case

$.*\ .s n *,q S$*+;u::e*5*, & s l;e--'tr $$ \ ilS :g :rfu.uff ! s;-$:'"":r"!"i" v "flr {i;. a ft\" t__ "L _: Armand Cilinsky Jr. .\ u yy tt w,,t b forf*, { trrurlor"slr_r, n' rKrchard L. McCIjne

5 ape F cs s.e cisr* Sscfe {_,}rrirrsfirltr},

f,:i'li'il;ffi',:;j:'Fi:",:"j'rd;";'"#::5 [:'ffi;:ll whore Foods had recenrry er'cred ori- j:l l*:"r";i;;;';;,,r, co'sisring or. gr"u"ul?t it"r w"r^,rar,.it's'sales

lerritorv *t'n::110-*ilU.:, lowner) tnd lbrn scorr r".;::',":-^'l Jtcve Maass devclop."oi.,",l-"i]^:^1"-o't" attnounccd phrrs to had to decide *h., h.'i' . 1-':i':"' i'l ;;';;i

"

Yff l; i,:,i*fi :,t::1ifi:lXk[: I s10x opporrun't ;,,;;'#h';Jffi*:;'#;

'", ""."r,ii,i*:'$-*l"ii',ifr1il';:::'?XffiTT ;'5',#Tf:",;J,";:ll. cou,r,v. ";;;, c;.;; ;;; :T,',1,'ff::gj: ll# i"*:xJil',j:r'!;;::tr

ffi tutrwffi ffi 's ffi ff ffi Kffi $ryv i:*n:"',11",,;rt1di:lJ,'..1:"5il,l';:l'" rn re88' st;;;,frliver Maass purch,sed rhe rhen tlf:"n:, bv u; 8;;;;,ii1,",#ull,1,dlq ""T:::,:::::::*:*ii, ;5:*;:'""naltonal chairt" was..iting 3tt superrnark;;";,,;;; ;,;r, Iro,fc.r,,r irrnj;:;r;,,;i,;Jlr::l::'ji,il:; iT,,.|i'Jii;;-3,:i fli;;""i,,,i" "

i"""'r, .];::iliri; Itlj:{f : s orc ,,as n"." u"i* ih(,rc s j, s, no way tt"iilihri=:"ffi:n;;tril'# li'il*#ii}frl'#l*Hir*=il*,fl ,r'Jl,",r-{:j| [,i]:,.!i:lr,lbourro,"',,,,..",",',1, -Lfi',X;t.::1,,n il,r r,,,,gr,, u'i,i sr,u,.r,,o. r ,,.on_ tr#Ti{*Iiln il#":i:J::-.H,},"$;ttt trn:x,*11,i;$,{{;i*r'ffin'f:.;iijli]l:":l an estimateJ$i;,;;,";.;"";ff; ;*i ,1:l#'.:y,l*i .ri',i,,*,i ,*',,:,iil:ilff'.;,ii:''i::.'.ff:';i'S,i::T,..;*:i:{:E

'"J,';1" 'o i'$'illli's ro ti*ur'| "'' h"*i",,n,*. ,',.'' *,,.i

r'hr rhe new sirels;, ,,.lot not t.' prr'ch-ar" lra *,- it.. rhev' ;;l:'J.l,l",tu,',':"ll li.'1j.''i,in"y *"li;:; '.ii

iild,d oy r,ri,ii.,. ;;;l:,]"1.1:i,'1,1.:^o:1lliur

askc'lr * as ' wr'y *n,ru ;;,;;,'J -:,lli,ll:]|il;:i:l ' :itrilT,,r#;;Jj:ffiiJ:::X 8-.?,::ff ;|ffiJX?""1his'ew srore orivers *'.i",, *** n,, ;*x ;**"N*i",f:[ if i'f:#*tri ffi?J'iHf. fii]Li:{ix::ilJ'i'',Tif x*f3 tltese

'lvats, rria-er'ro"t, much of th. ti.--ttot"

for about the first fbur years,

f.lfrlqrl :uos b) \rmurrdcirjrr. ver's was orru'lt as a self:tt'rined booki<.ee;J;;i

. rrtr 'rne. Arl rislrrr resr,^eJ. 'lv 'rt:' J{)hn l\4,'orL'. rn(r Richrrd Stcve Mlrss*ul]1ld t

a Subchaple. t ""ri-",f".

p.esitlent lnd sr presidenl' and Ruth n""t l" "tt't-2g r.vu,\,Lrrr .rrru secrelar.y. They were co_owners.

Oliver's Markets 367

,ffi rit

John Moore ,3 {-t },t ts f }1 r { 51, I f*., {,,ryitr.{# :clft ,

Busirtess PolicY and StrategY

Oliver's added a deli in 1990, and an aisle of health foods in 1991. In 1994, the city of Cotati of-

i"r"d Steue and Ruth Maass a low-interest redevel- opment loan of $500,000' They used the tlouey to

.*p""4 by taking over the adjacent space and adding

an additional I 1;000 square feet, for a total of36'000

il;;; feet with abouf 28,000 square feet of selling space. Steve recalled:

At that time I decicled that, in cvery aisle' wc would

have the same things that Wholc Foods did' We

woulcl givc people a choicc in all their health lbods

and we *uuid intcgrate it thrtrughout the store''l"herc

isn't a scctitlt-t you can gtl to where you wtln't ltalc

a good sclection ol'organic or hcalth lbtlds and con-

ve-ntional. We didn't mirror Whclle Fclods so ttluch as

Wholc Foods did a wonclerful job tln health tirods'

and people werc going in there and buying it' Bt-tt we couldn't scll health tbods' The only reasou wc

coulcln't sell it was becattse we wcren't doing it well

enough. So, we learned hclw to clo it well enough' and

we did it everYwhere '

Oliver's opened a second store in Santa Rosa on

April 4, 2000, and thenceforth changed its natne to

Oiiver's Markets. Steve recalled:

Thc lanttlorcl camc to us' I wasn't really that interested in expanding at the tilne' It was a good cleal, as we didn't have to pay anything l'or thc

store. We considerecl hiring a nationally known retail architect' but decided that was too costly' so

*" lutt sort of designed it ourselves' Wo picked the

Case 2 Oliver's Markets

that Eva was extreurely stnart and quite

as a l'tltlsician and painter she was more

in Oliver's design and decor than in the side. She ha{ for exaurple, designed and new fixtures for a reu-rodeled gift departme

and Torn rvere both working to involve her

various aspects ofthe oPeratton' Exhibit 2 presents rnilestones in Oli

ln 2005, Oliver's begau a retlodel of its Cotati

store. Steve had hoped io invest $2 miilion in the

tit"oa"f , but uncertainty over the future of the lease

fo*.d hirn to scale back his plans He recounted' l'Ou. landlords wouldn't talk to us l couldn't even get a meeting going with them' I wanted t0 g€11'

colors ottt and figurcd out what wc wanted fbr a deli'

t thirrk thc tleli n'ls t() I lrllgc tlegrcc lashitlned afier Wootlluntls Mlrkct. thc hest litllc nlarkct I've seen'

