Fry's creating a market for Marketplace stores - East Valley Tribune: Business

Fry's creating a market for Marketplace stores

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Posted: Thursday, July 17, 2003 11:29 pm | Updated: 1:03 pm, Thu Oct 6, 2011.

Shannon Liebrock of Chandler tossed groceries and a salad spinner into the race-car shaped shopping basket piloted by her son Brayden, 2, as they cruised through the new Fry’s Marketplace at Riggs and McQueen roads.

“This is great, especially when you’re in the middle of nowhere,” Liebrock said of the combo supermarket-variety store that debuted near her home a couple of weeks ago.

At the other end of the 98,000-square-foot supermarket, Kim Waters and Kyle Herrig eyed a slate coffee table — a bargain at $40 off with the Fry’s frequent shopper card, Waters said.

“We’re building a house in the area, and we’ve seen tables like this for twice the price,” Waters said.

“This is convenient,” she said. “You can get more things done in one stop. It saves time.”

The Chandler store is the first Fry’s Marketplace built from scratch. The supermarket chain, part of the Cincinnati-based Kroger Co. grocery empire, picked up 16 older Marketplaces when Kroger bought the Smitty’s-Smith’s-Fred Meyer consolidated chain four years ago. They are twice the size of the average supermarket and carry 10,000 to 20,000 more items.

Now Fry’s plans to build more of the big stores to compete with such discount giants as Wal-Mart and Target, who have crowded into the grocery business in the last few years. Wal-Mart opened its first Valley Supercenter store in 1999 in Mesa. Super Target has already targeted two East Valley sites — both in Gilbert — for its first foray into the Valley grocery business.

Fry’s pans to build three or four more Marketplace stores within the next two years, Donnelly said. A Queen Creek site was slated to be next up, but Donnelly said Town Hall red tape may delay that, and a store outside the East Valley might be built instead.

The Marketplace stores carry everything for the home and garden from bed sheets to blenders, computer desks to cookware. The stores carry brand names and HD Design, a company private-label tableware products. And there is a full garden department selling everything from plants to planters to patio tables and chairs.

“Furniture and patio are the two best-performing departments,” Donnelly said. Grocery margins, especially in a highly competitive market such as the Valley, are as low as 1 percent. Nonfood items typically carry a much larger profit margin. And more items to sell means more sales. With the food pie being divvied among more players, that’s even more important, Donnelly said.

“Volume drives everything,” Donnelly said. “In the food (store) environment, you don’t survive unless you have volume. The food environment is tough now with Wal-mart and others getting into it. But we have experts from Fred Meyer to get us quality merchandise at good prices.”

The new stores are about the same size as the older Marketplaces, but look different. Among the efficiency measures are tile-less ceilings with skylights that serve as lighting for the stores during daylight. Sensors turn lights off automatically as the sun adds enough light, Donnelly said.

Piped-in music differs by area of the store. The home furnishings music is softer, jazzier. The food aisles are more up-tempo. And the home electronics section features music videos.

The in-store signs are fanciful. The “wine” of the wine cellar section is made from empty bottles. Snack City has street signs such as Salsa Way, Popcorn Corner, Cornchip Drive and Nut Avenue. The book area has real wooden bookshelves like real book stores. Toy World shows kids videos. The home electronics section has places to try out all the major video game systems. The home furnishings are arranged in vignettes by Fry’s video display merchandiser, Sabrina Yeager. Besides looking nicer, it sparks sales, she said.

“If we have a bed display, some people will buy everything on the bed,” she said.

The food aisles take up about the same amount of space as a regular supermarket, Donnelly said, so customers don’t have to traverse double the distance if they just come to buy groceries. But the store is laid out in a way that each trip up a food aisle gives a glimpse of a nearby nonfood section, just so somebody like Liebrock might spy a salad spinner and decide to buy it to dry off the lettuce in her cart.

Fry’s chose the south Chandler spot for the first new Marketplace because it is such a high-growth area, Donnelly said. “We could be on the right road and not compete with any of our Fry’s stores,” he said.

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