In Former Gemco : Lucky’s Chain to Test ‘Food Store of Future’
San Diegans will get a chance to shop in a grocery store of the future when Lucky Stores opens its first “new concept” store early next year in the shell of a former Gemco store on Balboa Avenue near Interstate 805.
Lucky, which operates the Food Basket grocery chain in San Diego County, has declined to describe the so-called “breakthrough” store which will occupy slightly more than half of the 100,000-square-foot building.
But according to grocery industry analysts and consultants, the new Lucky store will use merchandising techniques similar to those that have trimmed operating costs at retail “warehouse” stores. Contra Costa County-based Lucky is also expected to incorporate flashy display and merchandising concepts aimed at attracting more affluent shoppers who prefer, for example, the Irvine Ranch Market.
In keeping with the industry-wide belief that “bigger is better,” the new grocery will boast 60% more selling space than average, existing Lucky stores. That extensive retail space will eliminate the need for a large storage room at the back of the store, according to analysts.
2 Additional Stores
The chain expects to open two additional “breakthrough stores” in San Diego and perhaps five new units each year system-wide if the concept proves successful, according to a recent article in Supermarket News, a trade magazine.
The as-yet unnamed store will be “something new and different for us,” said Lucky spokeswoman Judy Decker. “We’ll have all kinds of snazzy things . . . (including) all the tools and concepts that will increase productivity and operating efficiencies, which will result in lower prices for consumers.”
Lucky will test the concept in San Diego because “you can control the media (costs) better there than in an area as spread out as, say Los Angeles,” according to the Supermarket News interview with Lucky Vice President Jerry Fahey.
Lucky’s new warehouse emphasis will mean that shoppers probably will be grabbing cereal boxes, soup cans and other commodities from stacks of “half-cut boxes” rather than plucking them from neatly stacked shelves, according to John Kosecoff, a grocery industry analyst with New York-based First Manhattan Co.
Techniques for Efficiency
“There are a lot of techniques that can be implemented that will have their payoff in customer service and labor efficiency,” Kosecoff said. “And today, labor efficiency is the key.”
The new store probably will incorporate a state-of-the-art inventory control and pricing system, according to analysts.
“You’d be surprised at how unsophisticated the grocery business is” when it comes to harnessing computer-controlled technology, according to Dan Raftery, an industry consultant with Chicago-based Willard Bishop Consulting.
Lucky is studying a sophisticated, electronically controlled bar code system that would replace standard paper bar codes now used to control pricing, according to Decker.
Connected to Shelves
A chain in Canada reportedly has tested a computer-controlled system that uses electronic displays on shelves to store pricing information. That system is connected to a computer capable of posting immediate price changes--a quicker and more error-free method than sending clerks into the aisles to change bar codes for sales or special promotion.
“You can see the obvious benefits of connecting the shelves, the check-out counters and the purchasing department,” one analyst suggested.
Any cost-cutting and labor-saving devices that are showcased in Lucky’s store of the future will share the spotlight with whatever merchandising advances that Lucky utilizes to boost specialty item sales.
“Lucky’s challenge is to provide better customer service (found at high-end stores) and blend it with competitive warehouse-type pricing,” according to Kosecoff. “They have to create excitement . . . like the Pavilion store that Vons opened, or the Irvine Ranch Market.”
New Merchandising Methods
Those stores have concocted attractive designs and innovative merchandising techniques to draw shoppers, Kosecoff said.
Along those lines, Lucky has indicated that it will “showcase” the preparation of its perishables, including deli and bakery items. Lucky also promised analysts that its various departments will be upgraded to make what a spokesman described as “merchandising statements.”
“Supermarkets historically have done little more than lay out their produce in commodity fashion,” according to Kosecoff. “There will be people who continue to operate small stores and who simply stack potatoes on top of potatoes. But others will be visually active.”
Lucky, which will be leasing the space from a Los Angeles-based real estate developer, expects the store to be successful because the building had been a Gemco store known to shoppers for its low prices. The developer acquired the building along with a handful of other Gemcos from Target, which had acquired 80 of the now-defunct discount company’s stores. About 40,000 square feet not used by Lucky will be occupied by a sporting goods store.
