Much attention has been showered in recent months on the opportunities and challenges in front of large-scale retailing and wholesaling companies. In that context, it's easy to lose sight of the fact that there are many mid-level retailers who are doing just fine.
These mid-level retailers occupy the niche that exists between independent operators with no more than several stores and the behemoths. They're the regional operators of up to perhaps 150 or so stores, or many fewer.
In this week's SN, five such regionals are profiled, and the means they use to swim with the sharks are detailed. Many more could have been profiled, but these five are emblematic of what regionals can accomplish.
The regionals profiled this week have a few characteristics in common, even though they have no real connection or geographical proximity. To cite one, each of them has the big benefit of being privately held. These companies can plan for the long term without much scrutiny from any quarter, particularly from nervous investors.
You'll see the news feature about the five referenced on the front page, but for our present purposes let's take a quick look at each of the five players.
Big Y: This Massachusetts-based company, so named because the original store was sited at a "Y"-shaped intersection in a road, has grown slowly and cautiously over the years and now consists of 50 stores. The company has traded largely on its reputation for high levels of customer service and quality perishables. Now, though, Big Y has taken a bit of a geographical leap into a new and highly competitive market near Boston. We'll see how that works out.
Raley's: This regional operator of 134 stores, based in Sacramento, Calif., is well used to working in a heated competitive environment. It seems as though Raley's is up against every large-scale retailer in California. Despite that, Raley's has a commanding market share in Northern California. To some degree, Raley's credits its competition as being the fuel for its own initiative.
Fiesta Mart: One of the critical elements of retailing success is to offer products that competitors don't offer, or don't merchandise well. That's what Fiesta is all about. This 50-store chain, based in Houston, runs big, exciting stores that feature Hispanic products more effectively than does any other supermarket operator. And, given that almost a third of Houston's population is of Hispanic heritage, that's quite a market niche. Fiesta isn't content with this success, though. It's now offering more Asian specialities to cater to that burgeoning population segment too.
K-VA-T: Guess where this company operates stores? Kentucky, Virginia and Tennessee is the answer; where else? There's much else about K-VA-T that's about that basic. For instance, it knows its demographic. Nearly half its shoppers trend toward the lower end of the income scale, so price is king.
Ball's: This regional, based in Kansas City, Kan., faces another formidable regional, Hy-Vee. Some years back, the market was largely abandoned by major players. The market is changing, though, because of the arrival of Wal-Mart.