Ith.r t"n y"-t on the lease so we could put a cou' pi"l"ili"i, dollars in here and.do. a really,goodjoh. b,ven with uiue years left on this lease we're putl

in $500,000, because otherwise we'll get down t0

sixth or seventh year and be in trouble'"

Steve himseif was ttow 59 years old and had

in the business siuce 1988' Ruth was ill with ca

t il;; and Ruth's only child, Eva,40' hadworked ti.. fot Oliver's for about four years, primarily ,lun .ootainator at the Cotati store' She had^u

p"ti-ti'". as needed- doing an.assorttnent ofj ,u.h

"s bookkeeper and gift buyer' Steve rel

c-29

:\!.

Sot

ln. stal cial sho soli pari stan verl item

FC UI\ Super retaift half < that d trends club sr and W of pre and far superlr due to and Int

I fc

tim stru

Lxfuihit ? Glossary of Supermarket Terms

kets' history. Olivert recellt track record

t

Oliver's Markets

f-j:r4 ",' lli s6g. I

c-30 ParI 2 Cases in Crafting and Executing Strategy

[.xbil:tit i Oliver's Markets, Milestones i.-.i:t#-;.=ri ii;il.ti ff ,Ji,,

tn Exhibits 3 and 4, containing 2000_2004 incomestatenents for the two oliver,JM";k";. ;;"'n'nu,,_ cial condition of Oliver'.s as. a consolidated entity isshown in Exhibit 5, prcsenting zoo: *j'ioi?'"on_ ::lli:o l* "ce. sh ee ts. nxhii t o pro,ial, 1.u,,, _

club stores, doilar stores, and drugstores. Such non_traditional retail ourlet, i"".;;;;"ilr"iJrrru.. orcotrsurners' fbod_at_home expenditures fi.om 17.7percent in l99g to 30.g p.r..nt i, ZOOJ. Acco.dingto rhe U.S. Deparrrnenr oiag.i"rttu..iiiiiol, ,rrai_tional rerailers'rnarket st are"aech.rea h"#SZ.: 0"._cent to 69.2 percent over the ,un "

p*.j.j^Wu,_n4ur, was both a driver and. a b.enefi.*ir^"f ifri, changein,shopping parterns; lts rhur. of ti.si'rup".,ru.t", sales reached l5 2 nercenr by 2003., ln ibO+, Wut_Marr ope'ed its firsi carifo.nia su;;;;,;;arking ll".

to:"ul I entry inro rfr" .ountrl,l,ror,'popuruu,state. By 2007, the nurnber of Wat_Ua.ir,io.r".nr_

ers nationwide was fbrecasr uv e:,urur'rii"o Grctcerto approach 2,000. translating inro "

3S j.ri"", ,frur.of lood store industry sares.r Union Bank orswitzer-land (tlBS) predicted rhat tradirjonal supemrarkets,share of food sales woutd d.";;;j';.."#or roou,as shown in Exhibit g.5

lood Prepared Away from Home

Food-ser.vice oor

""d r;;:rb;i ;;,' ;i.:"j.:5inc I u d in g res taurant s

o.r . o n, u,,.,.;' ffi ' il;:::, :?::Til;t, :H',:ilJ: lfowed that increas", i,, t our.t Ji",t".",rr.r, or.In part to tlte srowth of' dual_in.orrr. lrour"t otAr,had raised the ihare of food $;;;;;;';Jored roprepared lbods and rueals. By'2001. "f,o;_r.rui.. outlets accounred for 46.1 p"..;r;;;;it t:o"o?spena_ing. up tiorrr 45.4 Dercenr in 1990 uni'is;".n, i,,[980.u Accor.dins io ,a r qe i t" 2 o o r :ffi ff :::,irilJ 3,i{' :ffiff !;;:.["J;the fiaction of their fbod'budget ;;;;;;; itoa ,n

lris,on,of !li_ver's perlbrmance to selected industry Yj"ollo:

Exhibi t 7 provides .",,tn;;;;' "i"u,,_'s performance to industrywiA" ,tutirt,", ", i'r,ns, including labor and renr.

ry RETA|L|NG tN THE TED STATES

:rmarkets had become the dominant form of foodhr in rhe United States through; til;;;;d the 20th certury. bur by ln" "u.iu

;;;;i i:Tj?in',:]s \ins challenged uy nve ru4or.ls_ ( I ) the i,creas i'g- ao',., inu,i.. ;i ;;;J;:; :i:r::rl9

discounr supercenters such as Cosrco

lis,arn s clubs. (2) incleasecl purchases

rooos away lrorn holne in restaurarrts I outlets, (3) chronic overcapacity in the industry. (4) changing shopping po,,.rn,

the emergence of ..life"style,, f;;J il;;;;;; :^T:j.9:ll*'l services, and (5) hish;; l.b";particularly for chains ir,ut-rruj ; X;t;#;

Supermarkets to a growing number of price-sensitive

ed custolners, traditional supermar_ to protect their uurket ,t u."'uguir,rt

supercenters or ..hypennarkets,,, *ur"tot.,r.

-sg70 * I I

Business Policy and Strategy

F.s&ld;rf ..i Oliver's Markets' Five-Year lncome Statements, 2000-2004-Cotati Store

Oliver,s Markets

Store &"rr,*il.,rr 4

3l"T;: T: ::"1i" x';;H;,,*ffi e s ta te m e n ts,-Santa

ffi

Markets lnc.

ffi ffi Business PolicY and StrategY

Case 2 Oliver's Markets

{.xhibit .$ oriver,s Markets, consoridated Barance sheets, 2003-2004

::.r4::::#=lii; j

c-33

$;#;i*{":t$f$1 ')ii:+l::iJLrr::rr);i::;i'll-l

i,r-rili:.ilii:iflli. i!

