There are four WiseWay stores, two in Valparaiso and one each in Hobart and Chesterton. Each WiseWay is a full-service store that even includes groceries being carried out to cars for customers. The average size of a WiseWay is 60,000 square feet, and the stores have everything one would expect in a modern supermarket such as extensive delis and bakeries, a large floral department, and a separate natural and organic food area with a trained nutritionist on staff.
“Those stores have a strong reputation for meat and produce as well, but we are still substantially less expensive than many large competitors,” said Don Weiss, president.
More than one approach
In addition to the WiseWay stores, the company runs three PayLow locations, two in Merrillville and one in Gary. All are converted former WiseWay locations and feature pricing that is up to 15% less than conventional chains. All PayLow locations are up-to-date modern stores averaging about 65,000 square feet, and each has every department that a WiseWay has, with the exception of floral.
The eighth company store is Wise Guys Discount Liquors, a 7,500-square-foot facility located next to one of the PayLow stores in Merrillville. In all, the organization’s locations range from 45 minutes to an hour and 15 minutes outside Chicago.
Weiss said shoppers in Northwest Indiana at each of his company’s locations are looking for savings whether they shop primarily high end or discount. Coupon usage is up across the board (WiseWay offers double coupons), and people are paying more attention to ads than ever. As a result, the organization is highlighting more items in ads, and people are finding every possible way to save. Although print advertising may not be the medium of the future, Weiss said it is still the best way for the WiseWay family to inform the public about deals inside the store.
“We do have Web sites for all three of our formats, but print is still the most important means of communicating in our marketplace,” he said. “This is a peculiar market because we are part of the Chicago Metro area. For us to advertise on the principle networks, we have to do a buy that covers 8 million people. That makes most local media of limited use. The only other market like this is New Jersey, so print is the best medium for us, although we are looking into experimenting more on zoned cable.”
Price and value
The company keeps up with customer wants through direct in-store research by employees about shoppers. In addition, WiseWay conducts phone surveys on regular basis. Findings suggest price and value are the easily the driving factors. The company is working with vendors to find value-buy items for WiseWay and price-cut goods at PayLow.
“At any one time, we have about 6,000 to 9,000 items with temporary price reductions, most of which we buy through our cooperative wholesaler, Central Grocers,” said Weiss. “We pass discounts on by starting with massive displays close to the front of the stores, setting a price image and carrying it throughout the store with several thousand price reductions. Our vendors make these deals possible, and we pass them on much more aggressively than chain stores, even more so than super centers.”
Even while people are looking for low prices, they are looking for the indulgences they used to get from restaurants. Weiss said seafood, bakery, and natural and organic sales have all gone up at a time when the expectation might be that they would decline.
“Prices have been low on crab legs in the seafood department; people with special dietary needs have been happy to find all the natural and organic products in the same area,” he said. “These areas have been a source of constant growth for us.”
Adjust as needed
In the last 12 to 18 months, the WiseWay family has looked for ways to maximize its resources. About 18 months ago, an older WiseWay was completely remodeled, expanding the store from 40,000 to 53,000 square feet and adding the amenities of the state-of-the-art floral, deli, bakery, and natural foods departments. In addition, one WiseWay was converted into the third PayLow location nearly a year ago. Both projects were seven-figure investments that led to substantial improvements in sales for each location.
Other investments included building a new scratch bakery facility. The company used to conduct central baking operations in a facility in one of its stores. However, WiseWay decided quality could be improved by moving into a 10,000-square- foot facility with top-of-the-line equipment and a controlled atmosphere.
Lastly, the company developed the Wise Guys Discount Liquors concept. In Indiana, supermarkets can only sell warm beer or wine, only selling liquor if they have a pharmacy. But even with a pharmacy, the liquor area must be separate from the supermarket, and the stores still can’t sell cold beer.
“We bought a free-standing liquor store license, and the store is adjacent to the WiseWay building we recently converted to a PayLow,” said Weiss.
Weiss knows unemployment, prolonging of the recession, and a frozen capital market are all challenges that companies must face. So far, the grocery niche of the industry has seen only modest declines compared to other retail sectors. Weiss knows growth will be difficult, but he does see opportunity for the WiseWay, PayLow, and Wise Guys family, even in difficult times.
“Until the capital markets open, growth is going to be difficult for us and for others. Most growth will come through reworking existing locations and acquiring others,” he said. “There are too many retail boxes in America and not that many corners yearning for another supermarket, so consolidation and remodeling are areas where we can look for opportunities.”