WHITE BEAR LAKE, Minn. -- Kowalski's Markets has slowed down time and speeded up sales at a remodel here that combines early 1900s decor with trendy features such as ready-to-go gourmet meals and a cappuccino bar.
The interior of this refurbished store, which had its grand reopening April 14, is designed to evoke a more peaceful, bygone era.
At the same time, new amenities, including chef-prepared meals in dual-ovenable containers, easy-to-eat panini sandwiches and an organic salad program, address the needs of today's consumers. And they are generating sales that top projections, company officials said.
"We've just about doubled the space we devote to fresh foods since we remodeled this store. We took out an entire gondola of dry grocery to make room for more higher-profit fresh items," said Jim Kowalski, chief executive officer and co-owner of the company, which also operates another Kowalski's Market in St. Paul and a Cub Foods Store here.
No grocery products were eliminated, but stockkeeping units were greatly reduced, particularly to make way for more deli and bakery items. The mix of products in both those departments has been nearly doubled, said Terri Bennis, director of deli-bakery for all Kowalski's stores.
Bennis said she expects that once "deli season" begins -- when the lake opens for boating and swimming the middle of this month -- sales will climb so much that both departments will double the percentage they had been contributing to total store sales; before the remodel, those percentages were 3% each.
Now, about a third of the store is devoted to fresh foods, and only about 35% of store sales are rung up with dry groceries, compared with 50% in the past, Kowalski said.
Before the remodel, the unit looked like a conventional small-town grocery store.
Things have changed. Now, the first element inside the entrance is a cappuccino bar, with a menu of interesting beverages that includes a "Chocolate White Bear" made from espresso, milk and chocolate syrup. Shiny brass fixtures are a visual draw, and the aroma of fresh ground coffee mingles with that of fresh baked bread and cookies in the adjacent in-store bakery.
The bakery's positioning there is a drastic change; previously, it was located in the last aisle alongside the deli.
"We wanted to be the first in the area to try bakery up front. The warmth and aromas of the bakery and coffee bar together, I think, put customers in the right frame of mind," Bennis said.
The positioning allows her to cross-merchandise gourmet teas, scone mix, jams and lemon curd in an antique-look hutch in that area. Originally thought of as just another warm touch, the hutch has become a sales draw, with items so hot "we have to keep restocking it all the time," Bennis said.
People even want to buy the decorations. "They ask if the old-time coffee grinders are for sale, and we've sold some of them. We've also sold a couple of model sailboats that were part of the decor. We don't mind. We sold one of the sailboats for $120. It was a nice mahogany one," Kowalski said.
The store's comfortable ambiance was deliberately designed to promote lingering, and apparently it appeals to all ages. Kowalski said he overheard a little boy say to his mother, "Mom, I think we ought to live here."
Two fireplaces, several casual seating areas with comfortable chairs, and windows facing onto the lake, also set this store apart.
"Our niche here has been 'your community market' and I think we've strengthened that niche with decor that shows our ties to the community. The photos and decor reflect the history of White Bear Lake. It was a very popular resort at the beginning of this century. We designed the store interior to look like a lake lodge or summer home. We've used a lot of wood and stonework, and murals show photographs of schools and churches here in the 1900s. That gives everybody a feeling of belonging," Kowalski said.
"It looks like a lodge. I haven't seen anything like this in a store anywhere in the country. People here are really jazzed about it. The Kowalskis recognize their market niche real well, and are making the most of it," a local observer told SN.
Gary Zimmerman, regional president of Minneapolis-based Supervalu, which supplies Kowalski's, said, "It's an exciting store, a good example of what an independent can do. With their deli programs, they're really going after the [meal] business that supermarkets have been losing."
Bob Kowalski, director of marketing and loss prevention, said he thinks the chef's meal program gives Kowalski's a serious lead in the market.
"The quality is great. With those items, we're competing with the finer restaurants. People want a good meal but they don't want to spend the money to eat out in a restaurant," he added.
The meals are merchandised in an unusual location -- at the very end of the traffic pattern, in an 8-foot by 6-foot shoparound case. They are not sold anywhere else in the store.
"We thought this would be a good spot for them visually. We figured they would be impulse buys, and they are," said Bennis. "One woman said she was taking one to her mother who lives alone, and others just pick them up because they look so good. Then they come back for more."
It must be working, because they're selling at a rate of 150 to 200 a week, she added.
The dinners are chilled. "My philosophy is that if you buy a dinner hot, it's cold by the time you get it home. You'd have to heat it up again anyway," Bennis said.
Most of the dinners -- developed by Kowalski's two newly hired chefs, who are at this store -- are prepared at a central facility a few miles away. The dinners have a four-day shelf life. Referring to their placement in the store, Bob Kowalski said the meals were specifically placed there to attract people after they have done the rest of their shopping.
"They might have made a meal decision by the time they get to them, but it won't be anything they can't put in the refrigerator or freezer for later. If we had put this great-looking display near the entrance they might have just grabbed one and not shopped the rest of the store," Kowalski said. "It's an experiment," he conceded.
But it's working so well here, he's currently trying to figure out how they can do something similar at a Kowalski's unit on Grand Avenue in St. Paul. There, the dinners are in a shelved case, in-line with the deli. "They're not doing as well there," conceded Bennis, perhaps because people don't see them.
The roster of upscale dinners includes pot roast, London broil, center cut pork loin with pineapple glaze, rotisserie turkey and rotisserie chicken for $5.95. New York strip steak and prime rib dinners are $7.95. All include potatoes and baby carrots as sides. Those vegetables were chosen because they hold up well and because they don't overcook easily in a microwave oven, a store-level source said.
The runaway best-seller here is the prime rib dinner, and the runner-up is turkey, according to Marcia Shively, deli manager at the store.
The store plans to add varieties to the dinner menu. The next up will be ham, Shively said. Panini, launched at this store, is also a hit.
"On a weekend, we're selling them just as fast as they can be grilled," Bennis said. "One day last week, we went through 18 of just one of our varieties of focaccia and we get six panini from a focaccia." They're $4.99 a pound.
Other deli items added here are entree salads developed by chefs Adrian Fletcher and Patrick Nickelson. The new entree salad lineup includes chicken Caesar salad and rotisserie turkey julienne strips on exotic greens with fat-free tomato basil dressing. Both are $4.99. There is also a grilled chicken salad on exotic greens with raspberry vinaigrette dressing for $5.99.
An organic salad program is another addition here. One of the best sellers in that category is kashi salad, which contains green onions, celery, dried cranberries and raisins with an apple cider based dressing, a store-level source told SN.
