TOPS Friendly Markets
Based in upstate New York, TOPS Friendly Markets operates a chain of more than 160 grocery stores. The majority of these are in New York, but the company also has locations in Vermont and Pennsylvania. The company’s roots can be traced back to the early 1920s, when Italian immigrant Ferrante Castellani moved to Niagara Falls, N.Y., and opened a small grocery store. After his sons took over the business, they started to expand and eventually joined forces with equipment supplier Thomas Buscaglia.
By the 1950s, the supermarket had emerged as the fastest-growing model in the grocery retailing world, and Armand Castellani and Buscaglia partnered with a group of independent grocery store owners and opened their first 25,000-square-foot supermarket in Niagara Falls. This became the first TOPS supermarket, and the company was off and running.
TOPS continued to thrive and expand throughout the 1970s and 1980s, adding more stores in western New York as well as its first foray into Pennsylvania with the opening of its Bradford, Pa., location. The biggest change to the company came in 1991, however, when TOPS was acquired by Ahold, a Netherlands-based multinational grocery conglomerate. In 2000, Curci was named CEO of TOPS after coming up through another chain owned by Ahold. Although TOPS formed an alliance with another Ahold-owned chain based in Pennsylvania, Curci says TOPS struggled to fit into the larger centralized Ahold organization.
In 2006, Ahold divested TOPS and sold it to Morgan Stanley Private Equity. Spearheaded by Curci, six members of the company’s executive team purchased TOPS back from Morgan Stanley in 2013, and the company remains under local ownership today.
Returning to local ownership was significant for TOPS, and Curci says as a result the company feels like a brand-new operation that nevertheless has strong ties to the community and its long history. “While we’re a very old and proud company, we’re more like an entrepreneurial startup,” he says.
With its newly revitalized connection to the upstate New York market, TOPS has seen that connection grow stronger, even with the strong competition it faces in the form of Wegman’s and Walmart. The company is flourishing today because it has operated on the principles of the neighborhood market that made it successful 50-plus years ago, as well as its willingness to branch out and take a different path from its competitors. Since splitting off from Ahold in 2007, TOPS has more than doubled its number of stores through expansion and acquisition, and recently was named Grocery Retailer of the Year by Grocery Headquarters magazine. TOPS is proud of its past, but believes strongly that the best is yet to come.
“We’re a company that is very excited about our future,” Curci says.
Bringing TOPS back under local ownership was crucial for the company’s continued success because at its core TOPS is all about being the neighborhood store. Although the TOPS brand remained strong throughout the period when it was owned by Ahold, it was clear to Curci that the company had lost touch with the communities it served while being managed from a centralized authority. As soon as the company became independent again, it relocated its headquarters back to Buffalo, bringing back hundreds of jobs and giving the company a ground-level view of its customer base once again.
Being a neighborhood store means more to TOPS than having a location in every neighborhood. It means having a team in each one of those locations that fully understands the needs of the communities they serve and having the authority to take care of those needs directly.
Curci says the culture within the company encourages store teams to be entrepreneurial, something that wouldn’t be possible to achieve without the skilled and experienced personnel TOPS has on staff. “We’re blessed with a base of store managers that has 15 to 20 years of experience in the industry, and they really understand what it takes to satisfy their customers,” he says. “I like to say that we have 160 CEOs out there. Our store managers are really the ones who are running their businesses.”
Another vital component of being a neighborhood supermarket is having a store that fits the size and needs of the community. Although its competitors bring the same one-size-fits-all approach to every community, TOPS is careful to scale its stores for each location, which means a TOPS supermarket can be anywhere from 10,000 square feet to more than 100,000 square feet, with the average size being approximately 60,000 square feet. Curci says that when TOPS acquired The Penn Traffic Company in 2010, it brought more than 60 smaller locations into its portfolio, giving it experience in operating a smaller grocery store.
With the right cost structure, Curci adds, TOPS can operate one of these smaller stores with the same profit margin as a larger store. This creates a lot of opportunity for the company to enter into communities where shoppers are looking for something besides the big-box shopping experience. “Many people don’t want the big-box experience,” Curci says. “They want to get in and out of the store quickly.”
Understanding its customer base is another essential element in TOPS’s strategy of being the neighborhood store, and Curci says the customer base in upstate New York is very traditional in a lot of ways. That’s why TOPS emphasizes its weekly 8- to 10-page newspaper circular ad and coupons. The company also generates excitement among its customer base by offering special deals such as 10-for-$10 sales, meal deals and buy-one-get-two-free offers.
