a couple slices and the breadsticks and a drink or whatever. But we don't do any bundling with our evening program. We have those sides available, but the seven-day programs are specific items, whether they have a meatloaf, or it's the potpie, or it's the pizza. We don't bundle on top of that. We let the consumer pick that, because — to me — when you're dealing with a family, it's harder to make a bundle that's acceptable to the entire family.

SN: But yet, restaurants are doing it. So how is it they can pull that off with a family?

Vernadakis: I don't know that you have the choice in a restaurant. If a customer comes in our store, they can run to the frozen food aisle and grab a bag of corn for 89 cents. They don't need my corn with butter for $3 or whatever that happens to be. This gets back to that having the supermarket as your back room. We try to understand our limitations. With our core market areas we find that customers will pick up that core center of the plate and then worry about the rest of it when they get home.

Frampton: If you do bundle it — if you say it is chicken and mashed potatoes, or meatloaf and mashed potatoes — I think customers sometimes feel like they have no options. If there's one side dish they don't like, that may be the reason they decide not to purchase that meal. So we throw out the meatloaf dinner and two sides and let them pick the sides; could be salad, could be a hot side.

Vernadakis: And we have them available. For us, mashed and corn are 80% of the side offerings they buy. They don't necessarily get into the others. When you start getting into the green vegetables, you really have to be operationally sound to manage that well if it's hot. You take broccoli; the clock is ticking so quickly. You just have to be so operationally sound, that otherwise the product is not the quality that you want to give them. It's lost its value.

Greenberg: We'll cross-merchandise warm bread throughout the store, or the tortillas in the meat department next to the raw fajitas.

DAYPART OPPORTUNITIES

Tyson: Do you feel good about the way you're capturing dayparts? Where do you think the opportunities are?

Kendrick: I think our biggest opportunity is in the dinner menu. And that's where my focus has been in trying to get that business in there, because you have so many people who are coming in after 5. For me, it's about putting together the right program, because I've got to sell it to 300-plus retailers, and then I've got to put it together to where I have enough of them bringing in things to the warehouse that are going to support it, and support that vendor. So I need their support out there to create these right programs. You've got to have the right type of items that are going to stay up, that the consumer is going to go, “Oh, hey, that's a great value.” We're just kind of letting them know that we have the fresh bread and the fresh sliced meats, and those types of things. So I guess that's where my focus is — to create that kind of atmosphere and get them in during the evening time and capture that business that's already in there, because that's where most of our traffic is already coming from.

SN: Is everybody in agreement on evening, or is lunch daypart the big challenge for others here?

Vernadakis: For us, dinner is probably our strongest, then lunch, and probably breakfast we're weakest at. We've tried different things across the board, but I think it's hard to get the customer out of the car when there are so many different drive-through options. Dunkin' Donuts is on every corner, and the Starbucks are coming pretty strong. You've got McDonald's and other venues that are convenient belly fillers on the way to work. That's been a tough component for us.

Kendrick: I think with most of our retailers it's just the opposite. I think with lunch we're the strongest. Of course, it depends on the area, but you have a lot of construction workers and such out there, and they want a meal. They don't want a little sandwich or a hamburger. They want something to fill their tummies, and offering a meat is very attractive to them, and we've done well with that. Now what I'm trying to do is get them to carry it over to the dinner. That's been one of my challenges.

Vernadakis: You know, Katherine, you touched on vendor support a couple times today, and I agree with you. We'll have vendors come in and want to sell you something by the pound when you want to sell it by the each. It's that supermarket vendor who's coming to you with a supermarket-type product, and they want you to sell it in a food-service environment. We throw it back at them. We say, “I want to buy it by the each so I can sell it by the each.” Put the responsibility back on them for their portioning and their spec, rather than us accept the spec at store level and try to manage it at a store level. If they cook it an extra 5 degrees, you're losing 4% to 5% before you even put it out on sale. All the variables fall into the onus on the supermarket.

SN: But Katherine also brought it up in relation to the amount of support she would be getting with store labor, with educating. How does that play out? Do you need more of that from the supplier?

Vernadakis: We get support, but you pay for it. It's built into a program. It's the cost of doing business.

Greenberg: Although volume speaks greatly for that. If you contribute that volume, then you get that extra support that comes with it.

Kendrick: But you have to get the support to get the volume. One thing that's been like pulling teeth for me is getting the job aides out there for the stores. If you look at a McDonald's, they have the laminated sheets with step-by-step instructions on how to do things. That's something I'm trying to bring more into the deli. Like fish — if you burn the fish, you've ruined the whole integrity of the fish, and the customer's not going to come back and get it. You need to know how to batter it. Do you drop it first and then batter it? And they need to know step by step how to do it. They've got to know how to do it right. They've got such a turnover in the deli. And most of these people in there are in high school and college, or they're laborers, and a lot of them have never cooked. So now you're showing them what to do, and you need to do it step by step. That's important from our vendors' perspective. I do all the buying for the warehouse, and I need to know that they're doing it right out there if we're going to get the turn on the product.

