In positioning itself to compete in the future, Giant Food Stores looked to its past.
The Carlisle, Pa.-based supermarket chain, part of Ahold Delhaize USA, marked its 95th year last October by announcing a new store concept called Giant Heirloom Market. At less than 10,000 square feet, the urban format reflects the heritage of the original Giant Market — a local store catering to the unique needs of its neighborhood — while bringing the engaging food shopping experience demanded by today’s on-the-go, digitally savvy consumers.
Giant President Nicholas Bertram noted the historical connection when unveiling plans for the first Heirloom Market, in Philadelphia’s Graduate Hospital district, at an event in the city’s Dilworth Park. “As we celebrate our 95th anniversary, we can’t help thinking about the next chapter in Giant’s story,” he said.
Yet that narrative was already well under way at Giant. In a bustle of activity over the months before — and since — Heirloom Market’s introduction, the Mid-Atlantic grocer has made acquisitions, upgraded stores, opened new locations, launched a new e-commerce concept, piloted robotics, brought online grocery delivery and pickup to most of its stores, and announced a new customer loyalty program, among other initiatives.
Giant’s sweeping strategy shows a retailer committed to its customers and well in tune with what it takes to grow and innovate in a highly competitive market. The company also stands as an example to its peers in a fast-changing industry.
For its efforts, Giant Food Stores has been named as the Supermarket News 2019 Retailer of the Year.
“Considering our past and spending time engaging with previous leaders who I admire — like Allan Noddle or Carl Schlicker, some of the really great leaders of Giant — you find out who Giant is and what it's about. And one of the things that really stood out to me was innovation,” Bertram told SN in an interview.
“Giant has been an innovative company and competitively intense, always fighting hard for every sell, every week, and with a real connection to the community,” he explained. “So learning about our past and doing the research to find out where the customer is today and where the customer is going to be tomorrow, it gave us a platform to come up with a growth strategy that activates things in our heritage and at the same time positions us to win in a fiercely competitive market.”
According to Bertram, Giant’s strategy began to crystallize last year after Ahold Delhaize completed its post-merger integration, which solidified the U.S. operating model of strong, local supermarket brands leveraging the global food retailer’s scale and resources.
“2018 really was a year of rebuilding and putting things together, and then 2019 has been the year of, ‘Let’s go,’” he said.
More and better stores
A cascade of store openings, remodels and additions over roughly the past year-and-a-half has bolstered Giant’s brick-and-mortar retail network, which now numbers 181 stores under the Giant, Martin’s Food Markets and Giant Heirloom Market banners in Pennsylvania, Maryland, Virginia and West Virginia. The store base also includes 132 pharmacies and 102 fuel stations.
Giant’s home state of Pennsylvania, which now has 158 pf the stores, has been the chief focus. In June 2018, the retailer unveiled a $22 million investment for Lancaster County including four store remodels, a new fuel station and the transformation of its North Reservoir Street store into an e-commerce hub. That project built on a $70 million plan in Pennsylvania, announced in April 2018, for six new locations, two store upgrades and four new fuel stations over the next two years.
Earlier this year, the expansion drive brought a first for Giant: six store openings in four states on the same day. Opened on April 5 were Martin’s stores in Smithsburg, Md.; Greencastle, Pa.; Berryville, Va.; and Hedgesville and Martinsburg, W.Va. — all former Shop ‘n Save stores acquired from Supervalu in February — plus a brand-new Giant store in Warrington, Pa., that replaced a store in Jamison, Pa. Next came openings of a new Giant store in Walnutport, Pa., which had lacked a supermarket for several years, and a replacement store in State College, Pa.
“We’re focused on all four states. It's really the I-81 corridor. When you look at Virginia, West Virginia and Maryland, that's where the Martin’s brand originated and is pretty strong. And then in Pennsylvania, we were born in Carlisle, so central Pennsylvania means a lot to us. The largest market for us is Philadelphia. That’s a very important DMA [designated market area] that we’re putting energy into. And in the northern parts of Pennsylvania — Scranton, Wilkes-Barre, Williamsport, etc. — the Giant brand means something there as well,” Bertram explained.
“Our desire is to get to the No. 1 or No. 2 share spot in every market we compete in,” he said. “So we need a more robust network in order to do that.”
Acquisitions are helping Giant get there. Besides the Shop ‘n Save stores, the company announced a series of independent supermarket purchases in Pennsylvania’s Lancaster County, including Musser’s Markets (stores in Lebanon, Columbia and Quarryville, Pa.) in August, Ferguson & Hassler (a store in Quarryville) in May and Darrenkamp’s (a store in Lancaster’s Willow Valley) last September. The Darrenkamp’s, F&H and Musser’s stores became part of the Giant banner.
“We've been doing everything that we can to be in the communities that want us. That's come about through acquisitions, new stores, expansions and remodels,” said Bertram. “There are a lot of different ways that we have deployed capital and the ideas of our merchants to grow the store network.”
