Every Wednesday, a group of Shop ’n Save store owners gather at the New Stanton warehouse run by their grocery distributor to talk about cheese, coffee, sirloin, paper towels, watermelons and whatever else looks like it might work well in their weekly advertising fliers.
There are now 100 stores in Pennsylvania, West Virginia, western Maryland, eastern Ohio and upstate New York that carry the name Shop ’n Save, a brand that has been around here since the 1960s. The stores are owned by 49 independent operators — some who own a lot of stores and others just a few — with a heavy concentration in the Pittsburgh area.
The grocers are in it together — and on their own. Together they established a gas rewards program a few years ago to respond to O’Hara rival Giant Eagle’s powerhouse gas offering. Individually, they choose whether to put a bank in a store rather than devote the space to a cafe, or whether to buy up extra Miracle Whip to put on sale in their own stores after the group deal ends.
Together they’ve run a monthly two-day sale that goes up against competitors’ efforts. But the battles against this new Bottom Dollar or that expanded Wal-Mart are more individual — some don’t survive, while others hold their ground.
Even as the number of Shop ’n Save stores overall has grown by 20 percent in the past five years, they’ve watched Supervalu, the Minnesota-based distributor that owns the brand name, struggle to find its own way. In the last couple of years, the distributor has sold off most of its corporate supermarkets and begun focusing on its wholesale business.
Supervalu last week hosted its first ever national sales expo, a three-day event in St. Paul that promised more than 330 booths operated by vendors. “Along with unprecedented opportunities to network and share best practices with their peers, the expo will offer our retailers a one-stop resource to drive sales, build loyalty and grow their businesses,” said a Supervalu executive in a release touting the inaugural event.
Whatever it takes.
“It’s definitely tough,” said Jeff Duritza, who was headed to the trade show last Tuesday and whose family has owned Shop ’n Save stores in the region since the 1970s. “Especially for independents.”
In June, the Charley family celebrated a grand opening at their new Shop ’n Save store in Murrysville. Ray Charley, 63, and his sons, Mike, 33, and Tom, 30, bought the store and remodeled it, then invited local officials and customers in to celebrate.
The family now operates three stores, and their enthusiasm spilled out during a tour of the East Pittsburgh Street store in Greensburg that they remodeled earlier this year. The three men point out this change and that one, talking over each other at times as they shared details.
Seafood selections have grown 200 percent since the remodel. Space devoted to Pick 5 meat deals — customers choose five packages for $19.99 — have expanded from an 8-foot-long case to a 20-foot space with end caps. Walls were pushed back to buy more sales space, with all the work done at night so the store could stay open.
In March, the family launched an artisan bread line with the name Hannah Stone Hearth. A consultant worked with the bakers on making honey whole wheat, sesame semolina, olive rosemary (all $2.99 a loaf) and baguettes ($1.50), among others, from dough that uses natural leavening and takes two to three days to rise.
“Now that’s a beautiful loaf,” said Ray Charley, 63, as he picked up a multigrain loaf and admired the mottled crust. The breads are made daily at the East Pittsburgh Street store and delivered to the family’s two other stores, including one on Route 66 in Greensburg.
The name Hannah won’t mean much to customers, but it’s a nod to the history that makes the name Charley a familiar one in the region’s grocery business. The original Michael “Mike” Charley emigrated from Syria in 1901 and began peddling groceries in the Westmoreland County. Family lore has it that, when asked on Ellis Island for his name, he said, “Michael, son of Charles,” rather than Michael Hannah. So Charley became the family name.
Eventually the founder and his sons ended up selling products wholesale from Derry, where the family lived above the business. In the 1930s, they bought a wholesaler in Greensburg.
“My grandfather had this vision of pulling independent grocers together to combat A&P, which was coming into the market,” said Mr. Charley. Among others, Charley Brothers supplied stores that used the Red & White brand to leverage buying power.
In the early 1960s, the family got control of the Shop ’n Save brand and began a new strategic plan. Stores that signed on saw a different fee and pricing structure. “The only way that would work was if the volume moved up significantly,” said Mr. Charley. “Everybody was invested in this together.”
And growth came, driving warehouse expansions until 1977 when Supervalu bought the wholesale business.
A few years later, Ray Charley decided he wanted to be a grocery retailer. He left his job as a lawyer, worked in some other people’s stores and then bought his first store in 1983 — another generation of Charleys in the business.
Jamiesons keep building
Architectural renderings and blueprints for new stores and small shopping centers fill one corner of Tom Jamieson’s office at the Shop ’n Save on Walnut Hill Road in Uniontown. The store serves as the headquarters of the business that he and his wife, Debbie, have built since 1989.
They own 10 Shop ’n Save stores, 11 Save-A-Lot stores — those are the smaller, discount grocery stores also supplied by Supervalu — as well as some beer distributorships and party supply stores. The stores stretch from Clarksburg, W.Va., to Lawrenceville, which explains why Mr. Jamieson puts between 40,000 and 50,000 miles a year on his car.
In 2013, they replaced three stores and built four others. Later this year, a new Shop ’n Save and shopping center in Youngwood should be ready to open, and they’re on pace to build one store and plaza annually for the next three years.
They tried slowing down a couple of years ago, but that didn’t work. “Deb and I got bored,” Mr. Jamieson said.
