When Peter Tedeschi stepped in as president and CEO of Tedeschi Food Shops four years ago, complete unification was his first mission. The convenience store brand – with 190 stores in Massachusetts, Connecticut, Rhode Island and New Hampshire – has family roots planted in a company that began in 1923. Angelo Tedeschi, Peter Tedeschi’s grandfather, built the business from his basement and then from the back of a delivery truck, selling imported Italian meats and cheeses. His sons joined in the trade and opened a string of supermarkets before selling the brand to Stop & Shop. But the entrepreneurial spirit remained.
The family soon re-entered the supermarket business with the opening of their first Angelo’s supermarket in 1964. The acquisition of the Curtis supermarket chain in 1972 moved the Tedeschi family into the convenience store business, since at the time Curtis had six supermarkets, three mini-markets and 24 convenience stores. In 1980, with 53 convenience stores in its arsenal, the Tedeschis sold the markets and focused on the convenient side of things. In 1996, the company acquired 64 Li’l Peach convenience stores and in 2002 it acquired the Store24 chain, which consisted of 80 convenience stores.
Peter Tedeschi arrived during a major re-branding effort. All Store24 and Li’l Peach stores were taking on the Tedeschi name – “flying one flag” as Peter Tedeschi describes it.
“Half of our company was supporting the franchised stores and the other half was supporting the corporate stores,” Tedeschi says. “It seemed like the company was divided and I found it to be inefficient, and I believe it was more difficult to assimilate best practices across the board. When I came in, I mixed it all up. The entire company is now organized to support both models. It did cause some angst among our employees because it was an enormous change, but the benefits have been phenomenal.”
For one, communication – horizontally and vertically – improved in every function. Also, prior to the consolidation, lulls and busy seasons in the markets sometimes varied for the two divisions. The accounting department from one side would be burdened with high workloads while the other side resumed its average workday.
“Now we can do load balancing,” Tedeschi says. “We share the responsibilities, and it’s also afforded the employees an opportunity to learn more about the entire business. Each side can now come with a fresh and objective eye and offer suggestions. It’s made us a better company because of it.”
Tedeschi himself came with a fresh, objective eye. While building a successful career in the financial services industry, Tedeschi was approached by his family to lead Tedeschi Food Shops because Charlie Fitzgibbons, its president at the time, was planning his retirement. The two cousins spent nine months transitioning Peter in as the new leader. The rebranding program was already underway, and the corporate and franchisee support consolidation effort was next on his list. The other big change was a capital program to upgrade and renovate the stores that were less-than-stellar in appearance.
“When we looked at growing the company, we decided that before we could grow externally and invest outside of the company to grow business, we needed to invest in our current stores first,” Tedeschi explains. “We had buildings that didn’t represent the brand well, and I said that we either invest in these stores or divest these stores. So, we invested in our stores, and in a down economy with a lot of companies going in the opposite direction, this is a very contrarian move, but it has worked well for us.”
At corporate expense, Tedeschi Food Shops made aesthetic and equipment upgrades to some corporate, but mainly franchisee locations. In one move, the company fostered a sense of goodwill between the corporation and its franchisees and signaled to the public that Tedeschi’s was a thriving brand. With every location now operating under one culture, the company is boldly moving into its future.
As Tedeschi explains, this company is one that is “proud of [its] past but focused on [its] future.” Its past, however, has managed to linger – the Tedeschi namesake being one facet of that. But the company’s historic willingness to jump into new markets and offer unique caterings is another. Tedeschi Super Markets differentiated themselves with jewelry and shoe repair counters inside its stores, and free babysitting to let parents shop in peace. Today, in the convenience store business, the company is adding some traditional and non-traditional offerings.
Expanding Into New Fronts
“Seventy-five percent of all convenience stores in the United States sell gas,” Tedeschi explains. “Out of our 190 locations we only have 10 that sell gas. Our expertise is really in the inside sales and in foodservice. That, historically, is our strong point, if you will. But I’ll say this: We are not afraid to get more into gasoline. In the next couple of months, people will see that we are expanding in that area.” Most of that expansion will happen under the Tedeschi-branded gas.
Half of its gas station locations are unbranded, while the other half are branded under major gas companies. Tedeschi has found that the gas stations branded under the company’s name not only sell more gas than the others, but also boost inside sales higher. “From a branding perspective, we like the idea of having our own name on the canopy upfront,” he says. “What we found is that we’re selling more gas up front because we’re able to sell ours at a more competitive price. But the bump to inside sales was much higher than anticipated. Psychologically, people don’t want to buy food from a big oil company that they associate with gas. However, they associate our name with quality food.”
That association became even firmer two-and-a-half years ago when Joe Hamza, head of sales and marketing, approached the newly inducted CEO with a plan. “He said, ‘I want to make a drastic change with the pre-packaged sandwich program,’” Tedeschi says. Twenty of its convenience stores have full-service delis producing fresh, quality sandwiches, but the others rely on pre-packaged sandwiches. Hamza found a commissary that made quality pre-packaged sandwiches and wanted to contract it as a vendor. Tedeschi was skeptical at first.
“But then he said, ‘Peter, when was the last time you ate one of our pre-packaged sandwiches,’ and I said, ‘I haven’t.’” After realizing the switch could only help, the company acquired DSD1, which now makes Tedeschi’s signature TD sandwiches. The transition has more than tripled its pre-packaged sandwich sales. Now, Tedeschi says he “eats too many [himself].” The new sandwiches have gained national attention, but the company doesn’t have enough capacity to fill its needs and keep up with external orders. Instead of spreading itself thin, it’s focusing on taking care of its customers’ needs, which also involves offering healthier options.
Convenience stores and healthy food may not have been synonymous in the past, but Tedeschi says they are finding ways to appeal to new health-conscious consumers while retaining the staples that its traditional customers want.
“We’re doing more with healthy food and healthy options,” Tedeschi affirms. “At many stores, we have healthy food end caps. We have meals to go and are happy to offer more health-conscious choices. I believe the healthy trend you see going on today is not a fad. It is here to stay.”
The same can be said of Tedeschi Food Shops. The Rockland, Mass.-based company employs 1,400 full- and part-time people, and approximately half of its stores are franchise locations. Tedeschi says its employees and franchisees are essentially brand ambassadors. Some have been with the company 20 or more years.
“Historically, we were in the supermarket business,” he says. “I’m not saying we will never go back into that business, but we have many more opportunities to build our convenience store base before we can seriously think about grocery stores. But we never say never.”