Greenberg: We look at that as education, and I don't introduce an item until I have that step-by-step at the same time that a new product's going out. So that's set up as a prerequisite for the vendor that it has to be done.

Kendrick: Again, it's like pulling teeth trying to get that.

SN: Catering was mentioned — what impact does it have on your businesses. Are you meeting your potential there?

Kendrick: I think that our independents do a really good job with that. They're also doing a lot of community things, where they're helping out the fire department with their annual community fund-raiser, and cooking their turkeys for them and whatever. Being a part of the community with the deli, to me, is a very important part of the business, and getting that catering business out there into the community.

Frampton: Twenty percent of our business is done off-premise. We do the pharmaceutical sales rep-type catering too, and drop-off sales, things like that, all the way up to events where we feature an on-site carving station.

LABOR INVESTMENTS

Tyson: What are the sorts of conditions you look at when deciding where and when to make additional investments, whether that be labor or equipment. What sorts of things would lead you to consider making other choices?

Greenberg: For us, it's more menu-based. It's how much of the preparation is scratch, how much of it is prepackaged. We have to really take a look at that, especially at Carnival stores. We will add that extra body if we need to. If volume has doubled or tripled, we will add that extra body to take care of the customer.

Frampton: Our stores schedule individually, so that's really not an issue. We pay attention to our gross, and we have a labor percentage that we try to spread in between, and that we kind of focus on. After that, it's up to the stores to make the decisions to get the labor in the right place at the right time, and to see that that happens. A lot of the way we measure things, I wish they didn't even apply to us. Unfortunately, they come with being inside a grocery store.

SN: So there isn't a formula for activity-based costing that the entire organization might use on something like this? It's somewhat individual?

Frampton: In our case it's individual. We do measure them. There's a report at the end of every month, and naturally they want to be at the top of each of the categories. But I'm not impressed with the highest productivity members or the highest gross. If you're missing opportunities, those need to be addressed. Put some hours back into the department at key times, service the customer, do demos, things like that that I know we need to do better.

SN: Regarding scratch vs. ready-made, and the role of commissaries, are any of these issues changing in terms of the focus you have on them, or is it pretty much static as far as the philosophy of each of your organizations?

Frampton: We use a salad manufacturing facility that also has the ability to do USDA products, primarily for our meat department, but they do better tenderloins for us. That'll be a big deal for us this year. The salad manufacturer — they do cut fruit, they do some of our vegetables for salad bars, stuff like that. But they're not a cooking facility. Well, I say that, and they actually do make soup for us. It's not like they cook and deliver. Rather, they produce those components for us that are then ready to cook.

Vernadakis: Greg, when you say salads, do you mean potato salad, and that type?

Frampton: Yeah, those types of salad. And one thing we asked them to do, because we see things going toward a fresher feel, was to develop a component salad that you can mix at the store level, like a kit salad. We introduced that two years ago, and you know that just didn't get legs, but we weren't ready to give up on it. Then just about a year ago it started taking off. Now it's the No. 1 SKU.

Vernadakis: We don't have either. We don't have a commissary or anything. We just partner up with certain people to do things for us. It's something we've talked about, but we're not at that level yet.

Frampton: We have a chicken product that we've kind of cornered the market on. It's a cowboy griller. It's a chicken breast that's stuffed with hot pepper cheese and jalapeno peppers. And there's also the cowgirl; it's got Monterey Jack cheese and green peppers. We have six different grillers, as we refer to it, and they spend a lot of time doing that. They also do a pre-made, twice-baked potato in that facility. We'll literally sell thousands of those a week. And bratwursts. We have a big sausage line.

Greenberg: We also don't have commissaries. We do have recipe books, where the stores have recipe books where they produce the products themselves.

Kendrick: We don't have commissaries. But we have introduced within the last year salad kits. It's taken them awhile, but that is an avenue that's growing the more stores are participating, and the more support we're having at store level, where they show you how to change over the salads where you have “x” amount of days, and sampling to the customer base.

TECHNOLOGY SOLUTIONS

SN: On the technology side, are your operations taking advantage of some of the newer innovations, such as deli ordering systems, kiosks or beepers, things like that? To what extent is that being helpful in the stores? These are technologies that would actually have customer interface.

Vernadakis: We have deli kiosks in certain stores. We're working into a new program that's going to have the item checkers around the store as well as deli sandwich ordering, pizza, cake ordering as well. Over in our bakery department we have a very big cake business.

SN: Are there different technology needs for the food-service side?

