Last updated on January 15th, 2019 at 08:40 am
Kevin Konkel, who was appointed to the newly created role of chief operations officer at Raley’s this past March, kicked off a trio of executives from the West Sacramento-based grocery who addressed the audience at the Western Association of Food Chains annual convention in May.
Konkel was followed by Deirdre Zimmermann, SVP of marketing, and Paul Gianetto, who was promoted to SVP of sales and merchandising at the same time Konkel was promoted.
Konkel praised the company’s top leadership—President Keith Knopf and Owner Michael Teel—for helming a “great servant leadership team that is really starting to spin the flywheel for us. We want to see that continue, and we expect it will.”
The company is being guided by three strategic initiatives, he said. They are organizational transformation; store diversification and growth; and team member experience.
Under the heading of transformation, Raley’s is “a customer-centric organization, so we continue to develop our brand—what we stand for and how we talk to our customers,” Konkel said. “We do that through our loyalty program, ‘Something Extra,’ and our robust digital strategies that are really starting to take shape.”
One of the ways Raley’s is “talking” to its customers is at the shelf. Through its Shelf Guide program, which launched last September, Raley’s is communicating not just the typical information that is usually found on products (gluten free, non-GMO, organic, vegan, kosher), but also relating which products are minimally processed, nutrient dense and have no added sugar.
To create the Shelf Guide, every product with a UPC code was scanned and the ingredients and nutrition facts were put into a database, Zimmermann said.
“Once it was in the database, we customized our own icons and our own rules based on what we thought the customer wanted. We’re all on a very isolated health journey; what’s healthy for me may not be healthy for (you),” she said. “Through our data and our communications, we’re really proud to do this one-on-one conversation with our customers.
“We were really proud to launch this because it’s more around how to push the customer to make a better choice,” Zimmermann added. “We’re not going to condemn anyone for eating a product that has a lot of salt in it; we just want to make sure that when you’re looking at the shelf, you’re making a better decision. Now, when a customer is at the yogurt aisle or at the spaghetti sauce aisle, they can quickly see what’s vegan, what’s non-GMO, what’s organic, what’s no-sugar-added. We’ve had a lot of great response to that, especially from moms whose kids were just diagnosed with celiac, for example. This is an easy way for them to shop.”
The grocer’s e-commerce business, called eCart, also utilizes the nutrition information.
“Now, for each category, shoppers can sort products according to the attribute they’re most interested in,” she said. “For a vegan, it’s really difficult to shop online because you can’t necessarily see all the ingredients that go into every product, but with ours you can. We’ve gotten great responses from our customers who are using that.”
In April of this year, Raley’s launched its “However You Eat” campaign, a multi-media effort built around the idea of “however you eat, we can help you eat better,” Zimmermann said. “This, again, is playing off that personalization but, more importantly, it’s playing off this idea that everyone can do a little more to make a better health decision.”
Raley’s tries out its smallest concept ever
New stores, new concepts and remodels are high on Raley’s priority list as well.
Under the new store concept umbrella, Raley’s in May opened its first Market 5-ONE-5 store in downtown Sacramento in the historic R Street District. At 11,000 s.f., it is the smallest store Raley’s has ever tried to operate, according to Konkel, and the company is operating it somewhat separately from the rest of its stores.
Speaking just days before the store opened on May 15, he described it as “kind of a full expression of health and wellness for us. It’s going to be a little bit of a playground.”
The ONE in the name stands for Organic, Nutrition and Education, and every item in the store was selected based on those values, according to Raley’s.
Teel, in a press release about the new format, said, “Market 5-ONE-5, and what it stands for, has been a vision of ours for a long time. Its purpose is to offer our community access to fresh, nutritious and affordable food. Its mission is to help people live healthy, vital lives by taking the guesswork out of understanding nutrition.”
With its downtown setting, the store also has made space for people to eat and socialize. There is space for indoor and outdoor dining for shoppers who want to enjoy their wine by the glass, beer or kombucha (on tap), coffee, tea or juice as well as seasonally-prepared cuisine. Delivery is available for local customers, and the market also will deliver catering orders to businesses in the City of Sacramento.
Raley’s also took care to staff the store with chefs, foodies, urban farmers, nutritionists and a registered dietitian, who can all offer their guidance, knowledge and expertise on food and nutrition.
Levi Wingo is the GM leading the Market 5-ONE-5 format, and the downtown Sacramento store is not expected to be the only one.