;RW

ffi-"#;;'':.$'d'd:#ffidjj:::.jlffi'$i$ffiTtrTi.'', :j ij trffi;,j, ;ffii ,'ffiiffi

*ffit' :t'tffiu'*='##ffiffiffi:ryFry+j'"'-.'i;;ffi,,-j...'# :i{ffijit{iiiiiriiffil :' :' ffi

tt#ffi.-f=$++ru##

,**fll l,ru

flfrffiffiiruir;iu'; i' {*l# ;' i; ;.,',-,r

ffiFt so$tg,boe;,;-.:1.: {

Source: Oliver's Markets lnc'

Oliver's Markets

c-3.t Part 2 Cases in Crafting and Executing Strategy

f : : : i3;,7 * * ",,u o,o"", rkets tigures: supplied by Oliver,s, for fiscal

Exffi{pit Z Otiver oo"r"i#%::[, itfil' National Avera ge superma rket

F'xtuibir {i flffi1;H::50[?"' Nationar Average supermarket

Service, Juty 2004, p. 16.

rllness eo[J and stllteov

be prepared at home from 62 percent to 59 percent, translating into a reduction ofover $7 billion ayear in food spending at retail outlets.T

Industry Overcapacity Declining market share combined with growing store counts contributed to poor year-on-year com- parable store sales growth results for the major super- market chains. Many food retailers struggled with comparable store sales that ha{ at best, increased by I to 2 percent and, in some cases, decreased. Exhibit 9 presents 2000-2004 financial results for several national chains. With a net increase of 411 supermar- kets in 2004, many industry analysts considered the industry to be at overcapacity.8

Changing Shopping Patterns Nearly one-third (31 percent) ofhouseholds shopped in 29 or more retailers or retail channels per year.e Due to increased competition from nontraditional food retailers, supermarkets suffered from a decline in shopping trips. In 1999, the average household made 83 trips to supermarkets; by 2004, that statis- tic had fallen to 69 trips, as shown in Exhibit 10.

Early in 2005, household penetration of super- markets was below 100 percent for the first time in recent memory. One percent of shoppers, over a

Case 2 0liver's Markets

fi"E#l&ir,9 Traditional Supermarket Share of U.S. Retail Food Dollars 1995-2006 (estimated)

ASY" A4Yo A3yo Alyo

1995 1996 1997 1998 1999 2000 2001 2002 2003E 20o4E 2005E 2006E

Source: Progressive Grocer, Aptil2005, p.62.

period of a year, had found that they could live with' out visiting a supermarket. That is, a tiny minority of consumers acquired all their food for home prepara' tion without visiting a traditional supermarket. They did this by shopping at warehouse club stores, su- percenters, dollar stores, and niche operators suchas Trader Joe's. Some also shopped over the Internet, but the demise of Webvan and the sale of Peapod had largely left this market to traditional retailers, with perhaps the sole exception of FreshDirect,arapt growing Internet-based delivery service in New City. Although many chains offered Intemet ping, Albertson's advertisements proclaimed that was the largest Internet grocery provider in terms geographic reach.

Inbor Costs Many traditional supermarkets faced another cle-higher labor costs-in their attempts to with Wal-Mart, Costco, and other nontraditional retailers. The higher labor costs were due to the that traditional retailers were predominantly shops. Three major Southern California chains, Safeway, Albertson's, and Kroger's prolonged costly dispute with unionized March 2004.t0

The food retailing industry in Sonoma and throughout northern California prior

Oliver's Markets

$:n&l{.:sr 9 Food Retail chain store Financial statistics, 2ooo-2o04 ($ figures are in millions and include international operations)

I Safeway opened 34 "Lifestyle" stores in 2oo3 and remodeled 108 stores to the format by the end ol that year. 2 Kroger Co. includes advertising expense in cost of goods sold. 3 comp store sares for 2003 were down 0.1% ror stores not affected by southern cA strike.acostco includes membership sales in total revenue; data also includes all products, not just supermarket items.5Whole Foods includes occupancy expense in cost of goods sold. 6Comp store sales figures are for u.s. stores only; other figures include all products, not just supermarket items. sources: Annual'reports as found on company web sites and the u.s. securities and Exchange commission,s web site. c-36

Business Policy and Strategy

$"."v/rid;ir ?$

Case 2 Oliver's Markets

Shopping Trip and Basket Size Statistics

c-37

ril:

ffi

r rm

.-

2J ,,,13.

11 jls u,

.t ';

$tt j'

* lncludes Kmart, Target, and Wal-Mart supercenters. Source: Progressive Grocer, April 2005, p.60.

appeared to rnirror the national scene with one rnajor exception-the absence of Wal-Mart supercenters. Exhibit I I shows store counts and estirnated sales for selected retailers. In 2003, Safeway was the nurnber one food retailer in Sonorna County; Oliver's ranked ninth in sales (Exhibit l2). I

OLIVER'S STORE OPERATIONS

Oliver's flagship operation in Cotati was one part traditional superrnarket, one part natural foods store, and one part gourmet foods store. The main entrance led directly into the health and beauty aids (HABA)

area of the store, which featured vitamins. homeo pathic treatrnents, essential oils, and other HABA products. The department hired an i therapist four evenings a week to do rnassages. TQ placement and size of the department gave the sl its predorninant feel as a natural foods retailer. virtually every area ofthe store, shoppers could natural products, including organic baby food, ganic spices, and organic pet food,

Gounnet foods were also in abundance. ln 2005, Oliver's was one of just six retailen honored with an Outstanding RetailerAward National Association for the Specialty Food Oliver's had 108 stock-keeping units of oli ranging lrorn a l7-ounce bottle of Star Extra

+e ;l 'l2i '., l

;56i,;, t*:;j ir .P"" '':4

?}: :1,,.

for $3.79, to a l0l-ounce tin of Spectrum

Oliver's Markets

Part 2 Cases in Crafting and Executing Strategy

t-..t'ftihit t I Store Counts and Estirn,* *tn.i" c.iiir,li;Tffi,;:,*;$::!j3f,,

.o;1li::;fi;;:,i|1:;:l''Ied ror $35 8e rhe srore s E'gla,rd. i,;1;.";;;;;:1u1e{ theescs irtrported riorrr u,rrh u,,s)?]qs'0.,i o';rio

.0" j,l?lJ"li .*nas good c'eese in rhis ur", uni'l,.i. 01,,,, u

;r1'ffi': 1,:i",9 on,,.*',.*Effiffiffretairers(May200s)"il;,;,;r"H;;,1T"::;.t":::::;Eo,*onn

phenornenal busilrcssg22apound-r.,:::.]tl,good cheese" I rnean $2 l.$22 a pound. ut,a *. "r,11'

6vuu cocsSs' I rncan $2 I . that's coin,, rn rr,r,,Lr .

thtresotneone for$50an hourthat s going to auroi"-""'wowrrr€orle ror$50anhour

sne.s uniore eh^r,._L ^.<rur cheese business, becauseshes unique

"nourt'ir""r Lrtccse Duslness' hecause

cncese deD..rrr'ro,,r ,.- 'j l " re unique elrough...Thecheese depa.t'rerri r" i",r,, ilj'Tii iffilfiir.#;{:x!:ihit tZ Sonoma County Retail Food Sal

Hl#ii:::'^1il:ffi 3,#3t";,,r*",,..,,,,';,!,:,*r*,"**,;ffi ff ," o"rX1l""rr!'.1'*to,l'l,u"o,uottn""9311"o9r;;;";;; companies in sono,"u county n" u,.'"'.fi,Tfffifli :,"1:3:?f:i:;:[i,:l;;ffi::..;;;y,,

ffi Ki#

Business Policy and StrategY

in sales per week. The store also featured a 3,000-

square-foot wine department tluq* with two frit-tim" employees every day and a biweekly wine tasting. Wine buyer Renay Santero said

On a good day, we'll do $16,000 in wine' The wine

hstinf is most beneficial to the customer' Because I have in on-site license, I get every restaurant wine' What makes me a little dift'erent is that I get wines that other Places cannot get.