Vernadakis: It's interesting. When you go to the airport, look at all the systems they have, like the touchscreens. There are all kinds of POS systems out there that do so much for restaurant operators, such as Micros. It'll beep the manager if they're exceeding their inventory levels, won't let an employee clock in before their time. There are just so many things. They're miles ahead of the retail industry. It's tough to manage two POS systems when you've got buy-one, get-one-free programs. You've got all these other little things that you're doing. It's almost impossible to ask your IS department to manage two separate, in-depth POS systems. Because you could have a customer walk up with a bottle of water, and it's buy one, get two free. It's got to be able to talk to the whole system. It's involved.

Frampton: I'll tell you, my kids are at the age where they would see that as a real service. They look at it as something cool. So we've got to look into it. It's not a separation of service — it's another angle of service.

Vernadakis: Absolutely, for us as well. We're very customer-oriented. But yes, it's more of a convenience for the customer than anything else.

Frampton: The other challenge, too — and I think we're all faced with it: We've got wine and spirits, and Healthnotes, and we need those to be one rather than have an additional layer. So I think they are actively pursuing which one's the right one, and then we'll build our own or buy one.

ETHNIC FOCUS

SN: Where is the focus with each of your stores as far as ethnic offerings go. And beyond that, how are you making those offerings available and appealing to people who are outside of that ethnicity? The appeal of spicy foods, for example.

Greenberg: We have a very big Hispanic influence. And not just the regular Tex-Mex. It's more of the cooking sauces, the moles, the real interior foods. You can get a taco anywhere, but to get those real classic — whether it's a carne asada, or the different types of soups we make — they're really after the home flavor.

Frampton: There's a difference between attempting to sell food to an ethnic group and selling ethnic foods to the general public. We don't attract a lot of Asian customers with our Asian offerings. It's you and me that are buying, not them. I'd have a hard time putting a lot of that food on display that Asians cook for themselves. Most of the food that you eat at Chinese restaurants today isn't authentic. It's a more Americanized version of the Chinese food. It's the same thing with our Mexican brand and a couple other categories. We've Americanized all of them. We have pockets where we need to do a better job of addressing those foods. But really, if you look at what we offer today, it's more for the general public than trying to attract an ethnic customer.

Greenberg: With ours, we take a different strategy of how do we get the regular everyday shopper to try these foods and want to come back for them?

Frampton: We need to work on that.

Vernadakis: We're New England. We're pretty much last along the board of these trends and stuff that goes along. We're a very fickle pallet.

Frampton: We need to keep a focus on what we can do instead of what we wish we could do. If we chased every trend that's out there — Boston Market, for example, came and went. I can tell you, every time one of those trends came out, there was pressure to get on board, to do that. And we just keep a focus on what we're good at and try to attract as many customers as we can. It seems we're much better off just focusing on what we can do well as a company.

Vernadakis: You've got to be pretty darn sure that it's going to be a viable program for you. I couldn't agree with you more, Greg. We have to stay with what we do well.

Frampton: We tried Mexican at half a dozen stores and — it wasn't authentic, obviously — we found that every Mexican restaurant out there serves food that's made to order. We sell food in the hot case displays, not off a menu. People buy food with their eyes, and they come up and can see the offerings from our kitchen. They can go from the salad bar to our Chinese offerings, over to Italian — we've got pizza and calzones — and fruit offerings. And we tried to plop in a section where you had to order off a menu and imagine what it might look like. It just didn't hold up; it's not meant for the way we display foods. This shows why, like I said, we need to focus primarily on what we can do.

NEAR-TERM GOALS

SN: Where would you like to be a year or two from now in terms of what you'd most like to accomplish in the food-service operation?

Kendrick: I guess my target is — because most of our stores are in rural areas — smoked meats and fried chicken and those type of things. Wherever our stores' business is, I'd like to help them grow and be better at doing what they already do. And like I said, we're putting together a better fish program where, before, we were working from the meat department fish. Now we're looking at food-service-type fish, more portion-controlled, and that sort of thing.

Frampton: I would just like to be more top-of-mind in our customers' eyes when they're looking for that evening day part. That's probably our biggest focus. We're happy with the items we have, and we'll keep getting new ones. Just to get a hold of that customer in their mind. We haven't spent a lot of money on marketing. But it will happen by us making it a focus within our company, and everything we talk about will be focused on that. We'll have live demonstrations, and everything we can do to get people tuned in. That's our mission. And our stores are really good at this. We give them really clear direction and ideas on how to get there, and they generally take the ball and run with it. So I think we'll be better two or three years from now than we are now.

Vernadakis: I think for us, we're continually looking to streamline, to simplify tasks at store level — really focus in on what we do, and do it really well consistently. And that's, I think, what we're doing, and what we're continuing to do. The goal is for the customer not to know what's happening. They should not see a change. It should be seamless.

Greenberg: For Minyard's, in the next year or two it's going to transition into the Carnival stores. So, for me, it's really the focus on, how do you appeal to the fun, fresh Hispanic customers, and then not exclude your other customers?