The uber-competitive grocery industry keeps evolving rapidly, as established chains sell stores or go out of business and fresh new companies sprout up. Through all this change, Arlan’s Market has been growing steadily since 1991, expanding from the original store in Nassau Bay near Houston to Austin and San Antonio.
Now with 13 stores – many of them acquired – the increased scale helps lower costs. “I think we’ve had a lot of time to figure out how we want to run our business before we took over these stores,” Vice President and General Manager Nick Arlan says. “Then when we took over these stores, we were able to take some things from them and implement them into our existing stores.”
These included office software and pricing procedures. “There was some software they owned that pointed us in the direction as far as getting more accurate billing for things that require scan data,” Arlan says. “We ended up buying a better piece of software that would help us with our billing and be more effective on those types of things.”
Arlan’s Market had one person doing product pricing for the entire company, but when Arlan’s acquired its Hill Country stores, it retained the employees that already were doing the pricing. “By letting them take over and using their item file, it really helped these things in the Gulf Coast area,” Arlan says.
Resetting and Remodeling
When acquiring a store, Arlan’s Market extensively resets it, and when necessary, remodels. “Resetting means selling more categories and greater variety,” Arlan explains. “We also added new checkout lanes to all the stores. That’s one of the main things we’ve always been concerned about is not letting people wait in line. Then anything that we felt was outdated as far as the way that the store was laid out, we changed that, adding new shelving where we needed it.
“Most of the stores got new refrigerators and new frozen section doors,” he continues. “Lots of these stores were limited on their frozen and refrigerated areas, so anywhere that we could, we added freezers to expand on that. That’s another category I feel is growing a lot. That category is definitely an area where the stores that we bought haven’t been updated in a long time.”
Craft beer sections in the stores were expanded, along with specialty items and choice Angus beef. New layouts and coolers also were implemented in the produce departments, upgraded LED lighting and freezers with doors that closed. These changes have reduced the electric bills of the stores substantially, Arlan reports.
Arlan’s oldest location, Seabrook, was remodeled about three years ago. Approximately 10,000 square feet was added to it and the store was completely remodeled. A full-size deli with customer seating was included along with a bakery and rotisserie chicken department.
The Galveston, Texas, store received a similar remodeling, along with the Santa Fe, Texas, store, in which coffin freezers were replaced by ones with closed doors, and 25 percent more freezers were added.
“We have been looking to find new ways to merchandise things and get more variety in the same amount of space,” Arlan says. “At some locations, we just don’t have the option to spread out when we need to.”
Resets and even remodels are done while the stores stay open. “We don’t have huge sections down at a time,” Arlan says. “We’ll clear out one section, move it to a temporary area, and then from there start moving sections.”
For the remodeling of the Seabrook store, for example, a department against the wall where the addition would be built was moved, the construction performed outside while the store was open and the wall torn down when the addition was completed, Arlan says.
Social Media Marketing
The family owned and managed company markets on Facebook, a task that is performed by the older generation. “My dad takes care of it,” says the 33-year-old Arlan. “He’s the one that’s posting on it 90 percent of the time.” Arlan’s Market also mails, emails and posts on its website a weekly ad, does promotions on a local radio station and helps local food banks, churches and little leagues.
Many of its employees are trained and promoted from within, and the company acquired major talent in many of its acquisitions. It also recruits through job search websites and newspapers. “Sometimes, we’re lucky and they just land in our laps,” Arlan says. “A lot of our store managers have been in their stores for at least 10 years.” One of the company’s store managers started as a bagger decades ago.
“Most of the people live in the area that their store is located in, so you really get to know customers very well and know what they like and prefer,” Arlan points out. “We have quite a few locations, but we still are the hometown grocery store, and that’s what we want. We want the customer to be comfortable. We carry what they need, we take care of them, we know their names and their children’s names, and we really try to form a relationship with each of them.”