NORFOLK, Va. -- Farm Fresh here is going for the gold with a new cafe format that it hopes will turn its stores into food-service destinations.
The concept, Gold Cafe, takes shape around a pair of all-you-can-eat self-service food bars. The dual bars, hot and cold, feature a broad menu aimed at netting big volume in all three major meal occasions.
The food bars are backed up by other programs, such as cappuccino stations, sushi bars and sweet shops with big-name ice cream and chocolates. Coupled with traditional deli, the cafe spearheads a new fresh food strategy for the 56-unit chain.
"We have a total corporate commitment to make the cafes a destination," said Steve Harmon, Farm Fresh's senior vice president of marketing and merchandising, in an interview with SN. "And we're dedicated to growing volume in them, which is an entirely new direction for us. Whatever it takes to do it, whether it's floor space, labor or inventory, we'll do it."
That's a serious attitude toward food service, and a new 65,000-square-foot Farm Fresh unit in Kiln Creek, Va., in the Hampton-Tidewater market area, represents that strategy in action.
The cafe/food court is the first merchandising element shoppers encounter, followed by deli, bakery, produce, and service meat and seafood in a fresh foods power aisle that hugs the right wall to the back of the store.
The design sets fresh apart from everything else, which is clearly Farm Fresh's intent. It also makes it clear that the chain intends to use fresh foods as a weapon against its primary supermarket competitor in this market, Salisbury, N.C.-based Food Lion.
What's more, the food court is a salvo shot directly at fast-food operators and restaurants.
"The driving force is our desire to grow our market share," Harmon said. "The one place we haven't attacked is the nonsupermarket arena, and we figure we can recapture some of the business fast-food chains have taken from us over the years. We knew we could do as good a job with a hot table as some of the restaurants that offer all-you-can-eat buffets."
The chain plans to roll out the concept typified at Kiln Creek to most of its stores within the next year, Harmon said. Two weeks after the grand opening of that store, it installed another Gold Cafe, complete with the all-you-can-eat program, in a remodel a few miles away.
The strategy presents risks as well as opportunities, however. For one thing, the operator faces a challenge in arming the concept with adequate skilled labor, and it will get tougher as the strategy rolls out.
It also comes at a time when Farm Fresh is smack up against a pack of sharp competitors that, beyond behemoth Food Lion, includes meal provider Kenny Rogers and supercenter operator Kmart.
"There's a lot to like in this store, but Farm Fresh is going to have to be very good at this location because they're surrounded by tough competitors who execute well in their specialty," said Brian Salus, president of Salus & Associates, a Midlothian, Va.-based retail consulting firm.
"Traditional formats in most stores lead with a produce statement, but here Farm Fresh has chosen to send the message of ready-to-eat foods with its food court," Salus said.
According to Harmon, the key to pulling off the gambit is volume, and lots of it.
"We'll strategically place them," said Harmon of the food courts. "For example, if a store is in close proximity to another of ours with the concept, we wouldn't want to dilute the volume.
"Some chains put in food courts for the customer's convenience and then take a really large gross margin on the products. But we're relying on volume to make money. The gross dollars will be there," he said.
His optimism is apparently not unfounded. At the Kiln Creek store, combined volume from the all-you-can-eat bars and the deli is accounting for more than 10% of total store sales. That compares favorably with the typical store distribution of 4.5% to 5% for the deli and food-service departments in the chain's other units. In the newest store, salad bar sales are part of the deli's total, while salad bar sales have been a produce ring in the chain's other units.
"We had no idea we'd do this much business," Harmon said. "It's way beyond our expectations. We'd have been happy with 6% of distribution."
Harmon also said that since the store opened July 4, it has chalked up Farm Fresh's top sales volume for the initial two months of operation. He would not assign a dollar figure to that achievement, but said the store is expected to level off at third or fourth place in the roster of the chain's top-volume units.
One reason for the promising food-service performance at Kiln Creek could be that Farm Fresh goes further with the business there than it ever has before.
While the chain has successful salad bars in all its stores, and cafeteria-style hot food programs in 15 of them, this strategy represents its first attempt at a hot food self-service bar. The all-you-can-eat merchandising tactic is new also, as is the sweets shop.
Before launching the full-blown concept officially at Kiln Creek, the chain experimented with a "test store" where a hot food bar went in at the beginning of summer.
"We knew we were going to do this [chainwide]. We just wanted to make sure everything was running smoothly before we put it in [Kiln Creek]," Harmon explained.
The hot food bar in the test run was an overnight success, he added. Sales off the bar at that store, which previously had had a cafeteria-style hot food department, doubled in the first week, hitting $15,000.
"By now, it has gone to $17,000," Harmon said. That represents nearly $10,000 in additional sales of hot food.
At Kiln Creek the hot food bar stands side by side with the cold salad bar, making a strong statement punctuated by a large overhead "Gold Cafe" sign as shoppers walk in. A sharp right takes one into a seating area for 80 to 100 people, with oak chairs at oak-rimmed, laminate-topped tables. A cash register beside the cappuccino station serves cafe customers.
The seating capacity is already obsolete.
