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The city of Louisville is not only home to Kentucky Wildcats basketball, the Kentucky Derby, and the world's first cheeseburger, but also to Neumann's ValuMarkets. The popular family-owned company has earned respect as a niche player in a market dominated by major chains. Kroger is the market leader, followed by Meijer and Wal-Mart, who currently operates four supercenters and is expected to saturate the area with up to seven Neighborhood Markets in coming months.
While increased competition is a legitimate concern for the Neumanns, it has in many ways enhanced their position in the marketplace. "Competition has forced us to change and adapt to what we are today—and what we'll be tomorrow," says v.p. James Neumann. "For many years we focused mainly on grocery and really pushed our advertising slogans, 'Home of the Low Tape Total' and 'You've Got Savings in the Bag.' But, like many independents, during the past decade we found that it takes more than the grocery department and low prices to be successful in this business."
He explains: "As the supercenters entered our market, we realized that we would need to compete on a different level. We began to shift our focus to fresh and perishables, and have since become the 'neighborhood market' that WalMart is trying to emulate.
"If it weren't for the supercenters, we'd still be hanging our hat on being the market leader struggling to maintain the cheapest prices on national brands."
Today the Neumanns also concentrate on sponsoring local marketing events and finding ways to satisfy the needs of a multinational customer base. The Louisville population includes, among others, Mexicans, Chinese, Native Americans, Pakistanis, Cubans, Bosnians, and Costa Ricans, many of whom have migrated to Kentucky to secure jobs in agriculture, tobacco harvesting, and manufacturing.
"The ethnic trend is everywhere today," James says, "and for those who care to see it, the business opportunities are endless."
Helping the Neumanns to recognize those opportunities is their diverse work force. "Our employees, many of whom are from different countries, help us to better understand and relate to individual cultures," says company president Greg Neumann, James' elder brother.
He continues: "For example, our Iroquois store, which we consider to be an international market, sells 40 different phone cards that offer customers the best rates for calls to Mexico, Africa, Central America, and so on. That store is also one of the only supermarkets that can send Western Unions to Cuba. On the other hand, our Whittington location, which operates in a predominantly white-collar, upper-middle-income neighborhood, sells more Indian and Pakistani items. Also, beginning this fall, Whittington will provide curbside pickup and will be the first in our market to offer an Internet-based ordering service from MyWebGrocer."
"It takes flexibility and community involvement to be successful at ethnic marketing," James adds. "We encourage our associates to plan neighborhood events that benefit our customers and help to develop a strong sense of community."
Those events include a celebrity bagging program that raises thousands of dollars for nonprofit groups in the Outer Loop neighborhood, and the Americana World Fest, which takes place every September at the Iroquois location.
At the most recent festival, according to James, "Nearly 20,000 people enjoyed all kinds of activities, including Indian ballet, Irish bands, international food demos, a health pavilion, a kids' area, and more."
It appears that in everything they do, the Neumanns' goal is to promote a sense of family within their community and in the lives of their 278 associates.
Greg reflects: "Our business family has experienced some tough times over the years—tornadoes, floods, the passing of fellow employees, and the loss of a store due to a fire. When you love each other like family, these things hit hard."
"Through it all," James adds, "we've learned that no matter what gripes and moans you may have with one another, it's amazing how people pull together in times of need."
While their vision is to grow ValuMarkets in the future, the Neumanns' immediate plan is to focus on existing locations. "We'll continue to reinvest in our current stores while looking at additional opportunities," Greg says. "Right now, our job is to make our existing stores as strong and viable as possible, and to remind everyone that we're still here, still stubborn, and will still be here for years to come."
Independent Retailing editor Jane Olszeski Tortola can be reached at [email protected].