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May 03, 2009

Despite Tough Times, Gourmet Retailers Have an Edge Part I

PrintDespite Tough Times, Gourmet Retailers Have an Edge Part I  

By Bob Gatty
Alexandra Cha no longer works at the National Aeronautics and Space Administration designing optics for space; nor does she teach physics and astronomy anymore at Bryn Mawr College, her alma mater, despite holding a doctorate in astrophysics and years invested in that demanding field.

Cha quit that "high-level, dead-end job" to do what she loves -- be involved with food and cooking, and helping others do the same. Last year, she and her husband, Henry, opened Casual Gourmet, a 3,000-square-foot shop in Glenwood, Md., that sells specialty and gourmet food, and high-end kitchen cook and bakeware, utensils, and supplies.

"We wanted to have something of our own where people couldn't push us around and we were the boss, and I've always loved to eat and enjoy food," Cha said during a visit to her store in an upscale rural community in the Baltimore-Washington, D.C., corridor. "I've always felt I could do anything, so I decided to take the plunge."

In fact, Cha says Henry was so enthusiastic in the beginning, he wanted to open two additional stores -- even though he also operates his own new software and technology consulting business, where she also helps out. "But as we were building this store," she said, "the bottom fell out of the economy. So those plans went away quickly."

Despite the economy, Cha is enthusiastic about her business. "We knew it would be a slow build," she said. "We were right."

But as she discussed her store with its dark wooden floor, white gondolas and shelving, and blue Corian U-shaped counter where specialty sandwiches, soups, coffee and hot chocolate are prepared and served, she paused to greet a couple of customers. "Hi Joe. Hi Libby. How are you?"

"This is a small community and we know most of our customers by name," she said. "We know what they like and what they are looking for."

How does she decide what products to carry?

"I select food because I've eaten it and enjoyed it. Unless I have multiple requests for something I don't like, I don't carry it, because then I can't say that I've tried it and it's good." The same goes for the hardgoods. They have to be something Cha would personally use.

Brand recognition is important, she says, noting that lots of her customers like Stonewall Kitchen products, so she makes sure she has them on hand. On the kitchenware side, Casual Gourmet sells All-Clad, for example, competing with several Macy's department stores in the area, among others, as well as Nordic Ware, and Kyocera and Shun knives.

Her customers expect quality, and they love the service they experience in her store. "They make you feel welcome and special," said Jackie Cristiano, who lives in nearby Sykesville, Md., and often stops by on her way home from work. Cristiano has purchased several All-Clad pans from Casual Gourmet, even though she might save a little money when they go on sale at Macy's.

"It's worth it," she said. "I love this store."

Another customer asked Cha about some frozen par-baked sesame seed bread in the freezer. "It's wonderful," the shop owner said. "Just put it in the oven, and it fills your house with all of those wonderful smells of freshly baked bread. And it's delicious."

Meanwhile, in Grapevine, Texas, Tony Boulton is scratching his head trying to figure out how to deal with sales that have plummeted by 30 percent since last September at Design & Grace, his "European-style kitchen store."

"I was looking for a substantial increase this year, so this is a big shortfall from my objective," he said.

But today's economic climate, which has seen retail sales plummet and forced major layoffs at such stalwarts as Macy's, Pier 1 and Starbucks, has not been kind to Boulton's four-year-old upscale store that sells products favored by Boulton, who is from England.

"The economy has created a difficult situation," he said, "although it's no different than anyone else in our industry is facing. It seems like only the dollar stores and Wal-Mart are doing well."

Will he try to compete on price?

"I'm reluctant to go down-market," he said. "I don't think that would work. I think we have just got to hang in there and look for whatever support we can get from our vendors and our customers, and keep things as tight as we can."

One of the difficulties, Boulton contends, is that some of his larger chain competitors are being forced by their lenders to tighten up on their inventory, and so they are cutting prices to move product out the door. That places stores like Design & Grace at a competitive disadvantage. Worse, he says, some larger high-end retailers are marking down items that usually never go on sale. "Suppliers are just looking the other way," he said.

Part II of this story will appear in the Wednesday, May 6 edition of Dispatch.






Find Reports & Data

The Gourmet Retailer's 2009 Retail Yearbook

There are more than 700,000 independent retailers across the U.S. The Gourmet Retailer Magazine focuses on specialty food and kitchenware stores, profiling these entreprenuers in its print edition. Here is a collection of those specialty retailers in an easy-to-peruse yearbook.

The Gourmet Retailer's 2009 Deli Handbook

A must-read for anyone in the specialty deli business,The Gourmet Retailers 2009 Deli Handbook is now available online. Packed with new product information from top food shows around the globe-including the NASFT Fancy Food Show

CSNews' 2009 Industry Report Study

Industry sales climbed 11.4% to an all-time high of $633.9 billion last year, according to the Convenience Store News 2009 Industry Report, the longest-running compilation of sales and operational results in c-store retailing. 40 pages, including 69 charts.

CSNews' 2009 Realities of the Aisle Consumer Study

Food quality and in-store execution greatly impact a consumer's choice to purchase and consume prepared food from a convenience store, according to the new Realities of the Aisle consumer research study conducted by Convenience Store News, in partnership with Nielsen Homescan. Study is 11 pages and includes 14 charts.



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