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Sunflower Market’s fresh take on organics

BY CSA STAFF

Sunflower Market represents something new in the specialty organic and natural food space: a ground-up, dedicated chain with the resources of a major retailer—and, in this case, distributor—behind it. It also takes a fresh look at organic and natural food merchandising, particularly in that it retains the gourmet spin that more upscale competitors have applied, but with a more casual expression.

While Kristen Martin, Sunflower Market marketing manager, soft pedaled the gourmet element in describing the concept, she added that the banner was established based on better edibles.

“Sunflower Market is a product-driven company that takes food seriously, but we don’t take ourselves too seriously. I think that comes across to customers who shop our stores. We offer a focused selection of natural and organic foods at prices close to what you’d expect to find at a conventional grocery store. Because we’re smaller and we taste everything on our shelves to make sure we only bring in the best of what’s available, we’re working hard to make grocery shopping simple for customers. Ultimately, our goal is to provide a fun and friendly place for people to shop for great tasting foods, while offering prices that don’t leave a bad taste in their mouths.”

Unlike Trader Joe’s, which takes more of a treasure/bargain hunt approach to food merchandising strategy, Sunflower Market builds its approach around high-end perishables and prepared food, whether in self-serve or service settings. So, in reality, it’s more like Whole Foods and Wild Oats, although it’s contrived to be a bit more of a comfortable shopping experience for the typical consumer, rather than for the foodie or organic partisan.

Sunflower Market debuted in January 2006 in Indianapolis. The original 15,000-square-foot prototype was modeled on Supervalu’s Sav-A-Lot format. However, rather than going with a discount grocery approach, Sunflower Market concentrated on natural and organic offerings ranging from grocery to frozen and dairy items, produce, deli and cheese, bakery, café, hormone- and antibiotic-free meat and seafood, and beer and wine. Sunflower Markets also include an extensive supplements presentation as the basis for their wellness departments.

In introducing Sunflower Market, Supervalu cited growing customer interest in organic and natural foods as a major factor behind the launch of the new concept, as well as the challenge of specialty concepts such as Whole Foods. As has been stated many times before: The market for natural and organic foods is growing 17% to 21% a year, so consumer interest is driving sales. Supervalu wants its share.

The prototype Sunflower Market was designed to stock 8,000 to 12,000 SKUs of the most in-demand organic and natural items. Supervalu not only borrowed from Sav-A-Lot in terms of the Sunflower store design, but also took a lesson from its approach to price. Sunflower Market was developed to challenge market leaders Whole Foods and Wild Oats on appearance, but also to beat them on price. Typically, according to Supervalu, Sunflower Market pricing is set to be 10% to 15% below that of conventional and natural food stores. The price strategy leverages Supervalu’s ownership of specialty produce supplier W. Newell & Co.

From the start, Supervalu determined to build in customer loyalty quickly. In part, that effort was based on a new private-label organic and natural line called Nature’s Best from Supervalu, which launched at Sunflower Market with an eye toward later expansion to Supervalu’s distribution customers.

Despite the value proposition established by the pricing and private label strategies, Supervalu said it would focus on high-quality products with a particular concentration to minimally processed items with no artificial colorings, sweeteners, flavors or preservatives.

Sunflower Market’s most recently opened unit, in Chicago’s Lincoln Park neighborhood, demonstrates where Supervalu is heading with the concept’s merchandising. As customers enter, they are essentially in the produce department, but they are directly across from a bakery display, under the department designation of French Meadow, that includes artisan breads, muffins, pastries and other breakfast- and snack-appropriate foods, which just so happens to stand next to a self-service coffee counter featuring Green Mountain Roasters natural java.

The produce department features table fixtures patterned after crates to promote an association with freshness, but refrigerated fruits and vegetables get a treatment that suggests extra tender loving care, as they are stored in a walk-in cooler. The coffee/bakery display is part of a larger self-service prepared food operation that wraps around to continue to face and guide the traffic flow and includes a sushi display with a Sinzen branding as part of a larger offering of Asian and exotic edibles.

Some elements of Sunflower Market’s merchandising seem to derive more from conventional supermarkets than they do from the organic and natural specialty segment. Take, for example, the way in which the store presents beverages. Relative to most other organic and natural food operations, Sunflower has an extensive range of beverages. Wine and beer get major departmental presentation, as do soft drinks and alternative beverages, but drinkables are spun off in extensive satellite displays as well, including sports-oriented presentations.

In an example of a display that is more familiar in conventional supermarkets than in organic/natural specialists, the Lincoln Park Sunflower Market earlier this year offered a Sam Adams display built around a basketball free-throw game. Satellite beverage displays of various sizes and configurations can be found throughout the store adjacent to grocery, prepared food and perishables departments.

SUNFLOWER MARKET*

Source: Company reportsFor fiscal year ended Feb. 24, 2007*division of Supervalu Inc.
STORE SIZE < 15k sq. ft.
NO. OF STORES 5
MAJOR MARKETS IN, IL,OH
EXPANSION GOALS 50 UNITS BY 2012

Other elements of Sunflower Market’s merchandising are derived from the organic/natural specialty sector, particularly the extensive wellness department that includes pills, powders, creams and lotions set to improve the condition of one or several bodily systems.

And some Sunflower Market elements are unique. Take the facade of the Lincoln Park store. It’s bright, it’s yellow and it insists, “I’m here,” without screaming the message. The style of the storefront really suggests what Supervalu has accomplished with its store. It has created an organic/natural specialty store that is casual without being flaky, with upscale elements that aren’t intimidating. And it has done so while keeping the prices within a range that is inviting to more consumers. Now that’s something new.

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Seasonal categories aid Family Dollar sales

BY CSA STAFF

MATTHEWS, N.C. Family Dollar Stores reported that net sales for the four weeks ended Sept. 1 increased 3.4% to approximately $494.4 million from $478.3 million for the comparable four-week period ended Sept. 2, 2006. According to the company, the sales increase was aided by strong performance in the food and seasonal categories, primarily toys and lawn and garden, while sales of apparel were softer. Comparable-store sales for the four-week period increased 1% when compared with sales for the similar four-week period last year.

Sales for the fourth quarter of fiscal 2007 ended Sept. 1, were approximately $1.63 billion, or 3.4% above sales of approximately $1.58 billion for the fourth quarter of fiscal 2006 ended August 26, 2006. For the year ended Sept. 1, sales were approximately $6.8 billion, or 6.9% above sales of approximately $6.4 billion for the year ended Aug. 26, 2006.

The company reported that it anticipates earnings per diluted share for the fourth quarter to be in the range of 24 cents to 27 cents compared with 21 cents per diluted share for the fourth quarter last year. For the full year, the company currently expects net income per diluted share to be between $1.60 and $1.63 compared with $1.26 per diluted share for the prior fiscal year.

 

The company expects that comparable-store sales for the September period ending Oct. 6, will increase 1% to 3%.

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Burlington Coat Factory 1Q sales up 2.6%

BY CSA STAFF

BURLINGTON, N.J. Burlington Coat Factory Warehouse announced today that net sales from continuing operations for the first quarter ended Sept. 1 were $673.9 million compared with $656.8 million for the first quarter ended Sept. 2, 2006, a 2.6% increase. These results reflect a 2% comparable-store sales decrease for the quarter. June comparable-store sales decreased 2.1%, July comparable-store sales decreased 3.7% and August comparable-store sales decreased 0.6%, compared with the same periods last year.

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