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COPPELL, Tex. -- Minyard Food Stores, Inc. here is deepening and accelerating its commitment to the Latino-focused Carnival Supermarkets banner. The chain said yesterday it will begin remodeling upgrades at two existing stores, and will open two more flagship Carnival units by 2008.
"We're moving fast to advance this strategy," Minyard c.e.o. Michael D. Byars told Progressive Grocer yesterday.
To help bankroll the Carnival initiative, Minyard said it making several cost-cutting moves, including outsourcing certain back-office functions, upgrading its retail technology systems, and joining Kansas City, Kan.-based cooperative Associated Wholesale Grocers, which will now handle the chain's warehouse and distribution functions.
Byars confirmed that the premier flagship Carnival Super Market format, which debuted in late August after extensive store tests, consumer focus groups, and demographic research, has "exceeded the company's expectations."
The new concept, which features an impressive number of full-service fresh departments, has attracted a diverse group of customers, s.v.p. of marketing and strategic planning Poul Heilmann told Progressive Grocer. "We were concerned that we might alienate our non-Hispanic shoppers, but that hasn't been the case at all. People from various ethnic backgrounds have told us they feel comfortable shopping here," Heilmann said.
Minyard has also done its best to tailor individual Carnival stores to the neighborhoods where they operate, which helps customers feel more inclusive, the executives said.
The company said it is investing in several remodels in 2007. In the coming months, remodeling upgrades will commence at two existing Carnival stores. In addition, construction is slated to begin in late 2007 on another flagship Carnival Super Market in Fort Worth; and a third will break ground in 2008, also in Fort Worth.
In some cases, the chain will close existing stores to further focus on the newer units. For example, the Carnival store at 1120 S. Westmoreland Road in Dallas will close next month, due to its proximity to a nearby new flagship Carnival Super Market.
The company is also upgrading its systems, as well as some back-office functions at headquarters, which it said will maximize the efficiency and provide the right tools to manage the transformation successfully.
"We're now upgrading six software systems, including a backdoor upgrade system and a new pricing system from Retalix," Byars said. "We're also implementing a new employee scheduling system from Kronos. We see that as a great opportunity to improve customer satisfaction and help us improve our numbers."
In one of its most substantial shifts, Minyard, which has been self-distributing since 1963, plans to sell or lease its 722,000-square-foot distribution center and by late summer, will rely on the warehousing and distribution services of Kansas City, Kan.-based cooperative wholesaler Associated Wholesale Grocers.
"We looked at potential wholesalers for over a year," Byars said. "We decided it would be in our best interest to become a member of a cooperative. With the buying power of more than $5 billion in annual purchases, Associated Wholesale Grocers seemed like the right choice."
The partnership with AWG is a win-win, Byars added, as Minyard will become the largest member of the cooperative and will bring its Hispanic marketing savvy to the wholesaler.
Minyard Food Stores Inc. consists of 65 supermarkets, 39 pharmacies, and 15 fuel stations in the Dallas/Fort Worth Metroplex, including 24 Minyard, 23 Carnival, and 18 Sack'n Save stores.
-- Jenny McTaggart