The deli included a taqueria, a salad bar, and an

inside seating area. Tom sai4 "When Safeway took

out their salad bar, we put one in'" The deli bene-

fited from a front-end cold case used to sell Oliver's

branded take-and-heat entr6es, such as beef stroga-

noffand vegetarian lasagna, which were produced in

the kitchen of the deli in the Santa Rosa store'

Deli manager Roxanne "Rochr" Abruzzo sai{ "It's the closest to homemade you're going to get

without takeout . . . We do an easy $1,000 a daf' The sushi bar located next to the deli was contracted

to an outside vendor' AFC, and Oliver's received 25 percent of the gross sales as profit' The bakery featured gourmet store-baked desserts and a cof- fee bar that served mochas and lattes in addition to

brewed organic coffees. Produce included a large

organics section, and the department tried to source

us"mrrch local produce as possible' The full-service

meat department carried lamb, veal, and buffalo in

addition to three grades of beef' Tom stated, "We feel

that we need to have a better quality of meat ' ' ' It's

the same in produce. They're told to buy the best and

charge whaf they have to get for it ' ' ' lo., having a steaithat's twici the price of our competition is kind

of a way of doing business in the summer here' This

is a sectndaty thop for a lot of people in this neigh-

borhood. They'll do their pantry loading at Costco

or FoodMaxr and come here and buy their perish-

ables." As evidence of this, Oliver's experienced a

significant increase in sales during the 2004 holi- diys, jumping from an average of abo-ut $369,000 p"i *e"k to $525,000 the week before Christmas'

Oliver's Ssnta Rosa While the layout of the Cotati store provided an "or-

ganic, health foods store" feel, the size and design of the Santa Rosa store provided more of an upscale' gourmet market ambience' The most significant dif-

i"r"nr" between the two stores was size, as the Santa Rosa store occupied only 22,000 square feet with

17,500 in selling space. In 2004, Oliver's opened a

5,000-square-foot warehouse to alleviate space con-

straints in Santa Rosa. The other significant differ- ence was the focus on food service, bakery, deli, and

taqueria, which ran almost the entire length of the

teft-hand wall. Tom stated "The customers at the

Santa Rosa store have the disposable income to just

basically ask us to cook for them'"

Marketing StrategY

Case 2 Oliver's Markets

in line with Oliver's overall strategy, they focus more on uniqueness and quality than on

Wine department manager Renay Santero

"We've considered adjusting our margins to be

competitive. What makes sense to meis to turn

ple on to something that maybe nobody else

a hold of." Tom stated that Oliver's price strategy

c-39

Pricing In 2002, Oliver's changed its prictng strategy to a program that involved setting its mer-

chand-iie at piices relative to Safeway's, chosen be-

cause it wai the dominant supermarket retailer in Sonoma County. Safeway was a traditional "hi-lo"

retailer, meaning that low ad prices were used to off-

set high regulai prices. For example, in early May

2005,-Safeway advertised Clorox bleach for $l'00

when the regular retail was $2.59' Safeway was able

to do this by negotiating special deals with its sup-

pliers for ad petiodt. Oliver's set its everyday prices

on traditional grocery items approximately 8 to 10

percent below Safeway's prices, having determined

ihat being below Safeway by that amount provided

acceptable margins while providing value to custom'

ers. ^similarly,

pricing in the natural foods depart- ment was rnuittiuin.d ut just below the prices found

at Whole Foods. Oliver's management considered the

Whole Foods store in Santa Rosa to be its primary

competitor in that market. Point-of-sale (POS) coor'

dinator Laurie Tirxhorn reflected' "[Our pricing strat'

egyl has proven to be really good to us' When I fint

tJot ou"i this department and started doing print' outs, we were so out of line. It was incredible much lower we were." Department managers

responsible for setting prices in perishables d

ments such as deli, bakery' meat and produce'

were given a gross margin goal as part. ofthe

get pr-ocess and priced products to attain that.

try to communicate value amidst the percel quality. We don't have a problem selling thei

Oliver's Markets

c-40 Part 2 Cases in Crafting and Executing Strategy

We have a program that Tom stafted a while backca'ed the "stapres program" where he compares ourprices ro Sar.cwav r.or eueryoay i;;;; ;il'as Tide,Nabisco cracke.s. thrngs like thal. We just want roshow thc customer card going ;;; ;.ll:' ;ffi " J::[:1" ff:.HJ,'",:ieveryday items. Sleve expressed h.

m€ssases oriver,s il; "br" *ffi #::, ",ff #;.r1"We have all these oril ffi *: # :?d; ;yi l!',',:ff .:

u

;.'",fi I' i; quality focused."

* I out whether we are price or

,9,1.,.],..:r, private Label Oliver,s had a smallpnvate-tabel program that,includeJ

",Ln-,iJr*',""r,andJurces. The rake_and_rr.ut "nire.r'?1"," ii" o",iatso carried the oliver.s trb.i."i;;';;:l::,r0.,

program was generallv used as a way to o".or;ai "urr.to their cusrom.r, ,.urh". ,r,un u, u',*l1i,l"ol,T,o ,n"Oliver's brand; there we

expand the private-label ;e ro Rlans to significantly

Customer Service ori,,o".. ^-;i^r .. ,^*ilingr.rr,""on',"ttn", oliver s prided itsel I on its q,rr,ra. e..*iil;"";i#J product a customer re-

our product is better. ,: ,.r, to do that in a way thatallows customers to fl rom admittea ,nu, ni, 'l'l'13: ll"{'"

getting value'"

municated *"ri . ;,ffi:13 :ffi,:f;I, H;"",.,,JH;perceived ro have hieher p.i.*i;;;'iliJ,i,rr. n. :lt""d that rypical !on.u..r, could not believerhar an apparentrv unscare ,*o-r,# ini.p.na.ntcould have lower nrices rhan ; ;;j;r'.ili,ln ,,or. fir1,,f

chain srore.s clear advantagJJln ..inorni.,

Most stores look at hor Item to determr'ne ir rnl Iu?

turns they get on an

Y.:.li:::l J; i;: ;#.1::il'j#"::ll T;;ij"i,we re going to have ir , r,u, p"i pi

"".r; r r. rir. _,

"'j.ljr!,-il,ff ,,hBlil;woyl.d have ir. you ,orld... r,.. noiit., i;;;J;:"0 ::-'i,t^il" overall picture . . . lt,s nor wherher rharone ltem sells well. it,s the store. what it adds to the rest of

t,o..r"l:-0.,1 special_requesr kiosk against rhepro-motion oliver,s also offered a weekly ad- front wall near the.fr".t_oui."un,.rr.

