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Ace Hardware’s Big Growth Plans Include Retail Grocery Component

Stokes Market with ACE

Ace Hardware, the industry’s largest hardware cooperative, has aggressive plans to open 750 new independently owned stores domestically over the next five years. Ace says its multi-faceted approach to growth looks to a variety of channels and opportunities for expansion, including a growing emphasis on the retail grocery sector. Citing double-digit growth, unparalleled customer enthusiasm and increased store traffic, grocery retailers John Stokes and Jerrold Russell have found their market differentiator with Ace Hardware.

Stokes Market, an independent grocer based in Salem, Utah, reports significant growth since aligning with Ace Hardware in 2011. Owner John Stokes knows the competitive landscape of the retail grocery industry well; he is a third-generation independent grocer. Stokes purchased the now Ace Hardware-Stokes Market in 2011, a grocery space that was left bankrupt by previous ownership. Stokes immediately knew he needed to reorganize and revitalize the sprawling space.

“We knew of other independent grocers who had experienced success pairing their grocery business with an Ace Hardware store, so we decided to go for it,” said Stokes.

Within months of incorporating Ace Hardware into the business, the operation became profitable.

Today, Stokes Ace fills 8,000 s.f. of the total 42,000-s.f. store space. Not just a single department, the hardware store is integrated into the overall grocery layout.

“Ace is a real money-maker—the best division of the store,” Stokes said.

The hardware margins have allowed Stokes to be more aggressively priced in the grocery categories, helping to compete with local big-box grocery retailers. Overall store revenue is up 10 percent vs. 2012, with hardware revenue also up 10 percent.

For Stokes Market, it’s all about the customer experience, led by store manager Gene Bond. Consumers can shop for more than just groceries, but also a complete selection of hardware in its “bolt on” format.

“Our customers love the accessibility,” said Bond. “Since our grocery store has hours that extend far beyond the home improvement stores in the area, we are able to be the one-stop shop and after-hours resource for DIY customers.”

Jerrold Russell, owner of three Piggly Wiggly grocery stores outside of Birmingham, Ala., opened his first Ace Hardware alongside one of his grocery locations last December and already is seeing success.

“We are consistently seeing 20 percent increases each week, compared to the prior year. Grocery food sales are up more than 10 percent as well. Plus, our customers love the concept,” said Russell.

The addition of Ace Hardware of Clay has been so well received that Russell has plans to add an Ace Hardware to a second Piggly Wiggly within the next 12 months.

“At Ace, we continuously work to identify emerging opportunities and channels to grow our business,” said Curt DeHart, director of new business at Ace Hardware Corp. “We’re already seeing excellent forward momentum among independent grocers and regional grocery chains, so much so that we are forecasting approximately 20 percent of Ace’s growth in the coming years to result from the grocery channel.”

In 2013 alone, more than 15 grocery stores opted to make Ace Hardware part of their core business.

“There are incredible synergies between Ace’s convenience hardware model and that of the independent grocer,” added DeHart. “The principles that drive Ace—service, convenience and quality—are all very relevant to independent grocers, as is the flexibility that comes with being part of the Ace network.”

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