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Being the only game in town doesn’t mean you can be lax, at least according to Jeff Downing in regard to his store, Foothills IGA, in Marble Hill, Ga., which is featured on the cover of the October edition of Progressive Grocer Independent. To be sure, Downing's IGA always strives to be a cut above, without gouging customers on price.
Foothills IGA’s biggest competitors are chain supermarkets and mass retailers, so Downing has to price accordingly. His target is to be lower than some and higher than others to remain in the ballpark for the area. As a small business with 25,000 SKUs, pricing is always a challenge.
“If you try to be the lowest price on everything, you’ll soon be bankrupt,” Downing says. “We try to reach an acceptable margin that allows us to make a profit and survive to the next year. When we opened this store in January 2002, I had people say they thought prices would be a lot higher, but they never were.”
Downing spent most of his career working his way up in management at several supermarket chains, but decided to go into business for himself in 1997 by opening his first independent store in Bryson City, N.C. His plan was to operate several stores in western North Carolina and eastern Georgia, and to that end, he built Foothills IGA, which opened in 2002. He sold the Bryson City store in 2006.
The location of Foothills IGA may have been daunting to some: It’s halfway between the two major roadways in north Georgia, a remote, rural location in the foothills of the Appalachian Mountains. (The former terminus of the Appalachian Trail, Mount Oglethorpe, can be seen from the store.) The closest residential community, Big Canoe, about 2 miles away, has 2,700 homes, and is about 80 miles from the Atlanta airport and 30 miles from the city’s northernmost suburbs.
“When I built this store, I knew the development would be on the major arteries,” Downing says, and that prediction has held true. Two Walmarts have subsequently opened in the area, but they’re located 15 to 20 miles away, and the same is true for the chain supermarkets. “The fact that I have chain competition surrounding the store precludes them putting one right here, at least for 50 years,” he predicts.
The area has a small tourist trade, but it’s more of a getaway community for urbanites. Only about half of the homes in Big Canoe have full-time residents. The rest are lived in part-time by people who come to play golf or participate in other outdoor activities. “When the weather’s good, they come. When the weather’s bad, they don’t come,” Downing says.
That makes for some swings in customer counts. In winter, the store’s business dips about 15 percent below its average, but in the summer, business is 15 percent to 30 percent above average. Downing handles the swings in business by relying largely on part-time help in the summer to add to the staff as needed. This strategy works, as many of the part-time employees — typically students — are only available to work in the summer.