A lot has changed for Sunnyway Foods in the last few years. The family-owned and operated independent grocery chain of southern Pennsylvania saw two Wal-Mart Super-centers and two Giant food stores move into the area in the late 1990s, as well as a Food Lion store less than a quarter mile from each of Sunnyway’s locations. But for Dean Martin, president, the new competition provided an opportunity.
“We knew this was coming, so we decided to take an honest look at our business and ask what needed to change,” he said.
They changed a lot. Martin and his brother, who each manage one store, started a more aggressive pricing campaign, scratched a stamp-redemption program with too much overhead cost, and spent a combined total of nearly $1.9 million to remodel the stores.
They launched a new label for products the company makes inhouse called Sunnyway Recipes; Martin said they’ve used the same recipes for cakes, sausages, and potato and macaroni salads for 50 years.
They also hired a consultant to assess the business, make sure they were on the right track, and help the company launch a fuel discount program, which Martin said will start up early next year.
But for all the changes going on, Martin insists that the real reason for Sunnyway’s success is that he, his brother, and their teams remember what the company stands for and where it came from.
“I see other independent chains changing their philosophy, the entire way they do business, to mirror the competition, but that’s not a winning strategy,” he said. “We react to changes in our marketplace, but we remember there is a reason our customers shop with us. As long as we are delivering what they want, they are going to keep coming back.”
Their efforts have paid off; Martin said the company is investigating the possibility of opening a third location.
“The company is in a transitional state right now,” he explained. “We know we want to grow, so we’re taking the steps necessary to do so.”
That includes a year’s worth of restructuring. Martin said it will be impossible for him to fulfill his role as president and foster company-wide growth if he also has the task of managing day-to-day operations in one of the stores. To enable him to step back from that, he and his brother are moving around managers and promoting deserving employees.
He added that the company is doing much less outside recruiting through print or online media, despite its plans for growth. Those methods were expensive and yielded only a few replies—most new hires either came to a store looking for work or were recommended by a current employee. Martin said instead of spending several hundred dollars on advertising, he has plans for an incentive program to encourage employees to make referrals with a $100 gift for every referral that results in a new hire.
The fuel program is another new step for Sunnyway. The company plans to kick it off at both locations simultaneously. One location will have fuel pumps in the parking lot, the other will partner with a local, family-owned gas station across the street.
“A fuel discount program is the biggest idea in 20 years to increase in-store sales, and it is an especially useful tool for independent chains like us because our flexibility allows us to change the program to suit the market conditions right now, not weeks or months from now,” said Martin.
His plan for the program is to incorporate both the widely used “market basket” technique, which gives shoppers a discount based on the total cost of their purchase, and an item-specific discount, tying increased fuel discounts to products chosen by Sunnyway.
Both Sunnyway locations already boast plenty of in-store signage to advertise the program, and soon, information about it will go in the weekly circulars. But word-of-mouth marketing is largely what drives the growth of programs like these, according to Martin.
“The cost of gas is something everyone is dealing with, all the time. People will take steps to save even a few cents on a gallon of gas, so if they find a way to save something like $.40 per gallon, they are going to brag about it,” he said.
Another program Martin wants to get off the ground changes the management style of the company. Previously, orders were given from the top, but Martin wants to hold weekly meetings with all the managers to get their input before he, his brother, and the executive team make a decision. Such a measure, he hopes, will result in better strategic decisions and increase the support for new ideas among employees.
Martin said for now he is focusing on the fuel program, and the weekly meetings will begin once Sunnyway gets through the holiday season. In the meantime, he said he is thrilled with how successful the company is despite a dramatically more competitive marketplace.
“If you told me five years ago where this company would be today, I’d be bowled over,” he said proudly. “We are much stronger than we were then, with better systems and processes that are keeping us profitable. It was extremely beneficial for us to dust off the cobwebs and take a look at ourselves.”