Published on: December 6, 2007MNB
received dozens of emails yesterday about the story noting that Marv Imus, whose single-store independent supermarket has served the Paw Paw, Michigan, community for more than six decades, has decided to get out of the business, selling it to his wholesaler, Spartan Stores. It was a testament to Imus’s role in the industry that so many letters came in, and MNB
got a number of requests for a column written about him and another independent, Al Lees, several years ago. (Lees has since passed away.)
So, here it is:On The Road: Dining With Dinosaurs
by Kevin Coupe
It always has amazed me over the years how many supermarket retailers don't like food.
It's not that they don't have good taste. It's just that they don't seem to tale pleasure in the act of eating, don't much care about the beer or wine chosen to go with a meal, and would just as soon go to a local Olive Garden as anyplace else. It just doesn't matter to them.
(I knew one retailer whose idea of a good meal was to take me to Hooters. He said he loved the chicken wings, but there may have been something else going on there…)
I've always felt that one of the great attractions of the food business - as opposed, say, to the tire business - is that I've always found that how and what we eat to be a matter of great romance. I'm just one of those people who finds himself thinking about what's for dinner before finishing breakfast.
Two of my favorite retailers happen to be guys who love food. Maybe that's part of the reason they’re among my favorites. Whatever. But not only are Marv Imus, of Paw Paw Shopping Center in Michigan, and Al Lees, of Lees Market in Massachusetts, food retailers who love food, but they also share the dubious distinction of having stores built on the same competitive quicksand. They're single-store independents, and that's a tough place to be these days.
During a recent trip to San Francisco, where we were all attending FMI's MarkeTechnics conference, I thought it would be fun for the three of us to combine our passion for the business with our passion for food. So we journeyed north to Napa Valley, and gathered for dinner at Greystone, the restaurant located at the Culinary Institute of America.
The menu for the evening, as might be expected, was wonderful: Yukon Gold Potato Ravioli, Creamy Butternut Squash Soup, followed by amazing melt-in-your-mouth Slow-Cooked Ribs and Braised Lamb Shanks. (We shared portions…the food was too good, and we were too ravenous, not to.) And the wine was spectacular - a 2000 L.M. Martini "Continuum" from nearby Sonoma. (Actually, only Imus and I drank the wine; Lees preferred to sip at a favorite brand of vodka.) But what really set the evening apart was frank conversation about the future of the single store operator, and whether these two independents would be able to survive.
A decade from now, I asked them, will the single-store supermarket retailer be a viable, functioning entity in the United States?
The answer was sobering.
Probably not, they both agreed. In some sense, they see themselves as dinosaurs facing extinction.
"Some will be able to survive," Imus said, "but it is going to depend on location and the kind of store you operate. If you have an upscale store in the right location with the right customer base, you can survive. But at the low-end, you’re competing against Wal-Mart. And that means you have to reinvent yourself. The problem is that nobody knows exactly what that means."
Imus noted, between bites of beef ribs that threatened to melt off the bone, that even if an independent such as himself wanted to change formats - become a Whole Foods-style retailer that specializes in natural and organic products - it would be enormously difficult for him to find cost-effective and efficient sources for those products. "And yet, I know that I cannot survive as a traditional grocer." The traditional independent grocer, he says, tends to be firmly planted in the middle, the mainstream - which, in the current environment, is the most dangerous place to be.
But, Lees emphasizes, it isn’t about a certain enormous Arkansas retailer. "I still come back to the fact that Wal-Mart is not our competition," he says. "The single store independent operator's main competition is other supermarket operators." And, he agrees, that single store operator's often biggest challenge is himself.
"How far should we stretch? How big a gamble should we take? And when do we take it?" Lees asks. "You can't take it after the fact. You have to take it before the fact, you have to anticipate. Warren Buffett once said that by the time you identify a trend, it is too late."
Both men said they agreed with a metaphor that is quick becoming one of our favorites - that while the industry has traditionally acted as if retailing is a game of chess, with interconnected moves being planned out long in advance on a playing field with rules that never change, in fact retailing has to be approached as if it is poker - you have to bet quickly and move on, never dwell on failed wagers, and deal with the fact that there are constantly changing rules and wild cards. "The problem is that sometime you have to bet like it is poker, and you can only afford the nickel slots," Imus says.
It was appropriate that over such a fabulous dinner, both men agreed that one of the opportunities for the independent - and one of the toughest challenges - was to become food oriented without being upscale, to create a retailing environment that is food-focused without being precious, and without giving up the image of being at least competitive on price.
As we sipped excellent coffee and perused the dessert menu, the men did disagree on one thing - their individual chances for survival. Imus was brutally frank - he doesn't see how, ten years from now, his company will still be in existence as a single store operator. Doesn’t mean he's giving up, or that he's stopped looking for alternatives and solutions. But the situation seems grim.
Lees, on the other hand, expressed cautious optimism. "I think we'll still be there," he said, "but we will not be the same company we are today. I don't know what we'll be selling, but it may not be soap and household products. I do think we're headed in the right direction, as an alternative to other chain stores in the area. We may no longer be a supermarket. We will be a food distribution business"…whatever that means.
The dinner ended, and we parted company. Imus and Lees went off together as they often do at these conferences, trying to figure out where they will look for the next big idea, and hopefully a good meal in the bargain.
Dinosaurs? Maybe. But my sense, at least for the moment, is that they won't go into extinction quietly.