SCHENECTADY — The Golub Corporation completed its 25th Market 32 supermarket Tuesday, five years and one week after it announced it would start converting its Price Chopper brand to the new model.
The Chopper-turned-Market 32 on Ballston Avenue in Saratoga Springs features the immediately noticeable changes in decor and food offerings that are the hallmarks of the newer brand. It also incorporates key changes in customer service and marketing that have been developed for Market 32 and retrofitted into the remaining Price Chopper locations.
Golub Corp. CEO Scott Grimmett discussed the conversion process with The Daily Gazette earlier this month. It has been a major undertaking, he said, and one that has evolved with lessons learned and with changes in the competitive landscape.
“The grocery world is different today than just five or 10 years ago,” he said.
However, nothing has fundamentally changed the Market 32 conversion process or the strategy and motives behind it, which all seem to boil down to two words: customer experience.
The newest store features earth tones, softer lighting and murals, as well as a greater sense of openness and intuitive placement of products to improve shoppers’ flow through the store — all of which are components of the Market 32 model.
Meanwhile, after it started rebranding to Market 32, Golub Corp. began and has now completed a conversion of private-label inventory from “Price Chopper” to “PICS” and “Market 32.” There are several other store brands, but they each are reserved for a specific category such as organics. PICS is the dominant in-house label.
The name change was intended to emphasize high quality rather than low price, said Mona Golub, vice president of public relations and consumer services.
Top-tier store-brand items are called “national brand equivalents” within the industry. Specials and coupons notwithstanding, they are significantly less expensive for the shopper and more profitable for the retailer than similar nationally marketed items, because there’s no expense for national marketing.
“Innovative integration of our own brands throughout store has been critical,” Mona Golub said. “We really began to treat our own brands like consumer packaged goods.”
Golub Corp. operates 133 supermarkets in six states. At those stores, at its Schenectady headquarters, and at its warehouse/distribution centers in Rotterdam and Voorheesville, the company has a combined workforce of about 20,000 full- and part-time employees, whom it calls teammates and who have a substantial ownership stake in the company through its employee stock ownership program.
Grimmett said Price Chopper/Market 32’s bricks-and-mortar competition can be divided into four broad categories: discounters such as Aldi, superstores like Walmart, specialty stores such as Whole Foods and regional chains like Hannaford.
He said the supermarket industry has never been highly profitable in the 46 years he’s been a part of it, and the margin is slimmer than ever with all the competition in recent decades.
Within five miles of the Golub Corp. headquarters, for example, there are 19 supermarkets, counting small independents and large superstores, not counting drug stores and dollar stores. Only four of them are Golub properties.
The privately held company does not disclose its revenue and profit numbers, so one can't easily guage what Market 32 has done for the Golub Corp.'s bottom line. But Grimmett said the new model has been well-received by customers and well-studied by competitors.
Speaking about the Market 32 concept, Grimmett often avoids specifics so as not to tip off competitors, even though he acknowledges that it is “hard to be first and unique for very long.”
Innovations, he added, “will be plagiarized, hopefully not executed as well.”
Individual store features are easy enough to copy, but the overall shopper experience is a sum of a store’s parts and of a culture that is harder to replicate. A connection to the community is another part of the picture, said Leo Taylor, Golub’s executive vice president of administration, and it is harder for a national chain or international conglomerate to achieve.
For all that, what worries Grimmett most is online commerce, with its simple point-and-click shopping. What’s holding it back so far is difficulty of the mass-market delivery of goods to buyers. Online retailers have no physical presence anywhere near most American neighborhoods.
Golub Corp., by contrast, has a network of 133 supermarkets that can serve as distribution centers for hundreds of thousands of nearby homes. It and other Capital Region supermarkets offer home delivery through Instacart. Amazon took a step in that direction in 2017, when it acquired the 500-store Whole Foods chain, through which it now offers delivery, but only in limited areas.
“Amazon has not yet figured it out,” Grimmet said. “My guess is that they’ll keep trying. I think we’re up for that challenge.”
TIME FRAME EXTENDED
When Golub Corp. announced the Market 32 rebranding in November 2014, it offered two round numbers — 10 years and $300 million — for time frame and cost.
It’s now apparent the process will take well beyond 10 years.
“There are always mid-term strategy changes,” Grimmett said. The changes thus far have all been adjustments, not corrections, he added.
Each year’s crop of Market 32 conversions or new construction incorporates changes based on lessons learned with the previous batch of Market 32s, he said. The 25th store has subtle differences from the earliest stores, the 50th store might show more marked changes.
“When we get 100 deep it’s going to be very obvious,” Grimmett added.
Meanwhile, lessons learned from the Market 32 model have been applied to existing Price Chopper locations, with the same resulting benefits in customer experience. Grimmett said this has allowed the company to slow down the conversion process because the Price Choppers are now reaping some of the same advantages of Market 32s.
“We purposely worked very hard in building this plan so it would be timeless,” he said.
Most grocery chains, he added, have a rolling infrastructure strategy, updating supermarkets every decade or so to refresh them. The Market 32 conversions serve this purpose for Golub Corp.
The company is going to limit its infrastructure spending to Market 32 constructions or conversions, and won't build any more Price Choppers. But lessons already learned through the Market 32 initiative can be implemented in existing Price Chopper stores at limited cost.
The Golub Corp’s last big rebrand — from “Central Market” to “Price Chopper” in the early 1970s — was quicker and easier. But that was a name change rather than a business model revision, and it involved fewer stores.
The only other store name currently in the Golub Corp. portfolio is “Market Bistro,” attached to a one-of-a-kind store that opened in 2014 in Latham with multiple eateries and cooking classes under the same roof as the rows of merchandise. It will retain that identity indefinitely.
Mona Golub said the Market Bistro model was conceived and executed before planning began for Market 32; it never was intended to be a prototype for the future, but the lessons learned there were incorporated into the new brand.
“In many ways it was our foray into our stores of the future and a laboratory for us,” she said.
Like Market Bistro, the new Market 32 in Saratoga Springs has a wider availability of prepared food options than the Price Chopper it replaced. These range from the simple placement of a self-serve case of store-baked pastries, doughnuts and muffins right up front near the Starbucks to the addition of an in-store meat smoker (a setup first used at Market Bistro).
You can continue from there to the poke bowls at the sushi bar, to the stone-hearth bagel ovens that are the new standard in many Golub stores, to the gourmet single-serving desserts.
“That’s all coming from the research that we did with customers,” Mona Golub said.