“We’re very excited and looking for more opportunities,” Konkel said, later adding during a question-and-answer session, “our real estate team is already hard at work to find other opportunities…we won’t know until we have two or three of these going (what our growth trajectory is).”
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Konkel said Raley’s also is looking for opportunities to open stores similar to the Nob Hill Foods banner store it opened in January in Santa Clara.
“It’s very new and unique for us,” Konkel said. “It’s at the bottom of a 900-unit luxury apartment complex…Apple pre-leased 50 percent of this complex before we even moved in.”
The Nob Hill store takes up about 24,000 s.f. of the ground floor of the Monticello Apartment Homes, located on Monroe Street.
While the store, which he described as “doing well,” does have some “unique challenges…we’re encouraged by what is to come and looking for other opportunities like it.”
In Rancho Murieta, Raley’s is working on a new, larger store to replace its “Murieta Market by Raley’s” banner store located on Murieta Drive. The replacement store—under the Bel Air banner—should open soon.
The Murieta Market by Raley’s represents the company’s “interim opportunity to serve that community until we build our new store. That will be opening up sometime next calendar year,” Konkel said.
Truckee will be getting a new store, and it will feature a new design. Construction was expected to get under way “as soon as the ground thaws out a little bit more,” Konkel said. “We’ll see how fast we can go. It’s a really unique environment, but it will be a beautiful store with the mountain setting and very resort feel to it.”
Plans for the Truckee store (whose look is shown above) first were announced in June 2016. By May 2017, developer JMA Ventures had acquired the property, which is located at Joerger Ranch on the corner of Highway 267 and Soaring Way, adjacent to the Truckee Tahoe Airport. A 35,000-s.f. Raley’s is part of the first phase of the development, which is expected to serve both Truckee area residents and vacationers visiting the Sierra Nevada-Truckee-Tahoe region. The store will have increased amenities and an expanded foodservice department, including restaurant-quality, grab-and-go options.
Konkel also said the company is contemplating more acquisitions as a way to build its store portfolio.
“We recently made a small acquisition, and we are actively looking for other opportunities in that vein,” he said.
Raley’s closed this spring on its acquisition of five Scolari’s and one Sak’N Save store in the Reno, Nevada, area, bolstering its operations in the market.
The Scolari’s stores are now operating as Raley’s. The Sak’N Save store, which is keeping that banner for now, is similar to Raley’s Food Source price-impact banner, Konkel said.
The Scolari’s acquisition, he said, is “a nice, natural extension of a marketing area where we already have really strong share, already have a team infrastructure and a great family-legacy business that fits well with Bel Air and Nob Hill and the Raley’s family, so we’re really pleased to carry that out.”
None of the growth and success would be possible without keeping a tight rein on costs in order to have money to invest back into the business, he said, nor would it be possible without a strong team of associates.
“Our team member experience—it all comes together there,” he said. “Our engagement is very high. We’re working hard to create wellness champions and evangelists in our stores to drive our mission and our vision. And, of course, we are a growth company and an opportunity company…We want them to see that path and we’re encouraging them to grow and stay with us as we attract new talent at the same time. That’s a big part of our strategic initiatives.”
Raley’s corporate offices—they call it the support center—is being revamped to promote collaboration, Konkel said.
“Michael Teel and his executive team are all in cubes now; it’s a very collaborative environment. You’ll see that when you come into the offices for those of you who call on us. We’ve got some new meeting rooms to meet with vendors and facilitate business and growth together. We’re excited about what’s happening in that respect.”
As a good corporate citizen, the grocer plans to continue “being very generous and being very purposeful in how we bless the communities we serve (as that) is a big part of who Raley’s is and at the heart of what we do as well.”
Gianetto told the WAFC audience that Raley’s is growing the breadth of its “Something Extra” loyalty program, with additional offers to loyal customers and more touchpoints.
“One of the ways we’re going to do that is through a campaign we’re calling ‘You Might Also Like,’” he said.
With its partners at dunnhumby, Raley’s already had good information about what its loyalty members were buying; now, members are exposed to additional brands “to give you better opportunity for more exposure and more allocation of your offers as you partner with us in Something Extra,” Gianetto said. “We’re already experiencing a 37 percent boost in sales, and we’ve now added eight more offers that can go out to our customers that are engaged with us in Something Extra.
“This is very exciting…If there are relevant offers in the offer pool, a customer can get up to 30 offers in a month,” he said. “We’ve just got a lot more ways that we can reach out to our customers with your brands to drive incremental sales.”
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