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What you need to know for 03/25/2017

Golub Corp. continues Market 32 rebranding

Golub Corp. continues Market 32 rebranding

More Market 32 stores likely in Schenectady area
Golub Corp. continues Market 32 rebranding
The new Market 32 on Broadway in Fort Edward on Tuesday, Jan. 10, 2017.
Photographer: Photo provided

The Golub Corp. campaign to rebrand and convert its Price Chopper locations to Market 32 supermarkets continued Tuesday, with the opening in Fort Edward of the first Market 32 built from the ground up in New York.

The new store is the company's 137th operation.

Golub Corp. CEO Scott Grimmett said the new Market 32 was built in Fort Edward with a belief that the area will benefit from growth in the Glens Falls region, and that the store will succeed where the Grand Union that formerly occupied the site failed.

“It’s kind of a build-for-the-future,” he said. “I wish I had more stores in the Glens Falls area. We really like that area.”

Grimmett said a lot of strategizing and research goes into deciding where and when to build or remodel, how much space to create and what features to install.

“We’re in the middle of a very significant brand transformation,” he said. “That is largely, if not all, driven by our customer research and feedback.”

The less scientific art of predicting the future also comes into play.

One of the best examples of this for Golub is the city in which it is headquartered: Schenectady.

“We are certainly looking at opportunities in Schenectady,” Grimmett said, citing the imminent opening of the new casino as a factor that is transforming the city. The challenge is to determine where the growth is coming and move to serve that area.

“You want to fish where the fish are biting,” Grimmett said. “What is the city going to look like in 10 years?”

There is a large Price Chopper in the geographic heart of Schenectady, on Eastern Parkway, and a ring of three stores surrounding the city: One each right over the border into Niskayuna and Rotterdam, and one a few miles up Route 50 into Glenville.

So any Schenectady resident with a car has easy access to three Price Choppers and a Market 32. There are few options for those who rely on public transportation or whatever options exist within walking distance in their neighborhood; no other supermarket chains have stores in Schenectady, either.

One thing Golub Corp. isn’t planning is small-scale neighborhood grocery stores.

“I like to be very careful about not building too-small stores,” Grimmett said.

At around 41,000 square feet, the new Fort Edward supermarket is among the smallest in the Golub Corp. chain. A few exceed 100,000 square feet, but the size that works best for the company is 55,000 to 65,000 square feet, Grimmett said.

Counting the end zones, a U.S. football field is 57,600 square feet.

The conversion

The company in 2014 announced it would rebrand itself and its stores from the familiar “Price Chopper” to “Market 32” over the course of a decade, at a cost of about $300 million.

Grimmett said Tuesday that $300 million was offered as a round number because one was needed as part of the announcement, but it is a fair estimate of what the process will cost over the course of 10 to 15 years.
Every Market 32 is different, with different costs attached:

  • Three have been built from scratch, from the ground up — one each in Connecticut and Massachusetts and now one in Fort Edward.
  • Nine have been retrofitted from existing Price Choppers into Market 32 stores.
  • Two more retrofits are underway now: in Plattsburgh and Brunswick.
  • A new Market 32 is being built adjacent to an existing Price Chopper on Route 146 in Clifton Park, and the old store will be demolished as part of the project. (That’s classified as neither a ground-up nor a retrofit, but an on-site replacement.)

Other retrofits are on the drawing board, and other brand-new stores are likely, but none are at the stage where the company is ready to discuss them.

Grimmett said the strategizing and planning are extensive.

“We just look for markets that appear to be under-served,” he said. “There’s a whole bunch of metrics that go into assessing potential sites.”

Those include the number of residents in the surrounding areas and traffic patterns. If space is available for rent at a bargain price, that may tip the consideration, as well.

Golub Corp. leases the Fort Edward supermarket space and all but a dozen or so of its other stores, Grimmett said, explaining that’s a fairly standard practice in the U.S. grocery industry, to keep capital investments limited.

He said the new Fort Edward store has an elevated full- and part-time workforce of about 200 for its opening, and that will be allowed to shrink through normal attrition to around 170.
Companywide employment is about 21,000.

Grimmett said he is undaunted by the fact that a Grand Union failed at the site of the new Fort Edward store. He noted that several former Grand Unions Golub converted to Price Chopper stores are now thriving.

He also noted that, as a new brand with new and sometimes unique features at each location, Market 32 stores grow in popularity after they have their grand openings or grand reopenings.

The first Market 32 built from scratch, in Sutton, Massachusetts, is exceeding its sales and profitability projections by about 40 percent and experienced more than 40 percent growth in traffic in its first year, Grimmett said.

“The experience of going to a Market 32 is very different from a Hannaford or even a Price Chopper,” he said. “Word of mouth spreads; that’s why it grows.

“It’s stirring up the whole industry in the Northeast,” he added. “Grocers are really struggling to compete with a 32.”

The Golub Corp. has been reported to be the subject of acquisition talks in the past, most recently in November by the national supermarket chain Albertsons Companies. Both companies declined comment at the time of the reports, and Grimmett would not comment on the topic Tuesday, except to say nothing has changed in the company’s operations or its ambitious rebranding project.

“We’re not doing anything different than this company has done for 85 years,” he said.
 

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