Yellowfront Grocery...why we are different from the 'big boxes'!
Independent grocery stores in the United States have been failing at a rate of two per week. They're being replaced by big box stores, who spend huge amounts on their real estate and flashy buildings. The stores lure customers into their stores by dropping prices on key items in order to create high volume sales. However, with their attention fixed on high volume sales, they lose sight of individual shoppers. In order to off-set their expenses they need to keep labor costs low and personalized customer service suffers.
In Damariscotta, Maine, Jeff Pierce's response is to hold to a course set eighty years ago when his grandfather, Linwood, founded Pierce's Meats on Damariscotta's cozy main street. His basic strategy is as simple, and as complicated, as getting to know his customers. It's working. As Jeff and his brothers have succeeded their parents, their Yellowfront Grocery store continues to thrive, a small feat when only one in ten family businesses survives into a third generation. When a shiny chain store had appeared just up the street, Yellowfront did something unexpected: It survived. By focusing on the needs of one customer at a time, the Pierce family has held its place in the community.
The whole story about Yellowfront is about not putting a modern twist on anything, says Jeff. He has not, for instance, joined the statewide organization of socially responsible businesses(because he has always been one). He has not added a selection of grape leaves or organic wines to lure young gourmands. He does not let industry trends set his course
Jeff's innovation is to stick to the business practices of a century ago. That works just fine, most of the time. Five hundred charge accounts, some opened in 1921 and inherited like wedding silver, are tallied and billed each month. "We tried to charge interest once," Jeff chuckles. "It didn't go over well." The store up the hill chastens check bouncing patrons with a computerized blacklist. Jeff Pierce simply tapes hand-written notes to his cash registers: "Have so and so come see me." In a glaring departure from modern merchandising science, Jeff does not force his customers, many of whom are elderly, to navigate the entire store before they reach the staples aisle. Jeff left a shortcut in the new floor plan allowing customers to steer directly for basic staples. For the same reason, the store is intentionally small, and the parking close.
There are challenges, however. "It's more of a struggle every year," Jeff says soberly. "It's harder and harder to compete in terms of wage and benefits, especially with today’s health care crisis. I can only do so much. I'm concerned for the future. Yellowfront also is at a disadvantage versus the big boxes as they often sell items like turkeys at a loss, knowing they can more than make it up on items that customers don’t check the price on. “I really don’t like playing those price games as I know if I sell something way below cost, I have to overcharge on other items to make it up and that isn’t being straight with my customers” says Jeff.
And why does all his time consuming and unscientific backwardness translate into success against grocery chain Goliaths? It's not even about scale, Jeff says. "The grocery business is about winning one customer at a time," he says. "People can get groceries anywhere now, even at gas stations. So you have to give people a reason to come to your store. While our meat, deli and produce prices are often lower than the big boxes, I can't compete and don’t want to play the loss leader bait and switch game that the big boxes do. But I know my customers by name. We pay attention to what they need. A thousand people a day shop at Yellowfront Grocery. Jeff believes that he knows 800 of them by name. "The other 20 percent I may not know by name, but I recognize them," he says with a proprietary pride. "They're my customers."