“We feel like these things help attract customers and promote loyalty,” Huerta says. “We’re also a little bit antiquated. We see the best way to bring in customers is through aggressive weekly flyers. As soon as we do something crazy on our front page, we see an immediate change in customer count.”
Big Saver Foods is looking forward to a mobile marketing push and also promotes its brand through community events such as health fairs. “But our best vehicle is the weekly flyer with aggressive pricing with the right items,” Huerta adds.
Turn on a Dime
Big Saver Foods is always looking for new locations, but it wants to remain a small operation overall. The company likes being able to access any of its stores easily for any necessary supervision. “We want to keep this close-knit family with the employees and being in the stores and talking to customers to see what they want,” Huerta says. “We’re always looking for sites that are good and make sense, but we don’t have an appetite to grow just to grow.”
In addition, its corporate office is just east of downtown Los Angeles near the city’s produce market, which allows members of the company to talk to growers regularly and find out what items are doing better than others so it can stock stores accordingly. Big Saver Foods is always on the pulse of trends in the industry and regularly speaks to vendor partners so it can be ready when a product is available or suddenly growing in popularity.
“We can change strategies and move quickly,” Huerta says. “If we see trends, we can make a quick change. By tomorrow, we could be doing something different. There’s not a lot of red tape to go through like large companies. We can turn on a dime. When you’re dealing with fresh departments, the commodities are volatile; they can change tomorrow. A crop could get rained out. Or if suddenly a couple loads of avocados suddenly become available, we can grab them and put them in all of our stores. Bigger stores can’t make that global change.”
Being a smaller company has its disadvantages, of course. Big Saver Foods faces the increasing costs of operations. California has passed a couple of minimum wage increases, which Huerta says puts a strain on operations and compresses its net profit. And it’s not just the state issuing new regulations; some counties or cities might have different minimum wage requirements, so the company might have to manage completely different policies and rules from one store to the next, even if it’s only a few miles away.
“They’ve introduced mandatory sick pay, which is a great benefit, but it adds more costs,” Huerta explains. “We already had a rich vacation policy but now we also have to pay sick days. In an industry like ours, where you’re making pennies if you’re lucky, any change of operations can set your system off. But we’ve been successful at managing these programs through good morale in the stores. Plus, now there are several independent stores like us. That slice of pie is getting smaller so we really have to fight to maintain our share.”
While Big Saver Foods customizes its selection to specific neighborhoods, it is also working on reinvesting in some of its older stores and upgrading them to better fit their communities. It is remodeling many of its stores and adding LED lighting to better display products for a fresher look. This also helps the company become more efficient overall – LED lighting not only makes the products look better, but it’s also making the facilities more environmentally friendly and saving on utility costs.
The made-from-scratch bakeries are also a staple of Big Saver Foods, but not all locations have had them. That is why the company is also putting new bakeries into more stores so they will be able to create custom-baked goods fit for each neighborhood. Additional equipment Big Saver Foods has added includes new self-service meat cases, refrigerated island cases for produce and new refrigerated cases for other products. The new refrigeration systems make the products look better, but like the LED lighting, they are also more efficient.
“Anyone can sell a box of cereal, but for us we will strengthen our fresh and made-from-scratch departments,” Huerta says. “For us, the produce, meat and bakeries are the signature departments, where big retailers will have a hard time competing with. After we finish remodeling older stores, I hope we reach a point where we’re so confident with the success of our new direction that we can aggressively pursue some growth.”