Changes in store at Valu Food Grocery chain to shift focus to fresh produce and prepared meals

Retail BTC

November 12, 1998|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

In its first major attempt to reposition itself in the rapidly changing grocery industry, independent chain Valu Food is shifting its focus from its core grocery business to emphasize fresh produce and prepared meals, President Louis Denrich said yesterday.

The Baltimore region's sixth-largest grocery chain will revamp its layout, merchandise mix and marketing at all 14 stores by next year, in a strategic plan to boost sales and grow in the face of intense competition, Denrich said.

The Baltimore-based chain, founded in 1978, had built its name as a low-price retailer with an emphasis on nonperishable groceries. But "we've found that customers today have a lot of places where they can buy just groceries," Denrich said. "The real emphasis going forward is on perishables and prepared foods."

The chain has stores in Baltimore City and Baltimore, Howard, Cecil, Anne Arundel and Harford counties.

It has started putting the "fresh store" concept into practice in some stores -- the first is the North Plaza store in Parkville -- by presenting a wider selection of fresh produce; developing higher standards for quality and handling of produce; redesigning its signs and logo; and creating a new tagline, "Making it easier to save."

Valu Food also will add sections to display and sell hot and cold prepared foods in all of its stores, and upgrade its delicatessen and meat departments.

The Ellicott City and Columbia stores already have the new produce departments, Denrich said.

The changes at the Parkville store have helped boost sales by 10 percent, Denrich said.

Staying afloat has become increasingly difficult for independent grocery chains as the industry has consolidated and faced new competition from retail giants such as Wal-Mart, retail experts said. In the Baltimore region, market leaders Giant Food Inc., Metro Food Markets and Safeway Inc. all are expanding, and new chains such as Food Lion have emerged.

"Clearly, the grocery industry is moving toward some national companies, and they have to compete with people as efficient as Wal-Mart," said Dave Callahan, editor of Food World, a Columbia-based trade journal.

The smaller chains "don't have nearly the leverage of economies of scale that is so important in the grocery business," he said. "Part of the problem for the independents is that developers view them as lower down in the pecking order. If you're developing a shopping center in a great new location, maybe you'll go to Giant first and Metro second and Safeway third."

As part of its new strategy, Denrich said the company has been working to reduce inventory. "We carry a lot more inventory than our industry," he said.

Pub Date: 11/12/98

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