(Oct. 24) EDEN PRAIRIE, Minn. — The retail world has been turned upside down in the past few years as chains made the switch to centralized buying offices and merchandising operations.
However, Cub Foods has decided to go against the grain, and this decentralization could be a trend that other retailers embrace.
Cub Foods, a chain of 112 corporate and franchised stores owned by Supervalu Inc., adopted a centralized merchandising philosophy four years ago. In mid-October it announced it would split its merchandising team into two groups, Cub East and Cub West, in order to devote a more regional focus to its operations. No definite time frame has been established, but Cub will be working on the new merchandising structure during the weeks ahead with its vendors.
The company’s buying operations will remain in the corporate offices.
Mike Witt, former director of produce and floral retail fresh merchandising for Supervalu, has been named the director of produce for Cub West, which will oversee the merchandising of about 70 Cub stores and operate out of Stillwater, Minn.
Jim Sarcletti, former director of fresh in-store merchandising, was named director of produce for Cub East, which will oversee the merchandising of about 35 Cub stores from a location to be determined.
“We have created separate, dedicated merchandising teams within the Cub organization in order to better meet the needs of our customers in the markets we serve,” said Kevin Broe, vice president of merchandising for Cub Foods, Chanhassen, Minn.
CLOSE TO THE HEART
Being close to the heart of operations does carry some validity. Several retailers, notably Safeway after its entry in the Chicago area with its purchase of the Dominick’s Finer Foods chain, have struggled to satisfy customers.
Keith Horder, president of consulting company Business Visions, Phoenix, and former Safeway executive responsible for centralizing produce, said consumer preferences vary considerably by region.
“Certain parts of the country prefer different sizes of asparagus,” Horder said. “If you to sell jumbo (asparagus) in the Midwest, they don’t care for it. In the West, people are almost the complete opposite, and each area thinks the size they prefer is better. … You can and should cater your merchandising and procurement to get the kind of product the people want.”
Horder said although companies centralize their operations to gain efficiencies and be more competitive with the bigger players like Wal-Mart Stores Inc., Bentonville, Ark., there are a lot of regional players that gain strength by maintaining their regionality.
Dick Spezzano, president of Spezzano Consulting Services Inc., Monrovia, Calif., said Supervalu’s wholesale operations could have been a reason the company decided to decentralize its merchandising team.
“They supply large retail operations. You have to satisfy the needs of those franchisees and the stores you don’t own,” Spezzano said.
Supervalu bought Cub Foods in 1980, from the company’s founders.