Tom noted:an In-store flyer featuring iterns ,, n" ,no." ,ii" it wc werc rhe firsr srore arourrd hrpercenl above cosl and t-empora" t.t". ,.*rffi; vitamin warer. we're arways ,n,-'" to carry claceau

ffiffiii'iiffiq#'1;,yiff;rTi{i ffinltqtrllriil:ffi,f;fi:*#{ ;TX.:T

o"i::*frJ'-1"r'oi'::, i" '"":o-'.]t,|':ff flffi' j,?*,:*,"i,. "ii*"'ffi0,",".,,-"0",i,;io,t:,orj*,;;#:::lliil?J#j^r"Kil,',u0". -'-u iors on wedne'auv, u.ro.e +:bop.m. il;;J"o';l; Missiott and curturesrore was quire successlul with il; ;,o!r"',,,Its proximity 1o an affluen, ."";^, ^"^1:"11ii' u1t.to oliver's mismont rnzoo+, ori,J.;i:1,^:.lr-:.il;ffih# ;'j'#T"ril:fiJ,:i",T::h,:Jr'1,,i,?l,#l;Jil mfSyj"":#,.;i:.#ffT:I;:[::il']ff ,.:tr J l,l,i.,o,', avairabre ro.,,proy".,',"iiiJ_

Our mission is I with the On.r, ,o

provide the communities we serve ,frirt"O"n".r"".O*rocery

srore in the marketplace. To ruir-o,.n."o"Ju'.T:!:'.'.'.'"'L?J: jf.:i;;*.tl We carry the Ia conventionar ."ntt::-l.,*i

ble .selecti on of natural,

1'"ggr'.,ic*i'1r1::11,:;""1:T.Y:,:;iT.,Tjbuying rocary wherer., ;.;,;;. 1; lilo rtriu. toprovide merchan that we can ofl'er:]:: "-'

the lowest possible cost so fair price. *" ,.",ua'ut

to our customers and maintain

own home ,"0 ri:-tj:h:ustomer like a guest in our

nec t1gi.o1 s ."",, ; ;:: ;:'; ff -j,

ff : :: s tomer's ex-

We believe tl tive ro work. t jl,l1":tployees work to live' not a n d c rca r i v i r y . il:l ;',1: m',il Hiili::,',,:J : I : :lLil:lffi:i'firt emprovees r"-"'"',r*i goars bv ,p..i.ri.r,"jl;;';ff:;_il||.,ifij, packages and

,n" ."r#lirlls commifted to playing an acrive rote in

and ci vic s."; ;;51ii$ jJilil:Tii ::#::necds liom the local neighhorhoo<l --. "r ,,rr Oliver,s offered a

ronrnenl. Most emorol'it^l'l' reJalgd shopping envr-

wore ut u e i elnr'.rio' "Illt: ^tn cl ud ing ma na gem enl.

3ff *:li*fi:,:I1 l{ 8i'i:l{,'.[ij ",*,1 ;l;:

l ,ry, +-

Business Policy and Strategy

Employees played classic rock-and-roll on the in- store compact disc systeln.

Human Resources Department lnanagers ran their departrnents as if they were independent businesses. Tom stated that the perforrnance of the individual departments, and of the company as a whole, lvas driven very rnuch by the nranagers'individual personalities. Each was given the autonorny to decide what products to carry and how to price thern. Each was expected to look for innovative ways to grow his or her de- partment and to enhance the store's position in the tnarket. Renay, fonnerly a Lucky's rnanager, said, "There's a lot of autonorny. They allow us to do what we think is best for the store. We negotiate price. We set our own prices. We have our own business plans. It's not like working in a chain where I was told rvhat to do."

Rocky, a veteran of 22 yeats as a deli rnanager with Safeway, agreed: "There, I was just the most experienced clerk in the departrlent. Here, it's like the Safeway corporate job and the deli uranagerjob all tied into one. It enables me to use rny brain, aud still get behind the counter and help custorners."

Oliver's maintained department-level fiscal accountability by requiring departrnent managers to turn in financial statements every week. The department lnanagers reported figures on cost of sales, labor, gross rnargin, and supplies to their store managers. The accounting departrnent generated rnonthly statentents, which were cornpared to the departments' weekly statements. All departnrents that sold perishable products were inventoried twice per year, as opposed to the industry standard of rnonthly iuventories. Early in 2005, Tom put the cheese department in Cotati on amonthly ir.rventory schedule and reiterated his preference that all departnients selling perishable itetns conduct inventory as often.

Tom, 46, in addition to being general rranager, was the uranager of the Cotati Oliver s. Eric Meuse, 32, had started with Oliver's as a courtesy clerk in 1989. He had worked his way up through grocery management; Steve had prouroted him to store managet when Oliver's expanded into Santa Rosa. Tom and Eric functioned as business coaches for the departrnent managers. This was a role that had evolved over time, and it had been facilitated by the developmer.rt of the employment contracts for departrnent lnanagers. Tom and Eric were able to

Case 2 0liver's Markets c-4r

approach issues as l.nentors. sharing their observations in temrs that related to the tuanager's contract and potential bonus. They helped thern to reach goals. rather than ordering ther.n to do specific things. The coaching role was considered successful. first of all, to the extent that financial goals were achieved. The second l'neasure was the professional growth of the departrnellt lltallagers in tenns of their busincss aculnen and their leadership of their own crews. Renay cormnentecl "It's like f'arnily. They're dedicated to helping rne with nry career."

Rocky amplified this view, stating with a grin, "l always tell Torn, lny worst day here is better than my best day at Safeway."

Eric noted, "The fun part about Oliver's is that we all set the standards. Everyone works as a team in creating the vision fbr Oliver's. 'fogether, we de- cide which road we're going to take. Everybody has a little bit of say in it."

Torn agreed: "Ultirnately, I think, we find good places in that tension, in that sort of give and take between all of us here."

