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    INDEPENDENTS REPORT: Taking chances

    Retailers at the latest NGA show made it clear you don't need to go to Vegas to be in a risky game.

    This year's NGA convention show floor was bustling with independent operators there to check out the latest products, equipment, and technology promising to drive top-line sales and increase efficiencies in their stores. But away from the floor, in a quiet hallway inside the sprawling Caesars Palace Convention Center in Las Vegas, I took advantage of another key attribute of the show: the opportunity to connect with intriguing retailers whom I'd never before met, and who are taking on daunting challenges with guts and grit -- and some help from NGA.

    The hallway held an enormous display of collectibles and artwork, all part of a silent-auction fundraiser organized by NGA's prestigious Asparagus Club to fund scholarship initiatives. There to support the Asparagus Club's efforts were a number of industry leaders, including Larry McCurry, who recently retired from Unilever; Kellogg's Russ Hockin; and retailers Mike and Kathy Needler, Leonard Harris of Chatham Foods, and Kurt Rodhe of Rodhe's IGA SuperCenter. Also on hand were NGA's Christine Cunnick; IGA USA's new president and c.e.o., Mark Batenic; and many others.

    I began talking shop with Wyoming-based retailers Carmen and James Diehl, and then with independent grocer Jack Shakoor of Caldwell, N.J., and quickly became engrossed in listening to how they compete in their chain-dominated markets.

    Having attended the first NGA convention, held in 1982, James Diehl, owner of Diehl's supermarket in Moorcroft, Wyo., has understandably witnessed many changes in our industry. According to this down-to-earth grocer, however, what hasn't changed is his respect for the organization.

    "We have a lot of confidence in NGA because the group has always looked out for the best interests of family-owned stores," he said.

    'Level playing field'

    His spouse and business partner, Carmen Diehl, who two years ago became the first woman ever elected to the board of directors of Norfolk, Neb.-based Affiliated Foods Midwest, concurred. "NGA's focus on family-owned businesses, especially in the area of succession planning, is to be commended," she noted. "When my first husband passed away, I became the owner of our small, family-owned Joe's Food Center, located in Upton, Wyo. I personally can attest to the value of proper succession planning."

    The Diehls, who together own a third store, Paradise Foods, in the resort town of Pine Haven, Wyo., are also thankful for their wholesaler, Affiliated Foods Midwest, a co-op for which NGA board member Marty Arter has served as president for about four years.

    "When it comes to the cost of goods sold, all members are on a level playing field," said Carmen Diehl of the co-op, which she said mainly services the ShurFine, ShurFresh, and IGA banners in 12 states. "The only variance relates to transportation costs."

    She added, "We retailers own the warehouse -- and that gives us much more control of what happens in our stores."

    Also appreciating NGA's devotion to independents is Shakoor, owner of two 20,000-plus-square-foot Jack's Foodtown supermarkets in New Jersey.

    A 40-year veteran of the food industry, Shakoor began his career as a clerk and moved through the ranks at Pathmark, where he worked for 19 years. "Pathmark treated me so well, and they provided me with a great education," he said. "My work there ultimately inspired me to own my own stores."

    While he can't ignore the Wal-Mart Supercenters now operating in his market, Shakoor said he's convinced that the 80-plus ShopRite supermarkets blanketing New Jersey provide even tougher competition. "ShopRite is a strong banner, and their stores are very similar to ours," he admitted. "As an independent, I really feel they're more of a threat to us than Wal-Mart."

    Keeping it simple

    Working side by side with his 120 associates every day, Shakoor said he promotes a "commonsense" business philosophy. "First, you've got to have employees who are happy both at home and at work," he said. "I encourage them always to have fun."

    Regarding store operations: "In my view, it's really the simple things we do that keep us competitive. For example, if we're out of stock on a big-selling item, our store managers automatically head to the closest competitor with their corporate American Express cards and purchase what we need to keep our customers happy. Why should we be the ones out of stock?

    "We also pay close attention to our weekly purchases," continued Shakoor. "With technology today, you don't need anything in the back room or coolers. Take milk, for instance. When we put milk on display in the dairy case, we want our customers to know that they'll have eight and a half to nine days to use that product. That tells a lot about a store's overall freshness."

    What keeps this silver-haired retailer awake at night? For one thing, the highly competitive New Jersey real estate market. "There are a lot of sites in Jersey that would make great grocery stores and allow our company to grow," explained Shakoor. "But as a family-owned business, it's impossible to compete with a national drug store chain that comes into town and plops down $20 million for a corner location, while we're trying to justify paying $3 per square foot for common-area maintenance charges at our current locations, plus another $3 a foot for real estate taxes."

    Adding to the pressure is a local market that's also tough on profits. "Price is still very important to supermarket customers in New Jersey. They want a fair deal. That forces us to keep overhead low, and our departments compact.

    "We've fast become a business whose expenses exceed 30 percent, and it's getting tougher to make a profit," concluded Shakoor. "As a storeowner, I'm constantly asking myself, how much do I really need to live well?"

    Independent Retailing Editor Jane Olszeski Tortola can be reached at [email protected].

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