Making a splash in the big city
New kinds of sites are in the offing as well. In fall 2020, Giant plans to open a 65,000-square-foot Giant flagship store in the River Walk project, an 8.5-acre, mixed-use development in downtown Philadelphia along the Schuykill River. The property encompasses two residential towers plus commercial, retail, hospitality and community space.
Bertram said the location, at 23rd and Arch Streets, will be Giant’s first two-story store and its second supermarket in the city. It has operated a Giant store on Grant Avenue since 2011.
“It will be our largest and most ambitious project in the city, without a doubt,” he said, adding, “And I'm really proud to bring what I would call suburban prices into the urban core. We did that with Giant Heirloom Market, and we’ll do that with the Giant River Walk as well.”
Giant River Walk will feature high, open ceilings and a glass-lobby entrance. An outdoor terrace will provide a scenic setting for customers to enjoy food with a glass of wine or beer, and shoppers will have exclusive access to an on-site parking garage. Giant said the store also will house a “breathtaking produce marketplace,” offering more than 600 varieties of fresh fruits and vegetables, as well as the retailer’s largest plant-based foods department
“I think we've demonstrated that we have flexibility and dexterity in the way that we build supermarkets,” Bertram said. “For any site that makes sense for the customer, we have a team that can find a way to innovate and put a Giant experience there.”
Heirloom Market epitomizes that customer-centric approach and gives Giant a vehicle to expand deeper into population-dense, lucrative urban areas.
“The Grant Avenue store has been really important to us and was our first supermarket inside Philadelphia proper. As we studied the customers here, it became pretty clear that there are spots where you need a walk-up, smaller-format solution. That's why we invented the Giant Heirloom Market concept, which is hyper-fresh and has an assortment curated for the people in the neighborhood,” Bertram said.
Four Heirloom Market locations have been announced for Philadelphia thus far. The first, a 9,500-square-foot store, opened Jan. 25 at 2303 Bainbridge St. in the downtown Graduate Hospital neighborhood. That was followed on Aug. 2 with the opening of a 9,950 square-foot unit in the city’s University City section at 3401 Chestnut St. Opening this fall in the Northern Liberties neighborhood will be an Heirloom Market at 1002 North Second St., across from Schmidt’s Commons, a public plaza with boutiques and restaurants. The Queen Village location, at 201 South St., is due to open by the end of 2019.
“This format being in Philadelphia is a huge initiative. The strategy isn’t just to figure out Philadelphia, but how do we get into Philadelphia and do it in a big way? So this is our first real foray into it. We've been around for over 95 years and have been on the periphery,” said Paul Madarieta, director of growth initiatives at Giant. “Being able to solve the urban customer is also something that is part of this project. We're starting to understand a little bit more. We did close to six to seven months’ worth of research to start understanding that customer.”
Much smaller than a conventional Giant supermarket, Heirloom Market stores are designed to fit into compact urban spaces and offer shopping experiences tailored to the neighborhoods they serve. For example, the University City location — adjacent to Drexel University and the University of Pennsylvania and near the area's hospitals — serves large populations of students, faculty and administration. As a result, it has an ample selection of grab-and-go meals for breakfast, lunch and dinner that can be taken to school or work, eaten in an in-store gathering area with fellow students or colleagues, or taken home. It also accepts payment by the Drexel DragonCard.
Other features include a plethora of fresh, local and seasonal foods along with center-store staples and natural/organic products from Ahold Delhaize USA’s Nature’s Promise brand. An on-site produce chef can cut fresh vegetables and fruit on demand, and customers can taste new flavors at a sampling station. There’s also a curated selection of craft, imported and domestic beer and wine; a sizable plant‐based food section; local artisanal breads; fresh-made sushi; kombucha on tap; a do‐it‐yourself olive oil and vinegar blending station; and offerings from Philadelphia‐area food vendors.
Tech-savvy customers will find self-scan stations, mobile checkout and “endless aisle” service. Items not available in-store can be ordered online via an iPad for next-day pickup or delivery.
“With these four sites that we're starting out with, that will give us the fact base to go out and take this concept to other neighborhoods,” said Bertram. “I think that it is a concept that could work in other cities.”
Angel Cordero, store manager for the first Heirloom Market and now in the same role for the second, called Heirloom Market “a brave endeavor.”
“Giant Heirloom Market brings something that's totally unique. It took a lot of courage from the leadership at Giant to say, ‘You know what, we're going to give this a shot. We're on the outskirts of Philly. Why not go into Philly and give the customer something different?’ So Giant Heirloom Market has a bright future, and I don't see anything stopping us.”
More in store for Giant shoppers
Inside Giant and Martin’s stores, fresh departments have led efforts to enhance the shopping experience.
“In the fresh areas, we are most proud of our produce departments,” said Bertram. “They get a lot of space, they get a lot of love and new fixtures. We have a really strong relationship with local growers in the Mid-Atlantic region. And produce is an area where you see a lot more innovation and new things, particularly convenience fruit and vegetables. In the deli and kitchen area, we've expanded our meal solutions and ready-to-eat foods. There are different meals at $5, $7 and $8.”