As store lnallagers, Tom and Eric had respon- sibility for tracking finaucial perfornance and for rnaintaining Oliverl standards in such areas as mer- chandising, custolner service and cleanliness. In conjunction with their departrnent heads, the two store lranagers oversaw all hurnan resource func- tions.

-[hey were responsible for recruiting, training,

and evaluating all employees. Whenever possible, Oliver's prornoted fiom within. According to Tom, "There's a certain cultural learning curve in com- ing to work for us. Guys who come fiom the chain stores have a real problern with the entrepreneurial nature." lbn stated that all departnent managers in Santa Rosa had been pror.noted frorn within, and he estimated that this was alscl true of over 70 percent of the rrrunagels in Colati.

The key colrpollent of Oliver's hurnan resoffco prograr.n was its use of an employment contract all deparhnent managers. Oliver's had been usi these contracts since about 1998. Torn sai4 "lt's thing to say, 'If you hit this nurnber, I'll giveyou rnuch money,' but the ritual of signing the has power to it." The contracts spelled out requi hours, personal time ofl, holidays, and Company managenlent structured the bonuses to address the needs of the individual they fit in with overall strategy. The primary in the bonus calculation was net profit

(

s

t

tt

tt

prc tak pec thar

Prar coll sufl Ros rate fron The ata Torn prog Olivr progj the r famil at thr not fi profe consu

The Torn's do tas from l respon

fl N

tc

gr

U to pe

thi ab ho AS

we

defined as sales minus cost of goods and

Oliver's Markets

Part 2 Cases in Crafting and Executing Strategy

ln; ?j': j:::,r,.:'-:-:e;' ;;;ll ff T#il:J 1 e rates had since co,ne d";; ';,;';#iliJ';T ,TfiI',.jiff1i11 1',,n,s"' ,' i"i.,, -.i",',",.liJJ;a J0 percent prernium

"".;';;:.;'j.",'^::-1" t'1,, ro ranra ltosa whcn t .ur. .tn*,, t...1

r1l ?lso cire, rhA -^^r - .)ver industry standards. a .^^^_.

operating expenses, including labor. Othe lllh " inveritory.onrror. werc also;n",r01.^3.tto,tt' lor negotiaring rhenr wirh Sre, "" Hff::T:m:,:"jnl iii:1',f :::u

ded j n'lh e :::,11 ;T1"'

; "; ;; ; ; ;;JJ',:';.1;il;';:#::: to nrake this. If vou r en a y t;; ffi;;Jffi";;ilill :::Tl i"i1#*?ti=tl,J,[Ir]i;:l*i]:-,ffi o.,,l,iil,t,,ir#i,iJli1-'""g",,,". save oriver.s ffi;:i :::p r,oxev to,n'JJnao,s ro supporr ad-Nonn"rricol,i"i",i'lllt're' ln a rvpiial unionized ;#:;""jt:1" advertising durrng rhe horidays.ropscare,;;;'i,f:fil::ffi;fii,:::n::::fd ;;; ;ffi.an additionar $2s.000:$io.boo i"n'", groceryclerk.. in.iraingcheckers.,uu6";u"r?lyll1n ruinifg'ril"

rorn was also resnonsible lor ;;;;;: Unlon stores were als to urr .o,,r",;;;Ji:"fi:,,;."1-';r:il,,.:F|,}fi:

tttit*lraining ';nateriars H' 'pok' ub"'i1;; per week and to all or,r',,,z+r,*.J ;i6iJ:i:,';*l$"::l-.",:m:"it :T:il:{:.,:i,,'"!'dfff',Tf,i'n'

anccs'lor o'| 'lhc

ffi1t,il:',"ff'll'U't, *'r'i.,.. lii; ;: rd' il::i l Y'''u:u " ;;iil;;Xll'{5ffi as onry ernproyees *h,.r.o,n,uogirionui

;;;:].:,0" ;l;':- j:::i,i:lrilnil:iX{r5. whirc w.rkins wee[r1er'.rigiur. d;""#lf1#;;ffllTff illJ;::i::i:1'''i ''*'s.,"'i .,"-,.o ., ;ffi;;

r"ii,"n#r," "i"d"d ,,,o.e herp with hurnan ;fr.:,: *j:l':l:l:i:'[i;.'i:J.:n]*f j{*:

1itlii:Jli!:, ;1"'?:"u ir *" r'ui

"' i.0,..,"0 in Sa' Raraer in reus rll;:;;.1::,';:,ilj:lili#; take care

"i;i;; ;;:rr"t the rwo srores. th"v.oriJ truc r. rack o'autrir

"-;";;";..:1, re8e. r bcca'repeople we il;i;;:,';"uutt *t have. such ui rririne I ntintrrity_.wner and .u,,,.uir,-" ,n," Monrcciro Mar_

triil:J."'x.ll"xfuir*Td.1i*Tdlt.':[ ll;:Ti,#:tiifilt ilru,ty"tl#[ :ffiJ::T1tr"';;:-1i:J:{tlf!*i;"i-,xi il.#ij,yir'!ii;:;:: l;it:,*.riTt,iil:.i"i Rosa sror.e ;;;;; ;;'ij "'"t

irt the vear the Sanla ;;"r';;#'n-re and ran ir rbr rh,' ,'r', n". ,"],i. i iliffi;;ir'il",l:l;ni:I*ffi;frl ilr#t#l:xli$:fi'il'ir'ffi1;*i,l: lherates hcrr oi-^.- ^^ nillion in one v.'*t',i,n.. pronrored,,.t:lll,::.'.''|_9 we've been,r"i"t. rri.'*r,

c-42

also cited thl need ," ir. -' r'uurtly standards.

'0m, esoecialr\/ ;h rL^ - 'pt:1t oliver's training tso ctted the need ro irnnrov"

^-,;,i^-^ill"."'."t A recenr gradr

r, .rp".iuirf i;;. i;'j'""' oliver s trainins s needed to devernn

at deparrrnenr, wherl ;"f:i'*il;fu:ff,Hl"T"yf,t"Tfl:::,fiIers needed to deveror ---r-""twttt' Wrl€r€ volved in ail asoed"'^i"^^^l',1-'":tn olrectly in- ram if ir *ur'io;;:f -r1s own apprenrice ,,o... ;n"inl",.:iftt: of opening rhe sanru horu store. rr,rosi utit;;;;"|::^"-union rhroughout ,rr. n""".lrl ;;fl :,":" rernodet. and perrorrninj ly.shops;; ;;;;;",were trained eithir in acquisirions.

rysrs fbr tlte potential new srore 0 local unio, ,--^-, t^,," apprentice program Tonr ooo,,,*--, ,,

