PARSIPPANY, N.J. - Even the well-to-do gourmands of suburban New Jersey appreciate good bargains.
That appears to be at the heart of a remerchandising strategy at Kings Super Markets, the 26-store upscale chain, based here, that was acquired by two private equity firms earlier this year. Now that they have Kings headed in the direction they want, the firms also are eyeing expanding it through small acquisitions.
In an interview with SN, Bruce Weitz, the chain's new president and chief executive officer, said Kings' strategy is summed up in its new ad slogan: "From Every Day to Fabulous Gourmet, Expect the Unexpected."
"Really, what that says is, we have the Coke and the Tide, and we have yak," he said.
The chain, which had $409.5 million in revenues in the year that ended April 2005, captures about 1.5% of New York-area supermarket sales, according to Tucson, Ariz.-based Metro Market Studies. Its new positioning comes as rival A&P is attempting to go more upscale with many of its stores and as Whole Foods Market expands its presence in the market.
During a visit to one of Kings' recently remodeled stores in Cresskill, N.J., just a few minutes from New York City, the company's focus on high-end specialty items and price-oriented specials on grocery items was evident.
Endcaps labeled with "hot prices" signs overhead called attention to displays of Viva paper towels, 10 rolls for $10, and snack foods, bottled water and other specially priced Center Store products, while the perime-ter was stocked with such high-end fare as truffles for $29.90 per one-third ounce, ostrich eggs and Kobe beef.
Much of the focus of the remerchandising effort, Weitz said, has been on infusing the perimeter of the stores with unique specialty items and more service-oriented features.
"We're offering more compelling and differentiated perishables departments," Weitz said. "In the deli, for example, we have a completely different look from our competitors, in the way we merchandise and the products we carry. We've got hams carved off the bone, and not only rotisserie chicken but turkey and duck as well. We've got an international cheese department with more than 400 varieties of cheese."
The perimeter of the Cresskill Kings looks more like an upscale Manhattan gourmet food store than a typical suburban supermarket. Each department has a store-within-a-store presentation, featuring a beefed-up staff of freshly trained service personnel.
In the deli area, where many of the changes have taken place, dried meats hang from the ceiling, and a curtain of dried pasta of various colors serves like an international flag over the cheese counter.
Kings' bakery features Bindi gourmet desserts imported from Italy and breads brought in daily from several well-known New York bakeries, including Eli Zabar, Sullivan Street Bakery, Pan D'avignon, Tribeca Bakery and Balthazar's. The Cresskill store also finishes a few items in-house, including par-baked breads and cannolis.
Throughout the perimeter, signs called attention to the new products and expanded selection, such as dragon fruit in the produce department, merchandised on wooden barrels, and Tobago Wild hand-caught red snapper. In the meat area, Kings merchandises Kobe beef steaks at $34.99 per pound and such exotic offerings as dry-aged beef, yak, ostrich, elk and venison.
Even in Center Store, Weitz said, Kings features a heavy emphasis on specialty items, with products such as truffle-infused olive oil and Sarabeth's preserves merchandised alongside the everyday-low-price specials.
In addition to the increased emphasis on price and selection, Weitz said the company also has beefed up its service levels to help distinguish it from other local operators.
"We've got more people in the store, and a new awareness about how to treat customers," he said.
Another area that Kings' new ownership has focused on is the print advertising circulars. The glossy, full-color fliers tout the price specials and the breadth of the product offering, with front-page illustrations of such produce as heirloom tomatoes, Longan fruit and rambutan, alongside 12-packs of Coke at four for $10.
"We have both ends of the spectrum, and at the upper end we have things which you would only be able to buy at Balducci's, Grace's Market, or Agata and Valentina in Manhattan," he said, citing three of New York's gourmet food shops.
Weitz declined to discuss Kings' recent sales figures, other than to say the company has been "happy" with the chain's performance since the acquisition in April. He also declined to disclose the total investment in the upgrade of the Kings stores, which has so far been applied in varying degrees to about a half-dozen locations.
Angelo, Gordon & Co. and MTN Capital Partners paid $61.5 million for Kings, which London-based Marks & Spencer had been seeking to sell for several years.
The new owners may now be looking to add more stores to their portfolio, Weitz said.
"We are in the market to grow the company in a number of ways," he said. "One way is to build comp-store sales; another way is to remodel and open new stores; and the third way is acquisitions, whether it is one, two or three stores at a time, or small chains, within or adjacent to our marketplace."
He said he does not envision Kings taking part in any consolidation among the larger chains in the area - Pathmark and A&P have been the subject of much speculation - although he did say such mergers could make some stores available for Kings to acquire.
"If two big companies get together, there's always some fallout, and we would look for those opportunities," he said.