Giant also has expanded its gourmet cheese program, including an exclusive relationship with Caputo Brothers Creamery of Spring Grove, Pa. Giant worked with Caputo and brewer Tröegs of Hershey, Pa., to produce Troegenator Beer Cheese, available for a limited time only at Giant, Martin’s and Giant Heirloom Market stores.
“Going around the store, in the meat department we have expanded on our organic range quite a bit. Nature’s Promise is a very strong brand in poultry and beef and continues to be,” said Bertram. “Seafood is also an area that's gotten a lot of focus recently, and we've added some new items in there.”
In early August, Giant opened its 100th Beer & Wine Eatery in Pennsylvania. The eateries include hundreds of domestic, imported and craft beers plus a large wine assortment and seating for 30 people, who also can choose from a selection of eat-in and take-out foods, such as sandwiches, wraps, subs and salads.
“We sell a lot of food that you can eat right on the spot, such as sushi, Boar’s Head sandwiches that are really nice and hot prepared food bars. We have Asian bars now and some other things,” Bertram said. “So anything that's for quick consumption we will merchandise in the area of beer and wine.”
Giant stores, too, are getting an extra hand in operations. As part of a partnership between Ahold Delhaize USA’s Retail Business Services and Badger Technologies, googly-eyed robots named Marty have been rolled out to all Giant/Martin’s stores, except the two Heirloom Markets. Marty flags hazards such as liquid, powder and bulk food-item spills as he navigates the aisles and reports when cleanup is needed, freeing store associates to spend more time serving customers.
“Marty phase one is now fully deployed and making our stores safer for customers,” Bertram said. “Now our team is working with the IT group for the next phase, which will unlock more capabilities that we're testing. Marty will do more than just look for spills.”
Pumping up e-commerce
In tandem with stores, Giant is extending its reach with a new e-commerce brand, driven by Ahold Delhaize USA’s Peapod online grocery arm. In January, the grocery chain unveiled Giant Direct Powered by Peapod, which replaced the Peapod by Giant branding. (The brand is Martin’s Direct for Martin’s stores.)
“Creating the Giant Direct sub-brand inside of our family was a way to give even more credibility to what the customer is experiencing,” Bertram said.
Giant Direct also is the banner for a new online fulfillment concept. In February, Giant opened a 38,000-square-foot e-commerce hub in Lancaster, Pa., that serves as a central shipping location for online orders in the region. Local customers also can place orders on-site on iPads inside a walk-up vestibule. Parking spaces labeled “Pick Up Here” let online customers drive up and have their orders brought to their cars, and fresh lockers in the vestibule hold items ready for curbside or pedestrian pickup.
Giant said the new hub will enable it to serve about 40% more households in the area with online grocery delivery or pickup. The company has four other e-commerce facilities, located in Camp Hill, Coopersburg, North Coventry and Willow Grove, Pa.
In July, Giant Direct reached availability at 100 stores, and just weeks later Bertram said the service was poised to surpass 90% coverage of the retailer’s footprint. Giant also uses Instacart same-day delivery in some markets, and earlier this year the grocer began working with Deliv to enable same-day service from Giant/Martin’s stores in areas where only next-day service had been available.
“What we see is that our customers like to use all three channels,” Bertram said, referring to delivery, pickup and brick-and-mortar. “We want to be able to answer each of those different needs, and e-commerce enables that. We're working diligently to go from being multichannel to omnichannel.”
More rewarding shopping experience
Going forward, a key driver of Giant’s omnichannel efforts will be Giant Choice Rewards, a new loyalty program unveiled in early August. Bertram said Choice Rewards maintains the benefits of the retailer’s current loyalty offerings — Giant BonusCard, Gas Extra Rewards and Bonus Buy Savings — but joins them under one brand in a seamless digital experience.
Customers also get new ways to earn and redeem points. As before, loyalty members earn one point for every $1 spent and can redeem points for fuel discounts (10 cents for every 100 points up to 25 gallons) and earn free gas. Weekly circular promotions enable customers to earn extra points for purchases as well. But with Choice Rewards, customers also can earn points via personalized monthly basket offers, personalized weekly category offers and monthly semi-personalized, category-specific offers.
New ways to redeem points include dollars off the shopping basket ($1 for each 100 points) and free products with point redemptions. Customers, too, can redeem vendor coupons for points instead of money off products. Personalized offers and rewards earned can be tracked on the Giant and Martin’s apps, where shoppers also can load digital coupons, activate Deli Order Ahead or place a Giant Direct order.
Choice Rewards is being tested with shoppers in a western Pennsylvania market under a pilot launched in June. Giant is targeting a full launch to customers by the end of this year.
“We're very encouraged by the first market where it has gone out. We've seen better engagement. We've seen new customers and people who had the BonusCard but weren't engaged digitally. They're now converting over, which gives us the chance to personalize their experience even more,” Bertram said. “It's really important for us to get that right. As we work towards being an omnichannel retailer, it's even more important to provide that same experience whatever way that customers are shopping with us.”