The couple met in the grocery business — both worked in the Youngstown area. He was employed for a while as a supervisor for Supervalu, working with independent stores. After one of their four daughters was born with spina bifida, they decided they would need to bring in more income to cover future medical costs.
Mr. Jamieson and a partner put their first store in Fairmont. A few years later, the partners split amicably and began developing stores on their own.
From the beginning, the Jamiesons have found their opportunities in small communities or niche markets, often places that lost supermarkets as the industry moved toward larger stores and supercenters that needed a bigger population base to generate enough sales.
“We get into these small towns and they make things work for us,” said Mr. Jamieson.
“They’re happy to have us there,” agreed Mrs. Jamieson.
Awhile back, they began building Shop ’n Save next to Save-A-Lots. The two types of stores draw different customers, and often those who start at the limited assortment discount grocery will complete their shopping at the traditional supermarket with its deeper assortment of merchandise. Not long ago, they even built a store so the two concepts shared their backroom storage space.
Results vary by store and by years, but Mr. Jamieson said sales at their Shop ’n Save stores have grown an average 2.75 percent annually for the past three years and the Save-A-Lots 1.5 percent.
The Duritza influence
Bob Duritza seems to have outgrown any sibling rivalry that he may have had with his brother, Jeff. “Instinctual. It’s unbelievable,” he said last week describing his younger brother’s feel for the frozen food and dairy markets, among other merchandise areas.
Jeff Duritza is among those on the Shop ’n Save advertising committee choosing the deals to offer in the weekly fliers. He’s also developed a monthly two-day sale just for Shop ’n Save stores owned by the Duritza family — five locations until recently. Last week, they closed on the purchase of a store in Bethel Park from the Sorbara family and were set to close on another in Wilkins a few days later.
Jeff keeps an eye on the commodity markets, works his own stores and talks to employees — email is very helpful these days — to help decide where to place his bets, like the recent order for 1,000 cases of eggs that he expects will do well in an upcoming sale.
Not long ago, Bob said the Shop ’n Save group had a Scott toilet paper offer. “None of my folks were that crazy about it,” he said, which affects how much product gets ordered in for any individual store. Jeff confidently went big.
And, “Jeff was right,” his brother said.
In developing the two different promotional programs, Jeff tries not to duplicate offers. “I’ve got to try to do what’s best for 100 stores and I’ve got to do what’s right for seven stores,” he said.
In addition to the seven Shop ’n Save stores, the Duritza family owns three Foodland locations and a small market that bears the family name. Duritza’s Market in North Belle Vernon was the first store that Bob Duritza Sr., now deceased, bought in 1973 after working for the Kroger grocery chain.
Tom Jamieson, the Uniontown Shop ’n Save owner, actually worked with some of the Duritzas’ stores as a Supervalu representative before getting his own locations, Bob Jr. and Jeff said last week, as they talked about the business in the upstairs break room at their Canonsburg store.
The connections between the store owners — and their shared experiences – help the independents play above their weight.
“That is one of the strengths of the Shop ’n Save group,” said Bob, calling out a New Castle store owner’s expertise in meats in addition to his own brother’s skills in developing competitive deals.
Brothers Bob, 54; Jeff, 52; and Scott, 47, all work in the business, as do their wives and some of their children.
Sales in the Shop ’n Save stores have grown about 3 percent annually for the past eight years, Jeff said, even allowing for head-to-head competition that popped up in certain neighborhoods.
The next generation
In July, Supervalu reported first-quarter net sales of $5.23 billion, down 0.1 percent from the same period a year ago. Sales in Save-A-Lot stores that have been open at least a year rose 5.6 percent. Net sales in the company’s independent business operation fell 2.6 percent to $2.4 billion, mainly because of lost accounts.
In a report to investors, Wolfe Research analyst Scott Mushkin wrote, “We continue to believe management is implementing the right strategies as the company works to improve business fundamentals.”
Mr. Jamieson gave a similar assessment, saying new leadership has produced better ideas. “I have definitely seen it in the Save-A-Lot side,” he said, and he hopes for continued improvement for the owners of independent stores that use the wholesaler.
He and Debbie were set to fly out last Tuesday to attend the event for independent retailers, as was Jeff Duritza. The majority of the store owners’ wholesale purchases come through Supervalu, although they also source from other vendors.
Business strategies change over the years, and the Shop ’n Save group has both benefited from and been buffeted by such changes. More than one store owner cited decisions by major players like Kroger and Thorofare to pull out of the Pittsburgh area three decades ago as helping give independents room to grow.
The Duritzas, who now employ about 800 people at their Shop ’n Save stores, said wholesaler Charley Brothers helped their father buy his first store. “They were willing to co-sign for people like my dad,” said Bob.
With a group of independent owners, issues of store reinvestment and retirement can be tough to sort out. Everyone needs their peers to keep the brand image strong, but they also understand succession issues are challenging.
“The competition is growing,” said Mike Charley, whose three family stores employ more than 200 people. “If we don’t reinvest, you have the potential to become one of the casualties.”
Then there’s the issue of birthing a next generation of store operators, especially helping those who don’t have family in the business. The Jamiesons, who now employ about 1,000 people, have begun selling stores to experienced staff members and financing the deals.
“We do look at how to transition and reward people,” said Mr. Jamieson, who is 60. “They’re all much younger than we are.”
Teresa F. Lindeman: email@example.com or at 412-263-2018.