NATIONAL DELI BRAND TRIGGERS SALES SLUMP

GETTYSBURG, Pa. -- In the land of giants, Kennie's Markets, a family-owned chain of four stores, is holding its own with a highly promoted, branded deli meat program that has significantly boosted total sales as well as image, officials told SN.Kennie's took a comprehensive approach to marketing the Dietz & Watson brand of deli products, and is starting to see the payoff. The retailer has posted 15%

GETTYSBURG, Pa. -- In the land of giants, Kennie's Markets, a family-owned chain of four stores, is holding its own with a highly promoted, branded deli meat program that has significantly boosted total sales as well as image, officials told SN.

Kennie's took a comprehensive approach to marketing the Dietz & Watson brand of deli products, and is starting to see the payoff. The retailer has posted 15% increases in total same-store deli sales, year-to-date, just a year after rolling out the branded program with ads, case strips, signs and public address system announcements. Previously, year-to-year growth for the deli departments had ranged around 7%, revealed Brad Kochenour, the company's director of operations.

The sales success has been two-pronged, he explained.

"We had people already looking for a premium product who became new customers, and we've upsold our present customers," Kochenour stated. "Our transaction per deli customer is bigger now. We haven't relinquished any margin either."

With the likes of Giant of Carlisle, Giant of Landover, Safeway and Food Lion breathing down their necks, officials at Kennie's figured a national brand with a quality image would give the stores more heft in a tough marketplace. They also figured the new brand would benefit from promotion.

"It's the first time we've made an all-out commitment to a premium line of deli provisions. That commitment means print ads, product demos, card-marketing, mention of it in our quarterly newsletter, and a minimum of 4 feet dedicated to the brand - Dietz & Watson - in each of our service deli cases," Kochenour said. "We also make plenty of space for their prepacked meats and their nice line of natural-casing franks and bratwurst and cheddarwurst, items we had never had before."

Having worked previously in the Philadelphia area where Dietz & Watson is based, Kochenour said he was familiar with the provisioner and its high standards of production and the support it offers.

"It wasn't a hard decision," he said. "We went with all our store managers and deli managers and the president of our company down to their [manufacturing] facility where they [Dietz & Watson] gave us a very thorough tour, and showed us their training tools, videos and so forth. They offer support, but they don't take over your business like some brands do. Our priority as a small operator is quality and customer service, so it's been a good fit."

In the fight to carve out more market share and keep what it has in all its areas, some of which are dominated by big chains, customer service has to be tops, too, Kochenour asserted.

"We know those guys [the large chains] can come in cheaper because they have more buying power. So part of our strategy is to provide the best customer service in the area. We're in a market where presliced and shaved meats predominate. So we're already a step up by custom-slicing deli meats. Our deli associates also have a very simple rule to follow, and that is this: Make eye contact and acknowledge the customer within three seconds. We call it the 'three-second rule,' and we keep talking about it. We're able to execute it because it's led by the department managers," Kochenour said.

The program Kennie's latched onto with Dietz & Watson provides additional associate training in customer service and deli operations in general, as well as such attention-getters as a neon sign that Kennie's is using in the front window of two of its stores and billboard-type signs for the service delis.

Kennie's promotes the premium meats and cheeses every week. Indeed, its ad circular for the week of Aug. 24 touts Dietz & Watson Buffalo-style chicken breast, home-style turkey and horseradish cheddar.

"It's a nice combination of products they offer, and I think their marketing program is good. We're carrying about 26 of their meats and cheeses, plus their line of condiments. To me, what it does is give us a parity throughout the store, lifts the image. Over this past few months, we've added other upscale programs like Green Mountain coffee and the Hatfield pork program," Kochenour explained.

Kennie's doesn't carry the national brand exclusively. In fact, it devotes significant space to some regional-brand deli provisions that are popular with its customers and continues to offer its own signature, store-made turkey and roast beef. However, at this point, even in its made-to-order sandwich program, the retailer is touting Dietz & Watson products and plans to begin promoting two party trays using the branded products in time for the holiday season.