Big-box stores like Walmart make their case to shoppers by offering a large selection of products, but that doesn’t mean they have everything. TOPS sets itself apart from its competitors in the region by offering services that are unmatched by those larger retailers. “The No. 1 difference is our go-to-market strategy of being a high-low operator,” Curci says, adding that the company doesn’t just offer the least expensive options for shoppers but rather a mix of affordable and high-end products.
One area in which TOPS skews firmly toward the high-end side is in its meat department, and the company takes pride in offering customers a more complete meat department than big-box stores or even most supermarkets. Not only does each TOPS location cut its own meat daily, but each store has its own in-house butcher who is able to help customers select the right cut of meat for their needs and provide them with tips on how best to cook it.
Unlike many big-box chains, TOPS doesn’t treat meat the same way it would treat car batteries or other general merchandise, Curci says, and the company’s tradition-minded customer base truly appreciates that. “We really emphasize that freshness in the store, especially around meat, which is still center of the plate in a traditional market like upstate New York,” Curci says. “You won’t find that in our competitors’ stores.”
Along with providing the best-quality products in a manner customers appreciate, TOPS also works hard to create strong bonds with its customer base through promotions and special programs. For example, one of the company’s most popular customer incentive programs is its gas rewards program, which gives customers a discount on gas from any of the company’s 53 integrated gas stations based on how much they spend on groceries. Customers receive 10 cents off a gallon for every $100 they spend in a TOPS store, and Curci says it’s not uncommon for some customers to take a dollar or more off the price of a gallon of gas using the program. “It’s a great loyalty builder, and it’s something that neither of our competitors do in this state,” Curci says.
TOPS also boasts a robust loyalty card program, which provides customers with additional savings while also collecting data on their purchasing habits so the company can direct specific offers to them. The company is supplementing that loyalty program with an ecommerce infrastructure that has been slowly gaining steam since it was rebuilt after the split from Ahold. Curci says TOPS understands that even in a traditional market like upstate New York, consumers are becoming more tech-savvy all the time.
TOPS offers customers the option of ordering party platters from its website to be picked up at a store, but that’s only the beginning. Eventually, Curci says the company envisions a “click and collect” system where customers will be able to fill a virtual shopping cart with groceries from the comfort of their own computer or smart device and then simply grab their order from the most convenient TOPS store. Curci says the majority of TOPS’s customers enjoy the convenience of shopping online, even if they prefer not to have their groceries delivered to their doors.
“In terms of e-commerce, what we’re doing today is really putting our toe in the water,” Curci says, adding that the company’s goal with its e-commerce initiatives isn’t to be first to market with new ideas, just the best.
The upstate New York market is traditional and relatively slow-moving when compared to major metropolitan centers, and that applies to population growth, as well. With that in mind, Curci says TOPS’s biggest challenge at the moment is maintaining a strong growth momentum even though the customer base isn’t growing as fast. “This area is not known for tremendous population growth, so any new business we have to take from somebody,” he says.
One of the ways in which TOPS is expanding despite the slow population growth is by branching out into new areas, specifically in organic and all-natural foods. Organic has been a double-digit growth category for TOPS in recent years, and the company is taking advantage of that fact by introducing a new format.
Curci says TOPS opened one natural and organic food store under the new Orchard Fresh brand recently in upstate New York. The concept, which is smaller than a typical TOPS supermarket, is intended to address the growing need of consumers for more natural alternatives to processed food.
Curci says the company has learned a lot about the market through operating the inaugural Orchard Fresh location, and TOPS looks forward to expanding the concept in the years to come. “You can’t stay the same and you have to continually change with the customer base,” he says. “We have to continue to change and do things differently to stay ahead of our very strong competition.”
Even though there hasn’t been much growth in the customer base, TOPS has been able to grow nevertheless, and Curci says that’s because the company has a true connection to its communities and the people who live there.
Being locally owned also gives the company the ability to make decisions quickly and change along with the community. “I think we see adding another four to five stores a year,” Curci says. “We’ll see that same kind of growth going out.”
As long as TOPS continues to do what it does best and stick to the principles that have served it well in the past, the company should be able to look forward to a long and prosperous future to honor its long and prosperous past. “One of the key components that makes us successful is that we understand who we are and we never try to do what others do,” Curci says. “We try to do what we do best.”