Courtesy Nino Salvaggio International MarketplaceCustomers shop in the produce section at Nino Salvaggio International Marketplace’s St. Clair Shores, Mich., location. Despite the recession and a new Walmart Supercenter opening near one location, customer counts are up at all three of the retailer’s locations, said Joe Santoro, area supervisor and buyer.Independent retailers are a thing of the past in some U.S. cities, bought out or pushed aside by the growing wave of chain stores, super centers and club stores.
That’s not the case in the Detroit metro area, where independents continue to hold their own against regional chains such as Meijer Inc. and national brands such as Wal-Mart.
“A Walmart Supercenter went in next to one of our locations about two years ago,” said Joe Santoro, area supervisor and buyer for Nino Salvaggio International Marketplace, St. Clair Shores, Mich.
“What we thought was going to be something terrible actually turned out great. Our customer count went through the roof. It made us look better, and it increased our traffic flow. It’s one of the best things that happened to that store.”
Santoro said that despite the lingering recession, customer counts are up at all three of the retailer’s locations.
“They’re coming in and spending money, but each customer is spending a little bit less than they used to,” he said. “They’re going for something a little less expensive. The dollars per customer is down, but customer count is up.”
Factors for success
Vince Sciarrino, general manager for Vince & Joe’s Gourmet Market — which has stores in Shelby Township and Clinton Township — said a variety of factors contribute to the independents’ success.
“They’re all family-operated and all second generation,” he said. “The families have a passion, and the second generation has carried on that passion.”
The locally based retailers with two or three stores are also more flexible than chain stores, Sciarrino said.
“Chain stores have to have corporate meetings to make decisions and plan,” he said. “If we have something that comes up and is a great buy, our buyers call the store and we can do it. We can adjust at a minute’s notice to what’s available at the market. We can tear down a display and build something new.”
The “market” is the Detroit Produce Terminal. Sciarrino said the terminal, the city’s proximity to greenhouse product in Ontario and the wealth of local product available during Michigan’s growing season give the retailers access to quality product at competitive prices.
“The biggest tool we have is the produce terminal,” Santoro said. “The product that comes through our terminal is second to none in the entire country. Our customers demand good product. We give it to them, and we know how to display it. Our produce terminal allows independent retailers to do as well as we do.”
Benefits for distributors
Likewise, the success of the independent retailers is a boon to area produce distributors, including those on the terminal market, who are usually limited to fill-in business with chain stores.
“We have tremendous independent retailers who market themselves extremely well,” said Michael Badalament, salesman for R.A.M. Produce Distributors, Detroit. “Our wholesalers do very well.”
The independents have to compete with Grand Rapids-based Meijer and national chains such as Wal-Mart, Kroger and Costco.
“We’re aware of our competition,” Sciarrino said. “We’re priced competitively. We don’t skimp on quality. Our buyers are at the market every day at 2 or 3 in the morning.”
Brandon Serra, salesman for Serra Bros. Inc., Detroit, said the independents have a reputation for high-end stores and excellent produce.
“There’s a big difference in quality compared to some chain stores,” he said. “The independents pride themselves on having top-notch stuff. They watch over their stuff like it’s their own because it is. It makes us work harder. You want your stuff in those stores.”
While the independents have earned that reputation for top-notch produce, they don’t necessarily want to pay top dollar during the prolonged economic slump. Jeff Abrash, owner of Andrews Bros. Inc., Detroit, said the local retailers have had to pay more attention to providing value to cost-conscious consumers, and that has made things more competitive at the produce market.
“They’ve had to reinvent how they appeal to consumers,” he said. “There are no gimmees out there for us. There’s no locked-in sale. You have to work for every sale.”
Not going anywhere
Although times are tough in Detroit with double-digit unemployment, Serra is confident the independent stores aren’t going anywhere.
“The independently owned stores have been here forever,” he said. “People come from all over to go to those stores because of what they do. They’re like an anchor in the community.”
Outside the metro area, Meijer is a force with 100 of its 197 stores in the state.
Spartan Stores, also based in Grand Rapids, is close behind with 97 stores in Michigan.
“Wal-Mart and Costco have come in to the area, but people are pretty loyal to the local chains,” said Steve Davis, president, S.B. Davis Co., Grand Rapids.
“That helps Meijer and Spartan, not to say the national chains aren’t doing business because they are, but people here are really more concerned about supporting local business.”
Like the Detroit distributors, Heeren Bros. Inc., Grand Rapids, focuses much of its efforts on serving independent retailers, though not exactly the same type of stores.
“We don’t have the big independent food markets like Detroit,” president Jim Heeren said. “We work with small-town stores in places like Houghton Lake that only have one or two stores.”