,1:,l;l :#:: t::"t n"il ;,:ffi il", [T"*T,T I: i ji i{i:J J::'i "ilt, T,*";; ; ffi fl I s::i::: :r :x'.1: i:' ix ffi"J :.1,: :il', i,:#t?eSStOnal nnA in.t^^s;sional and instead ;;;r' ""'^ rur a 4u-hour storerrunug..unjl -'" "'""tu oe replaced as Cotati

Itrng firrn. :ourced training to a generar rnanaser ^::

::Y up to functio' solely asrug nrm. - "*"'rr5 ru ii general rnanager. Due f.,;;i,_: rurruuorl solery as

"r rri, a",i", t;

#:: to the tirne-consuming narure

General Manager's Rote'""'[JHgiH;:,T-t**!j'*':,f:i'*:#:l: role as senerrl ,-"-.1^- ful in his role oo .,^-ltl Ht felt that he was success-role as general rnanager ren,,;ra.r L:-^- ful in his role as r;;t"

rrv rsrr trlal ne was success- s beyond rhat of "r^*l*l-ltQuired

hirn to rnanaser d,,tio" .,,r.^-e^lt:nug"T but that his generalks beyond that of ,,o."-'' ts9urICU nlln [o

Eric and ,r,,. J.pr.*".;,'1T,1::"wirh input[:[iT:rT,ilHllXl,y..": r',n'i,oiT rn€naser duries surrer"a r'o'iir,Jl";ilff::T1

to, *, t n! u i ;:;;1il:ff;:,?* X; *fri.i"ffiai,:il':,:11';;'n*Xii}.:t:;

Nevertheless, Tom expressed some frustration stemming from his unceriainty about what ,lirec_ tion Steve wanted to take Oliver,s for the loig term.If Steve wanted to own Oliver,s for 20 more years, then Tom rhought he. was doing the ,ighi tlrlrrgs.If he wanted to sell in five y.uir, tt.y?eded tomake some changes. At the same timl,

-io_ *u.

comfortable with the level of ,up".ui.io.r- he re_ceived noting that ..Steve is very !"n.rorr.-. . . H"knows when to be involved u"ar,vnlrr;;;.,,

THE EXPANSION

Case 2 Oliver's Markets

could buy into the company and become a mi

in running the lamily business, Steve

and Domino's pizza.Therewas also a Chinese restau_ rant, a Mexican restaurant, a hair salon, a mail center, and a bank.

. Kroger's had decided to put two Bell Markets in Novato up for sale. Oliver's -unug._";, was in_terested in the South Novato Boulevald site becauseit had a very favorable lease una U..uur.li *u, tt, southernmost store in central Novato, meaning that approximately half the population would have to gopast that store to get to iis competitors. Estimated market rate rent for this location *u, uboutl+iO,OOO per year. This Bell Market was located in a center considered tiny by comparison to the Viniage OaksMall that housed Costco across the freeway;itiil, the site housed the only post office i, f.f"ruto. ji ufro frr_tlred a1 Ace hardware, a bicycle shop, and u.oupt, of small restaurants.

c-43

DECtStoN

_In weighing the decision to bid on one or both

Kroger-owned supermarkets, Steve a.rd Tom "om_piled demographic data and financial data for each lo_

cation. Tom explained Oliver,s site_selection criteria: We are looking for existing buildings with older leases that are renting below current "market value. We look fbr an area that is growing in population with at least 10,000 households makin'g over $75,000per year, with at least 25 percent of ihe population having had college educations, all within aihree-mile radius. An important criterion is the absence of Whole Foods within the trade area as they appeal directly to j!3 same demographic. We do noi cunently carer to Hispanic shoppers. which could be an issue fbr the proposed Stony point Road (Santa Rosa) location.

Tom estimated that they would need to invest approximately $2 million in each store to makeit an Oliver's Market. Exhibit f : pr"r"ni. selected demographic data for the Oliver,s tvtu.t

"t. in Co_tati and Santa Rosa, Exhibit 14 presents

"o_puru_tive demographic data for the Suntu no.u'Ralph,s supermarket and Novato Bell Market, and Exhibit 15 summarizes information about exisiing and poten_ tial competitors in each location.

Kroger's Santa Rosa supermarket, Ralph,s, was a traditional market, with OeU, bakery, dry and fro_ zen gr,ocery, produce, meat, and liquor seciions. .fom thought that he could run the storeln it.

"u.r"nt "o.r_dition.^incorporating natural u"a org*i" ;i"_r, una De prohtable. He estimated that the market rate rent for this site would be about $360,000 p", f"u.. nufpfrtwas located in a center that was fuliy occufl"a ana that had more than 20

.other Uu.in".r"r, i""iuding aLongs'Drugs, Radio Shack, Carl,s f.., ipC, SuU*uy

Oliver's Futare

,t..r:: :"0 Tom had previously considered expand_mg_to three stores, even making an offer on oni, but nothing had come of these bids.'Steve statJ unequiv- ocally that he would not open a third store on his own. He was interested in the possibility, however, ir.u^, it would provide the opportunity to'explore

-s'ome

sortot ownershrp position for Tom. Tom,s future was a concern to Steve. He was comfortable with Tom,s leadership style and with his decision ..ti"g.'Hl frf, that he and Tom were very much alike and ihat Ton ran Oliver's Markets the way he, Steve, woutd run if That allowed Steve to be as involvea u, n" *antrO U be, with no particular day_to_day,.roonribiti"."

, Steve felt that his days of working OO to &

hours per week were past ind aamittea irat he uncertain what he would do if Tom left t0 ;u something else. He stated that perhaps then itl be time to sell. If Oliver's

"rp."dr,i h;r".r,

partner; Tom would also relinquish his positir store manager and function ,oGly u, general i ager. Steve was nervous about the decis]on to either (or both) supermarkets, and debated rl or not Oliver's should expand at all. Also, as hi was ill and his daughter was not actively tn{

perhaps a new. expansion initiative mightprr rmpetus for him to begin to step asije and allow his trusted g"n.*l rnunugi.,Ibr,,; and eventually take over the 6usiness.'St

(Continued on

Part2 Cases in Crafting and Executing Strategy

Oliver's Markets W F.:s#al.lra f -3 Selected Demographic Data for Oliver,sMarkets, Cotatilnd Santa Rosa

Case 2 Oliver's Markets

t:xf::iftit 14 Demographic Data: Ralph's Santa Rosa and Bell Markets, Novato

Oliver's Markets

c-16

f:xbibir t4

Part 2 Cases in Crafting and Executing Strategy

l#tut t't toto"*o"**,u"",',rooor"d

Locations for oriver,s Markets

Continued

Business Policy and StrategY

Avai l abl e at :'l :i j,: !::. i: ir.i-i:Li i-ll .ii :'.t:,il l i :1 il;1:i-i l li !;r:i

:rlsii..:,i1,::.1.lii4.il.-t...1,i, rii:ilil i:'i:t I rr i (accessed October 20,200s).

