retail news in context, analysis with attitude

MNB reported yesterday that a new Fareway Economical Food Store is scheduled to open in Minnesota – a 30,000 square foot store that will be a welcome sight for local residents who have been without a supermarket since the last one there closed in 2006.

It will be an unusual store in some ways, according to the local coverage: “Expect clerks to take groceries to customer's cars. The store will be closed on Sundays like retailers of the past. Special cuts of meat and bountiful fresh produce will be available for the asking.”

I took note of the “closed Sundays” policy, and wrote:

Don't get me wrong. I respect a company with unique values and the integrity to put them into practice no matter what the impact on its competitive stance. But it is hard for me to rationalize the “closed Sunday” policy – it is like getting into the ring for a 15 round fight, but refusing to fight during the seventh and fourteenth rounds.

It was no great surprise to me that I got deluged with email on this one. In fact, “deluged” may be an understatement.

Let me give you a taste, and then I’ll respond.

MNB user Shawn McKimens wrote:

You are correct in that Fareway may be out of the ring for some of the rounds – but the fact that the founders based their business values on faith and family means they may measure success differently than their competitors. And while it is can be a good thing to win the fight, it is more important to stay in the fight for the long term – and remain strong. If a boxer really could sit out a round or two while the competition just swings around and gets tired, he'd have time to become refreshed and refocused. Of course the key is you have to be a good fighter when you're in the ring. It sounds like Fareway has their values in line with the customers they serve – and my guess is their stores are busier than most on the days they are open.

Chick-Fil-a is good example of a company that has solid core values – and even though they are closed on Sundays will frequently do more business in six days than their competition does in seven. Ukrop's is also closed on Sunday's and they are considered very competitive.

When you close on Sunday, it's what happens the rest of the week that makes the difference.

It is interesting however that a company that follows biblical principles would be considered unique in today's marketplace.

MNB user Steven Ritchey wrote:

Having grown up in the Dallas, TX area, I remember when department stores were closed on Sunday and even though the grocery, drug and discount stores were open Sundays, due to the Sunday Blue Laws, there were certain things that couldn’t be sold. I also remember when the first Brookshire Foods store came to town from East Texas, it was closed Sundays, and didn’t sell beer, wine or tobacco products, within a few months, all of those policies were gone.

That being said, I like the idea of a store saying, we are going to close one day per week, and we will close on the major holidays. Having worked retail, I can attest to the pleasure of knowing you have the same day off each week. The so called geniuses of the industry may not like the idea, but I’ll bet the rank and file employees love it. Think of it as a way of making retail a little more humane. Let’s face it, the grocery business has long had the reputation of being one of the hardest businesses to work in as the hours can be brutal, and you never know from one week to the next what your schedule will be.

MNB user David Carlson wrote:

I found it ironic that today's edition included both a questioning of Fareway's Closed on Sunday policy and Wegman's refusal to sell tobacco products, which you have lauded in the past. Obviously you'll find plenty of people on both sides of both situations. Both chains risk lost sales and customers from their decisions but both are principled decisions that will appeal to a certain customer base and, potentially, make loyal customers out of them. They're both points of differentiation and both companies should be lauded for standing for something. If every retailer tried to be all things to all people then all retailers would be Walmart.

Who wants that?

Another MNB user wrote:

I grew up in a very small Iowa town where Fareway was the closest store (15 miles away). They had and still have incredible meats, bakery and low price. It wasn't very long ago that they started to sell beer in-store. It's interesting that they prospered before Hy Vee and Wal Mart entered their markets and continue to do well, even being closed on Sunday.

Another MNB user wrote:

I certainly don’t “value” your opinion regarding Fareway Food Stores, but judging by their loyal customers it appears they do “value” the “closed Sunday” policy.

Still another MNB user wrote:

I’ve never entered a Fareway store, but I’ve worked for the competition in Iowa. I can tell you that the Fareway customers stick to them like glue – no fair weather customers in their stores!

Even in the ranks of the competitors, there is an admiration for their approach (and I might even say envy). They appear to be quite comfortable with the market share that finds their “valued approach” attractive. While this may not play well in all parts of the country, it does seem to meet a need in the upper Midwest.

I know I said I’ll respond at the end, but can I just pose a quick question here? How do you compete with a company without every entering their stores? You don't have to spend money there, but don't you have to at least see what they’re doing right and wrong in order to compete?

Just curious…

MNB user Jeff Davis wrote:

Why is it so hard to rationalize the "closed Sunday" policy? Financially, how is Fareway doing? How about Ukrop's and Chick-fil-A? They also close on Sundays. For these companies, adhering to Biblical principles is part of their brand and a key ingredient of their success. These are strong, vibrant companies. If they changed direction and started to open their doors on Sundays, they would damage their brand and disappoint many of their loyal customers.

To follow up on your boxing analogy, it would be a low blow. And an unwise business decision.

Another MNB user chimed in:

There are many other successful retailers that are closed on Sunday, and are thriving successful. Just look at Ukrop's or Chic Fil A to name a few. They are observing and honoring the Sabbath day by keeping it holy (meaning no work). The fight analogy that you used is appropriate, but instead of "refusing to fight in the 7th and 14th rounds" they are actually resting up so they can have more fight in them during all the other rounds, and WIN.

