Leedmark, a year later: Is it a monster hit or a lumbering 'dino-store'?

July 05, 1992|By Michael Dresser | Michael Dresser,Staff Writer

When Leedmark, the vast Glen Burnie store that sells everything from trout to trousers to toggle switches, opened in May 1991, its executives hailed it as a revolutionary advance in one-stop shopping.

A year later, Leedmark executives say they have a monster hit on their hands, but skeptics say the "hybrid market" has yet to prove it is anything more than a lumbering "dino-store."

Doubters point to the fact that Leedmark has yet to announce where or when it will open its long-awaited second store as a troublesome sign that the "hypermarket" concept so popular in Europe -- no matter how thoroughly altered -- is doomed to fail in the United States.

In its emphasis on low prices, Leedmark is similar to a warehouse store such as Price Club or Pace but its merchandising is radically different. There is no membership fee, products need not be purchased in bulk, and the selection of goods is much broader.

Bob Groth, whose Flying Fruit Fantasy chain operates a stand in the Leedmark building, said customer traffic has met his expectations. If Leedmark opens another store, he said, he would consider opening up there.

But Neil Stern, a retail analyst with the McMillan/Doolittle consulting firm in Chicago, said his weekday visits to the store had convinced him that the store "is not doing well" and is not meeting expectations.

"It's not enough to get the rush on Saturday and Sunday and not have the business the rest of the week," he said.

Tom Lenkevich, president of G. B. Leedmark Ltd. Co., said his company is "very pleased" by the store's performance during its first year.

"I believe the consumer appreciates what we have done to bring lower prices to Baltimore," Mr. Lenkevich said. "People are understanding that this is a mecca of saving money."

Leedmark is owned by the New Eldis Corp., a U.S. holding company associated with the giant Leclerc Group of France. New Eldis, a private company based in Glen Burnie, does not disclose sales figures.

The regional grocery trade paper Food World, however, estimated Leedmark's first-year sales of typical grocery store products at $58.6 million, making it the No. 1 individual grocery store in the Baltimore area.

Mr. Lenkevich said Leedmark also has done well in its non-grocery sales. "The consumer has basically shopped the entire store," he said.

Mr. Stern has his doubts. If the Food World figure is correct, that's a good performance, he said, but he doesn't think many people are stopping to buy a suit while there's ice cream in the shopping cart.

"It looks like everything going out of there is groceres," he said.

Food World Publisher Jeff Metzger said the jury is still out on the Leedmark concept. "I don't think they've been a bust," he said. "I think they've really learned a lot."

Mr. Lenkevich agreed that the first year has been a learning process for Leedmark. For instance, the store's managers discovered that its automotive section was too large and its home office department too small.

Leedmark jazzed up its first year with some widely publicized and imaginative promotions that brought thousands flocking to its doors. First there were Thanksgiving turkeys for 28 cents a pound; next came $9.87 Christmas trees. There have also been car shows, boat shows, cooking demonstrations and appearances by such notables as the Chippendales, a popular troupe of male exotic dancers.

There were also low points: In January the store laid off 62 full-time and 32 part-time workers, citing the weak economy. Mr. Lenkevich said Leedmark recalled everybody who was laid off within four months.

As an organization, Leedmark is notably hypersensitive -- especially when somebody calls it a hypermarket, the name given to European megastores that combine groceries and a vast array of hard goods under one roof. Leedmark, said spokesman Edward Segal, is a "hybrid market."

Most retail industry professionals consider that a distinction without a difference, but Leedmark has good reason for being so insistent on the point.

Hypermarkets have been popular in Western Europe since the 1960s, but the term has acquired the reek of failure in U.S. retailing circles.

Wal-Mart Stores Inc. and Kmart Corp. have tried, then discarded, the concept. A recent headline in the Wall Street Journal read: "Hypermarkets: A Sure-Fire Hit Bombs."

"There's something about hypermarkets that American consumers don't like," said Kenneth M. Gassman Jr., a retail analyst with Davenport & Co. in Richmond, Va.

Leedmark can point to at least one important factor that differentiates it from a typical hypermarket. Leedmark's 306,000-square-foot building resembles an aircraft hangar from the outside, but its actual selling space is about 130,000 square feet, Mr. Segal said.

An average European-style hypermarket might contain 230,000

square feet, according to Management Horizons, a Columbus, Ohio, consulting firm.

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