Heller, Walter, and Jenny McTaggart' "The Search for

Growth: 7 l st Annual Report of the Grocery Indus-

try." Progressive Grocer 83, no' 6 (2004), pp' 31-41'

Lasher, William. Process to Profts: Strategic Planning

for a Growing Business. Mason, OH: Texere, 2005'

McTaggart, Jenny, and Walter Heller' "Forces of Change:

72nd Annual Report of the Grocery Industry'" Pro-

gressive Grocer 84' no. 6 (2005)' pp' 48-60'

Naumes, William, and Margaret J' Naumes' TheArt &

Craft of Case Writing. Thousand Oaks, California:

Sage,1999.

"Outlook 2004." Santa Rosa Press Democrat' Avatl'

able at ..,..,..'. . 1" .1.:-rii::' ' 1 ';'11 1; ''1' ;.'': i1ilL:iili;,ti:.:t:..i,.;l.lill,1-l:-.,|i1.,,.i.1!1'--",i:!l{: (accessed

May 2005).

Porter, Micha el E. Competitive Strategy : Techniques for Analyzing Industries and Competitors' New York:

Free Press, 1980.

"SN's Top 751' Supermarket News. Available at

l:l:.!]i.1),-1!:1,;llii-i.it.:.1!t1l1r:::1.!:-il'il,llili'tli:l{ilJCllllf (accessed March 21, 2005).

"Store Definitions." Progressive Grocers 2003 Mar-

keting Guidebook and Bishop Consulting, 2003'

Availabl e at i:'i-" iv. i 11'1 !.1il t, i-ii lil :: {iii"h l il i }ri li.tlil l} 1 il.I (accessed June 2005).

"The Super 50: Views from the Top'" Progressive Gro-

cer 84, no. 7 (2005), PP' 74-84-

Tarnowski, Joseph, and Walter Heller. "The Super 50'"

Progressivi Grocer 83, no.7 (2004),pp'59-66' : Turock, Art. 'Alternative Formats: Teflon Retailing'"

Progressive Grocer 84, no.7 (2005), pp'22-24'

loThe bitter dispute, which affected 852 stores from San Diego h

south to Mammoth Lakes in the north, had begun on October 1 1'

2003, when 21 ,000 union workers walked off their jobs at Salsw

329 Vons and Pavilions supermarkets. Later the same day' it 0t panded to include a total of 70,000 grocery employeeslhrougl

iegion when Albertson's and Kroger' which-owned the Ralpi's

Case 2 Oliver's Markets

toJxed out tneir union workers. The standoff centered on

in employee health care benefits proposed by the grocsrs'

as a twoiiered compensation package that would result in

and benefits lor newly hired workers. Union leaders cnar

health care cuts as eicessive. Safeway CEO Steve Burd

analysts that major cuts in expenses were necessary for

tradiiional groceiy companies to compete wilh nonunion

c-47

"We have grown every year except the last two years'

I attributeit to us not doing as good a job as we could

do. I can't do anything about Costco, but I can do something about the job we're doing here' I don't think the age of smaller stores like ours is gone'"

ffiih$&*gwffiStuY American Factfi nder. Available at 11 r!'"rt.ii-iii I :.1 i;. Si)-:r

(accessed MaY to JulY 2005).

"Consumers Continue to Shift Shopping Away from

Grocery Stores'" Availabl e at hil'l ;i':l titit i t ll rilli'i llr'

;llirlrr.r-:-.l.-rtriiJ,tttt ):,hl,r1.lli-,i l' iri i;r.:lilllii4llil.*i'ri (accessed APril 10' 2005).

Currie, Neil. "UBS Q-Series Report: Do Supermar-

kets Have a Future?" Progressive Grocer 84, no' 6

(2005), PP.62-7e. D'Aveni, Richard A. Hypercompetition: Managing the

Dynamics of Strategic Maneuvering' NewYork: The

Free Press, 1994.

Economic Research Service of the U'S' Department of Agriculture."Food Market Structures: Food Retail-

in!." Available at 1',"'ti1" rrr:'.r-i:.;.;J:,:r'j.ff:'ii!l:::'i:-l'ir; (accessed June 15, 2005).

FMI Speaks 2004 Key Industry Facts' Ptepated by FMI

Information Service, July 2004, p' 16' Available at

il11:r:,\, i i i lj.r,] iil (accessed June 2005)'

Food Marketing Institute. "Facts and Figures'" Available

at :rt ril:,t:i"tt:r,tri:a (accessed June and July 2005)'

Francese, Peter. "TrendTicker: Trouble in Store'" Ameri-

can Demographics 25'no. l0 (December 2003- January 200\,P.36.

Goll, David. "Grocers, Union Reach Tentative Agree-

mentl' East Bay Business Times, February 27,2004'

Endnotes

lwoodlands Market was located in Kentfield, a town with upscale

oemolrapnics in affluent Marin County, approximately 40 miles south

ol Santa Rosa. 2Economic Research Service of the U.S. Department ol Agriculture'

lttr',nli.,i, :ll,ii,.r,:li:ii.ii,lJ,ltr.t.l:,:1'!l:. . 3Progressive Grocer83, no.7 (May 1, 2004), p' oProlgressive Grocer83, no.6 (April 15, 2004)' pp 31-32

'NeiiCunie, analyst for UBS, advised against opening stores solely

for the pursuit of market share. ln a report published in Progressive

Grocer,he wrote, "There's too much capacity in the marketplace'

leaoing to poor sales densities. While short-term sacriJices may have

to be riade to take out weaker competition, stores will be much more

efficient il there are less aroundl' Progressive Grocer 84' no' 6

(April 15, 2005), P.70. ":,::l:ir..sr,,l.:.

j-, :,ll,iii.'1,! I.ll-v','Aiieriii beiiiosraphics25, no. 1o (December 2OoHanuary 2004)' p.36. ; P rog ressive G rocer, 84(6)' April 1 5, 2005' p' 70' tRep"ort found on lnrl:.'1.!il.:1.ii1li,ji1:iji:.\rii!,i1,rlii.!.:,:il' on April 10' 2005'

as Wal-Mart Stores lnc. Losses sulfered by the grocers as

of the strike were estimated at $2.5 billion D Goll'

Reach Tentative Settlementi' East Bay Businessnnes'

2004, *.'ii,1,i,:i1.jll! !r'i:i:ri:i ":):l

:iiliiiibi!iillt:tii)t (accessed October 20, 2005).