Fareway is as successful as they are and able to expand in a downturn economy in part due to them honoring this principle.

I mistakenly identified the store as being in Rochester, Minnesota…and one MNB user corrected me:

You mentioned the new Fareway store this morning. The store is actually in Stewartville, MN, about ten miles south of Rochester. Locals are very excited, they have heard about Fareway's excellent meat departments and personal customer service. I spoke yesterday with three farmers, all from near Rochester, and we talked about the demise of the local grocery stores and local hardware stores. I got to give my sermonette on how "if you don't like your local hardware store stop shopping there, it will go away." They all nodded in agreement, having seen many local establishments on main street go away, leaving empty storefronts in their formerly vital down towns. The subtext of that is, you can't bitch about cans of peas being 13 cents cheaper at Wal Mart, and in the same breath complain about the Wal Mart store being too big or impersonal or whatever. I think small town consumers have realized that they have to actually shop at their main street stores if they want to keep main street, their town, even their culture, vital. How that plays out this dark, penny pinching winter, remains to be seen.

Still another MNB user wrote:

I just can't rationalize your thoughts on a retail food store closing on a Sunday. To me it doesn't matter, if I lived in Stewartville, which is where the store is located, I would jump at the chance after a year of no food store in my town (as I'm sure they are), not having to drive the 11 or 12 miles to Rochester to shop. To think I have an entire six days to shop right here in my own hometown, man that's great.

Sunday closings aren't popular I am sure. It decreases ones ability to "just run down to the store and pick-up that necessity", or drop by to pick up a basket of wings and bag of chips before the big game. Why not do that on Saturday or Friday, or stop by the local KFC and grab a bucket to go. I must admit I go the store on Sundays, but wouldn't have a problem if they closed.

It seems to me it might be easier on work schedules, everyone has Sunday off, lower store/chain Operating costs, perhaps more importantly reduce electricity usage and the Carbon footprint of the store. I don't see the problem. I suppose as an employee it might reduce my opportunity for overtime, or if I were a student looking for weekend work it might not be the best option. I think the positives outweigh the negatives.

I have worked with a small chain through the years, in Virginia, that closes on Sundays, called Ukrop's. Let me see, # 1 in the market, very forward thinking in their business, technically savvy and what many call leaders in the industry. Gee I'd back them in the ring anytime, I don't think they are throwing rounds by closing on Sunday. They seem to be holding their own and perhaps even beating the competition in the ring in which they box.

Cheers to Fareway for closing on Sundays.

Another MNB user wrote:

Not a churchgoer, but I was just pondering this very fact the other day: While growing up, ALL businesses in my town closed on Sundays - it was the norm. People also tended to work 40--45 hours a week.

Fast forward to now - I make calls from my car as I drive, and plan this into my work day/week. When necessary I work weekends, often, or at least part of each day, to keep up with the perpetual never ending "stuff" that "must get done".

CA is talking about banning all cell phone use. My business mind laments the loss of valuable 'talk time' but the rest of my is excited about having a break from the relentless perpetual drive towards 'accomplishment'.

From a sociological standpoint - staying open Sundays, what did we lose? Gain? in the process? Divorce, single households, single parents are the majority now over the "nuclear family". Could this be a result? I think so.

MNB user David Livingston wrote:

I doubt Fareway cares what you, me or anyone else thinks about their closed on Sundays policy. They are privately held and not too worried about the bottom line as long as they can continue to stay in business running stores as they see fit. Sales per square foot at these stores is well above average and they are managed in a very unconventional manner. The result is they are highly successful and I'm not going to question their methods.

And one MNB user critiqued my commentary this way:

This is written by someone that does not understand God’s law, we are to rest in Him on Sunday. God created the universe and all within it in six days and He even rested on the seventh day. Clearly this should teach us that we can do more in six days with Him than in seven days without Him. Regarding your comment of getting into the ring, if we want to win the fight, we cannot win if we step in the ring of our life alone.

Okay, that gives you a sense of the range of criticisms. This represents, by the way, about a third of the emails I got on just this subject

My response:

Okay. I’m a heathen. A pagan. Been called worse.

But to be fair here, I don't think I was criticizing Fareway for its “closed Sunday” policy. I was observing – and I continue to believe that this is true – that being closed one day a week can put a store at a competitive disadvantage. Now, if you have a lot of other differential advantages – and both Ukrop’s and Fareway do – then being closed on Sunday is a worthy trade-off.

To stretch the boxing metaphor a little, it doesn’t matter if you don't fight the seventh round if you score a knockout during the sixth round.

But I’ll stick to my guns on this. To suggest that being closed on Sunday, a day when a lot of people do their shopping because it might be the only day on which they can do it, has no competitive impact…well, that strikes me as naïve.

I also don’t believe that being open on Sunday is a sin, or a market of being a heathen.

So let me be clear about what I think is most interesting part of this discussion. What makes Fareway unique and competitive is not that it is closed on Sunday, but what it offers and does the other six days of the week.

And that’s what we really ought to be focusing on.


KC's View: