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    Store of the Month: Fresh Prospects

    Ultra Foods is redefining the warehouse format with its new concept store.

    By Jim Dudlicek, EnsembleIQ
    Dave Wilkinson, president, SVT LLC; Andy Raab, SVP; Joe Kolavo, VP perishable operations of Ultra Foods

    Since opening its first location in 1981, Ultra Foods has positioned itself as a low-price leader throughout its market area, which includes northwest Indiana and northeast Illinois.

    “The difference between Ultra Foods and other big-box low-price supermarkets has always been our fresh departments and our extensive variety,” says Dave Wilkinson, president of Ultra’s parent company, Highland, Ind.-based SVT LLC, which also operates the Strack & Van Til and Town & Country banners. “When we had the opportunity to open an Ultra Foods in Prospect Heights, we decided that this was the perfect location for us to take our fresh departments and the variety we offer in center store to an even a higher level, separating us even further from those competitors.”

    To be sure, this northwest Chicago suburb’s new-format Ultra Foods market— a former Omni store, vacant for a decade — explodes most folks’ concept of a warehouse store, which is typically characterized by stacks of palleted product, limited selection and rudimentary service. And the Prospect Heights location offers about 20 percent more variety than even a typical Ultra Foods.

    Entering the 87,000-square-foot store, visitors are first greeted by the value aisle, piled high with dry grocery items, paper goods and liters of pop, with signage proclaiming “Ultra Savers” pricing. “We’ve got 10,000 Ultra Savers every day throughout the building,” notes Joe Kolavo, SVT’s VP of perishable operations.

    But shoppers also encounter a table displaying the “Cookie of the Month,” made fresh daily by the in-store bakery, offering a hint of what the grocer calls the “Ultra Difference.” A few yards further into the produce section, and it’s clear that this difference from most other warehouse-format stores continues to be redefined upward at Ultra Foods.

    Hot or Cold, Just Right

    For starters, the expansive produce section includes some 1,200 items. “This is our largest-variety produce department,” says Andy Raab, SVT SVP. “A lot of international, lot of specialty items. We make our own salsa and guacamole.”

    Colavo adds, “We have three people dedicated to our cut-fruit program — it’s a daily process.”

    Additionally, there are multiple varieties of mushrooms, and up to four types of kale. “Our goal is to have an organic item in every single category,” Kolavo says.

    While Ultra purchases much of its produce through SVT’s majority owner, Joliet, Ill.-based Central Grocers, “we also go to the market in downtown Chicago to get spot deals,” Raab notes.

    Astride the produce section is the in-store bakery, which makes most of its wares from scratch. “That’s a key point of differentiation,” Kolavo stresses. “We bake cakes. We mix, bake and hand-decorate cakes every day in our bakery. Just about every one of our competitors purchases a frozen cake made somewhere other than their store. The same is true with our doughnuts.”

    Raab adds, “If the case runs out of bread, we can have fresh bread made in 10 to 15 minutes.”

    The store’s delicatessen offers more than 125 sliced-to-order varieties of luncheon meats from the service case (dominated by Dietz & Watson and Greenridge Farms) and another 100 self-serve deli meats, including many ethnic offerings from local and regional suppliers.

    “We roast our own beef and turkey overnight, slow-cooked to our recipes,” Colavo says. Store Manager Gerry Schroeder adds, “You get quality beef at a much lower price.”

    Salads are prepared from “our recipes,” Colavo explains, with some made entirely using scratch on site, others at an off-site commissary from recipes developed by the store’s deli director. “You won’t find these salads at our competitors,” he says of the 50 rotating varieties. “All are custom to our stores.”

    Also in the deli is “Larry’s Legendary” fried chicken, made with “only fresh, never frozen chicken,” Colavo says. Dinnertime shoppers can pick up to-go dinner bags featuring fried ($11.99) or rotisserie ($9.99) chicken with two sides from the hot bar, plus rolls. An additional heated case, located near the checkout lanes for the convenience of evening commuters, merchandises rotisserie birds with stuffing mix and 2-liter pop.

    Colavo says the hot food bar has been well received by shoppers, who also offer “a lot of comments on our variety.” Also popular is the fresh-made sushi, which Raab says accounts for three of the store’s top 30 items.

    Perhaps a bit slower to catch on is the store’s elevated dining area above the deli, which looks out onto the produce section. “We’ve toyed with it over the years, but this is the first in-store seating we’ve had,” Wilkinson says. “I’m not sure if we’re getting the message out enough that we have it — we need to communicate that.”

    The message is reaching students at nearby Hersey High School, where an open campus allows youngsters — the next generation of grocery shoppers — to come to the store for lunch and hang out in the café for an hour or so to enjoy the television and free Wi-Fi, Colavo says. At the base of the stairs leading up to the café is the beverage bar, offering fountain pop, gourmet coffee and other drinks that can be enjoyed on the spot or while roaming the store.

    Daily Grind

    Ultra Foods carries Certified Angus Beef exclusively, and the store’s signature butcher shop item is ground beef at four leanness levels, including a 97 percent “ultra lean” grind that Colavo says is unique to the banner. “Our butchers cut subprimals and grind fresh every day,” he says. “We only sell our fresh ground beef for one day, so our customers are always able to purchase fresh, healthy, great-quality product.”

    In addition, the butcher shop makes 20 types of fresh sausage. The rotated varieties, some of them seasonal, are made with Farmland all-natural pork. “It’s much leaner than anything prepackaged,” Colavo says of the preservative-free links. “It requires a lot more labor and cost, but our customers enjoy the variety and freshness.”

    Also unusual for a warehouse store are five lines of chicken: organic/certified humane, Miller Amish (natural and organic), Sanderson Farms, Perdue, and the store’s own hand-trimmed poultry, which includes boneless, skinless breasts along with meat precut for tacos and stir-frying.

    Meanwhile, the seafood counter offers “a minimum of 20 fresh fish selections every day,” Colavo says, noting that the store will even prepare seafood purchases — grilled, baked or fried —at no extra charge while customers shop, and call them when the orders are ready. “A lot of people are uncomfortable preparing seafood,” he says. On PG’s visit during Lent, the store offered seafood dinner specials for the observance, including tilapia, ocean perch or lake perch with fries and coleslaw for $7.99.

    The meat case includes organic beef and pork, grass-fed beef and fajita kits featuring beef or chicken with vegetables, plus Chiappetti brand veal and lamb. All family packs of meat are offered at 10 percent off.

    Variety Show

    More typical of the warehouse format is an extensive center store, though less typical is such a vast selection of product types and brands, plus a dedicated aisle for organic, natural and gluten-free products.

    “Our variety in center store is significantly more extensive than most other supermarkets,” says Bob Wasiuta, VP of grocery merchandising. “We carry more than 1,000 gluten-free products, 500 non-GMO items and more than 1,300 organic products throughout center store, frozen foods and our dairy department. We carry 12 full lines of imported pasta, and an extensive variety of other international foods.”

    Colavo adds, “Our back room is significantly larger than most, for forward buying to extend the savings as long as we can.”

    Schroeder says the store’s extensive variety hasn’t gone unnoticed by shoppers. “We’ve received some of our most positive comments about these areas,” he notes, pointing out the aisle devoted solely to Hispanic foods, in addition to a more diverse international aisle. “It’s variety you’re not going to see anywhere [else] in a big-box store.”

    Eastern European and Asian products dominate the wide selection of specialty sauces, coffees, cookies and other delicacies. The store recently added a 4-foot section of Greek foods in response to customer requests within the first two months of opening. “We’re constantly listening to our customers,” Schroeder says.

    And the store is reaching out to shoppers as well. Schroeder says Ultra Foods uses its own people to sample products, and makes sure they taste the products first so they’re better equipped to discuss them with shoppers. “Most customers have been able to taste our products,” he says.

    The store has an extensive beer, wine and spirits section featuring many craft beers, including a cooler from which shoppers can assemble mix-and-match craft 6-packs. “We’re one of the few stores to have this in the cold section,” Schroeder says, adding that Polish beers are also big sellers because of the local ethnic population.

    Raising the Bar

    The Prospect Heights store incorporates several design aspects aimed at saving time, labor and energy, explains John Ritchie, director of facilities. These include prefabricated cooler panels, LED lighting, high-efficiency fans, doored cooler cases, curtained open cases and a low-maintenance polished concrete floor.

    The latter feature was most welcome during the recent harsh winter in the Chicago area, as it was easy to keep clean and thus prevent customer falls. “During this horrible winter, our floors looked better than most stores’ floors,” Schroeder remarks. The store also has an emergency generator to protect perishables in the event of a power outage.

    Just the nature of the store itself presents its own challenges. “With the significant addition of variety throughout all of our perishable departments as well as center store, closely managing inventory and product rotation is even more critical,” Schroeder says. “While our customers tell us they appreciate the extensive variety we carry, and that variety is definitely a point of differentiation between us and our competitors, it does add cost to our operation.”

    But the challenge seems to be paying off. “Easily the most rewarding part of opening this store has been all of the positive comments and compliments we have received from our customers,” Schroeder says. “We believe that customers who enjoy shopping at a bigger-box grocery format value all of the ‘Ultra Differences’ we offer. They appreciate the fact that they are able to save on their grocery bill without sacrificing all of the variety and full-service fresh departments.”

    According to Wilkinson, Prospect Heights officials were overjoyed that a new grocery store was coming to the site, the lease on which Dominick’s (which owned Omni) finally gave up 10 years after the old store closed, when parent company Safeway decided to leave the Chicago market last year. And the project gave Ultra Foods some new lessons that will be shared among the banner’s 16 other stores; at the time of PG’s visit, Ultra’s Downers Grove, Ill., store was being converted to this format, with the Lombard, Ill., location soon to follow.

    “We challenged our Ultra Foods merchandising and operations teams to take things to a new level at Prospect Heights. We gave them the latitude to test and try new concepts, categories, products and merchandising techniques,” Wilkinson says. “We all learned from this experience, and we are already applying many of the successes we have realized at this location into a number of our other stores. Prospect Heights, in a good way, forced many of us out of our comfort zone and challenged us to take a new look at how to raise the bar in existing and new locations to better satisfy our customers.”

    By Jim Dudlicek, EnsembleIQ
    • About Jim Dudlicek As editor-in-chief of Progressive Grocer, Jim Dudlicek oversees daily operations of the magazine, spearheads its signature features, produces PG’s monthly Trend Alert newsletter on center store issues, moderates its regular webcast series, and writes and comments about a wide range of grocery issues. A food industry journalist since 2002, Jim came to PG in June 2010 after covering the dairy industry for 7½ years, during which time he served as chief editor of Dairy Field and Dairy Foods magazines. A graduate of Marquette University, Jim is fascinated by how truly progressive grocers inspire consumers to enjoy food, transforming the industry from mere merchants into educators that can take the most basic of all necessities and turn it into something profound and life-enhancing.

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