Andronico's Community Markets has been a fixture in the San Francisco Bay Area since Greek immigrant Frank Andronico opened his first store in Berkeley in 1929. The chain filed for bankruptcy in 2011 and has since mounted a comeback under new owners, with its five stores undergoing remodeling and a revitalized product portfolio. Retail Leader spoke with Cheryl Hughes, Andronico's chief financial officer.
Retail Leader: You were with Circle K for 15 years. What's the difference in your job between a major convenience-store company and a small specialty food chain?
Hughes: I think part of the reason management brought me in was [because] there's a lot we do from a big-company perspective that can help little companies grow. So while we have a lot more resources at a large company from an IT perspective, and just a lot more resources overall, you learn at a small company how to be resourceful, to be able to do that work with a smaller company and less resources. So I think it's been kind of beneficial as a company, bringing me in to ask, "What can we do to improve?" Looking at the back office, and how we manage our stores, and how we process our information, to say, "How can we do this more effectively and more efficiently?" We have to be more efficient at a small company.
RL: Shortly after Andronico's emerged from its 2011 bankruptcy, it went on a store-remodeling program. How is that going?
Hughes: I would say we're probably 95 percent complete on the remodel. They've done complete remodels at three of the stores and we're finalizing the other two the first quarter of this year.
RL: How is the company dealing with the expense of remodeling?
Hughes: We've remodeled the stores over the last three or four years, so we've spread that expense out instead of doing it all at once. We're paying it out of current cash flow. And that's the reason we didn't remodel all the stores [at once]. The company is running really well at this point, and right now it's all about sales growth.
RL: How has Andronico's kept its points of distinction in the market?
Hughes: We're a destination for fresh-produced food, so we almost combine a restaurant-like quality with a grocer as well. So a customer can come in and get prepared food that's done by wonderful chefs, or they can come in and buy the specialty products that they need to create their own.
RL: Under its new ownership, Andronico's has started stocking more conventional, mainstream products along with its gourmet and specialty selections. How do you balance the selection between the two?
Hughes: We do have systems that will help us. We do what we call market basket research, so we understand what the customers are buying. So we've done I think a pretty good job of understanding [our customers]. We have a lot of regular customers, and I'm sure most grocery stores do, and we talk to our customers and try to understand what they're looking for and what they want. So we've got customers that completely shop the organic sections of our stores, but then we've also got customers that want conventional [products]. So it's really been a combination of some of the analytics, but then also just talking to our customers and understanding what they're looking for.