"We've been maxed out every evening," Harmon said, adding that customers have complained that they could find no place to sit once they had filled up their plates. "The concept is such a huge success here that we're knocking a wall down in order to increase the amount of seating and put in the sweets shop."
To double the seating within the next month, the chain has leased 4,000 square feet of mall space adjoining the cafe.
The food court abuts the service deli, which offers freshly made pizza, made-to-order sandwiches, fried and rotisserie chicken, and a variety of salads.
Then comes the bakery, featuring huge displays of European crusty breads. Produce is next; then service seafood, complete with sushi bar. Service meat takes shoppers to the back wall.
Food preparation in all the fresh departments, including produce, has been brought into the open to intensify the service atmosphere.
Harmon said it "adds to the food-court feeling." Low-profile cases in all the fresh departments give customers clear views of the food-handling activity.
The design also keeps that "food court feeling" distinct from the rest of the store. To the left, canned, bottled and boxed specialty foods are stacked on shelves higher than in Farm Fresh's previous stores to create "a natural wall" that funnels traffic down the fresh food corridor, Harmon said.
The specialty foods and extensive wine displays are also there to reinforce an "upscale message" and to separate the perishables from the grocery aisles.
The self-service hot and cold bars open for lunch at 11 a.m.
At lunchtime, 12 hot wells hold entrees and side dishes. The wells were being replenished constantly by associates when SN visited the store. On that day, a weekday, the Gold Cafe was nearly full between noon and 1 p.m. In addition, a large number of customers bought food from the bars for takeout.
The dinner menu includes ethnic items such as cheese and chicken quesadillas and Chinese food, as well as all-American favorites such as meat loaf and fried chicken. Theme nights, such as Mexican and Italian, are on the agenda, Harmon said.
For lunch and dinner, customers
can choose from 80 items between the hot and cold self-serve bars.
In the beginning, the hot and cold bars opened at 6 a.m. with a variety of breakfast items featured. Last month, however, that was changed because volume for the bars was relatively light until lunchtime, Harmon said. Breakfast is still served from 6 a.m. to 11 a.m., but it's cooked to order at the deli department's grill.
The breakfast menu includes pancakes, french toast, bacon, scrambled eggs and such regional favorites as grits and cheese and biscuits with sausage gravy.
While volume at the Kiln Creek unit already sounds like a retailer's dream, the concept is not foolproof. Harmon said the potential pitfalls include difficulties getting enough staff trained to handle a rollout of such a program, and a persistent lull in the action between lunch and dinner.
To head off the staffing problem, Farm Fresh made a recruiting and training arrangement this year with Johnson and Wales, the culinary school based in Providence, R.I. As for the afternoon lull, Harmon said he hopes that gap will be filled by business drummed up by the sweets shop.
"We expect customers will see it as a place to have a snack in the afternoon," he said. Farm Fresh will select a well-known ice cream brand to attract their attention, he added.
Other food-oriented distractions are close at hand, however, and present yet another challenge, at least to this particular store. The shopping mall in which the store is located also sports a Kenny Rogers unit and a Pizzeria Uno's Chicago Bar & Grill.
What's more, it is anchored by a Super Kmart Center, which has a hot food cafe.
"The competition is big here, but we wanted to launch the Gold Cafe here to prove to ourselves it can be a success," Harmon said.
Some customers interviewed by SN inside the Gold Cafe were enthusiastic about Farm Fresh's new concept.
Aubrey and Bertha Farmer, who live 70 miles away in Deltaville, were partaking of the all-you-can-eat deal. The price for all-you-can-eat in-store is $4.99; for takeout, it's $2.99 a pound.
The Farmers said they thought the food was a bargain, and that they would henceforth come to Farm Fresh to eat whenever they come to shop at Super Kmart. That was, in fact, how they happened upon the Farm Fresh cafe that day.
Another cafe customer, Janet Faltisco, from nearby Village Green, was having the pizza special from the service deli. It was a large slice of pizza with a large beverage for $1.79.
"It's a good price, and it's good, too," she said, adding that she is stopping at the food court several times a week to pick up breakfast on the way to work.
A Newport News resident, Veronica Hackett, said if she worked near the store she would definitely pick up hot food for dinner, probably once a week.
The Kiln Creek store is situated in a growing market, according to a local industry source. New housing developments have sprung up in the last five years in a huge tract that used to be undeveloped woodlands. And now an office complex has sprung up just across the road.
The new shopping mall itself is expected to grow as a destination for consumers from miles around. Indoor golf and a virtual-reality center are reportedly going to be added as the mall expands.
Meanwhile, Farm Fresh will import the new food-service concept elsewhere. Next up are a unit in Norfolk and one in Virginia Beach, both different marketing areas from the Hampton area.
"We have the [concept] going well enough now in this market to put an announcement in our ad insert in October," he added.
Asked what Farm Fresh has learned so far, Harmon said, "Mostly, what people want to eat and when. Shrink was huge at first, but now we have a better idea of what quantities of each product to prepare when."
"Farm Fresh has always done a good job with our salad bars," he explained.
The newest concept appears to combine the success of the salad bar with hot food marketing that Farm Fresh knows can be a draw -- if it is done right.
