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When Nice N' Easy Grocery Shoppes Inc., based in Canastota, N.Y., and operating 75 stores, first started offering produce, it started off small: a bushel basket at the point-of-sale with a mixture of apples, oranges, pears, bananas, grapefruit, plums and peaches. Some stores even had one or two shelves in an open case with lettuce, cucumbers, celery, peppers and baby carrots.But when the company decided to take produce to the next level and offer more to its customers, the first step was to hire Sam Magari, formerly of PNC Food Markets, as the corporate produce manager.
"I started Thanksgiving week of 2004, and we set up our first expanded store in December," said Magari. "We just completed the seventh store [in April], and we are working on six more right now."
So what does "expanded" mean? More items and, of course, more space. "We are going in and expanding the section from one or two shelves to five, and in stores where there was nothing, we are adding produce tables — two or three Euro-style tables per store for the most part. But now all the stores will be expanded because they are not all big enough," explained Magari.
Aiming for maximum impact, Magari wanted the produce displays to be the first thing customers see when they enter the store. "We are putting them first in line when customers walk in the door like it is in a grocery store," he said.
The company has a variety of grocery stores in the area that it considers competitors, including PNC and Wegmans, and hopes the produce offering will give them an edge.
"We are trying to give people the opportunity to stop on their way home from work instead of going to a grocery store," said Magari. "They can pick up their produce for their salad or dinner, or even for the kids' lunch the next day. We are trying to meet that need."
Nice N' Easy tries to stay competitively priced with area grocery stores, and Magari personally visits competitors each week to see what they items they are carrying and the prices they are selling for.
"I have a listing, and I visit stores like PNC, Wegmans and Wal-Mart to compare prices," he said. "Sometimes we take a little less margin on items to stay competitive, but we do well, and sometimes we are priced better than the grocery stores."
In the expanded stores, produce sections range from 12 to 20 feet, and Euro tables up front can stretch 12 feet by 12 feet or 12 feet by 18 feet, depending on store size.
Produce items still include apples, oranges, pears and grapefruit, but the variety is larger and the amounts of each have increased. "Before, we may have had five bananas out, and now we put a case out at a time," said Magari.
The variety of fruits available includes grapes, strawberries, melons, cantaloupe, red and green apples, avocados, bananas, oranges, grapefruit, lemons, limes and kiwi. The stores also offer a variety of salad ingredients including iceberg lettuce, celery, cucumbers, carrots and peppers, as well as bag salads.
"We tried some plums and peaches, but they really didn't sell well for us," said Magari. "Bananas are the No. 1 selling item, which is the same as in a grocery store. Also, apples, oranges, grapes and tomatoes sell very well."
The company has approximately 45 different SKUs available from suppliers, but most stores offer around 27, Magari explained. And popular items are set up using baskets on the 4-foot-square Euro tables at the front of the store.
"We use wicker baskets as dividers to keep our presentations together, and depending on the size of the basket, we may put products together, like lemons, limes and kiwi in one 12-inch basket. But apples might get 12 inches by 4 feet by themselves," he said.
Items that need to be refrigerated are in cases in the back of the store, because the stores were not originally set up for produce, Magari explained. "We put up signage so people can see we carry the items in the back, and it takes a while for people to realize what we have to offer," he said. "It would be nice to have the refrigerated cases up front."
Since produce is not a large category for c-stores, it is difficult to get a large supplier to deliver to individual stores, Magari reported.
"A lot of our orders are only 75 to 100 pieces, and we don't buy a lot of case lots, except for items like bananas, oranges and Red Delicious apples," said Magari. "Other items we buy in pieces, like six lemons, limes and kiwi, or a dozen cucumbers, or five pounds of green peppers for a store. So we get them from wholesalers who service restaurants, food stands and some other c-stores like us."
Rather than a large chain supplier, the company deals with a variety of suppliers to service the different locations.
"It's challenging because we depend on the wholesaler, and if they are going through another wholesaler, rather then buying direct from California, we can lose two or three days of freshness compared to having our own warehouse," said Magari.
But freshness remains a top priority for the company, and Magari will go to any lengths to maintain that standard. "We insist on quality, and if it's not good, we send it back," said Magari.
The freshness factor of selling produce makes it a high-maintenance category for retailers, but since it's a small category, the challenge is scheduling employees to stay on top of the products.
"You need to take the time to go through the department every day and also throughout the day because what looks good in the morning may not look good by the end of the day," Magari noted. "The product should be picked up and examined. It's a hands-on job."
But since produce is not a full-time job, employees often have many other duties, such as handling the register or placing an order, and produce can easily fall through the cracks, Magari said. Retailers should schedule in a half-hour to an hour for produce department maintenance.
"Produce should be checked first thing in the morning, and anything that is outdated or spoiled should be thrown away," he explained. "Presentation and freshness is everything, and you want the department to look nice, have good eye appeal and have fresh product. What people perceive when they first come in will affect how they perceive the entire store, and the produce is right up front."
Training is a big part of the produce expansion, and employees are taught how often to order, what quantities and how displays should be set up in the stores. Magari trains the employees when the store is first set up with the expanded produce line, and the company is in the process of rolling out a formal training program.
"We train them on how things should be set up, how the apples and tomatoes should look and which direction they should be facing," said Magari. "We also teach them if they run out of an item, we don't want an empty space so they should always fill it with something to make it look as neat, full and presentable as possible. Also, they learn to look at the fruit and inspect for mold on containers of tomatoes or grapes, and how to see if apples are starting to decay or a fruit is in a soft condition."
Seeing a Return
As with any fresh food item, shrink or waste is a major concern, but Magari reports the amount of shrink in the beginning tends to get lower as employees learn the ropes.
"We have a shrink report done by hand at each store to record what is discarded," he said. " It's done daily and kept at the store so we can be alerted to any problems. Then we can adjust our displays or ordering."
Overall, the company sees produce as a worthwhile investment despite the high cost involved in much of the equipment. "It can be a costly investment," said Magari. "I've seen some of the competition with refrigerated cases that are very expensive. For us, the up front tables alone cost between $550 and $650 per table, and the produce scale we installed is more than $800 on its own."
However, the company is already seeing a return. "Our returns started at $100 a week, and now we are close to $400 a week," said Magari. "But produce takes a commitment to filling up the cases and having fresh product. You have to maintain quality, competitive pricing and eye appeal. I can't emphasize that enough." n