In a hypercompetitive food market where falling prices are squeezing already thin grocery store profits, Sendik’s Food Markets is expanding.
The Milwaukee-based grocer with the familiar red bags plans to open six new stores in the metro area during the next 12 months, a strategy third-generation family co-owner Ted Balistreri said is “deep-rooted” within the 90-year-old company. The first of the new stores will open Tuesday in West Milwaukee.
“We need to be growing either physically or through services and products constantly,” Balistreri said. “If you’re not growing and pushing the business forward, you’re going backwards.”
In addition to West Milwaukee, the company will open three of its regular grocery stores in Waukesha, Brookfield and Muskego. Sendik's plans to open two of its smaller format Fresh2Go stores in Greendale and Hales Corners. The West Milwaukee store will be the company's 14th in the metro area. By this time next year, it expects to be operating 19 stores.
Balistreri and the company’s 1,700 employees are keenly aware of the local market conditions, where the three largest retailers in the world — Walmart, Costco and Kroger via its Roundy’s Pick ‘n Save subsidiary — are all battling for market share.
The food market is growing nationwide, said Jim Hertel, senior vice president of Willard Bishop, a suburban Chicago food retail and production consultancy that is part of Inmar Analytics.
"Food and consumable product sales tend to be growing, basically, with population," Hertel said. "You don’t have to look too far, I always say, to realize people are eating pretty regularly."
 
               
Worrying about competitors is not something the folks at Sendik's spend much time doing, Balistreri said.
"We tend to focus internally on how we can improve and get better, and we focus inside the four walls of our business," he said. "For us, whether the marketplace is really competitive — as it is right now — or whether it is less competitive, really doesn’t change our direction and our goals in wanting to be relevant in this marketplace and continuing to grow.
“We think that there is demand for what we have to offer still in the marketplace, and we’ll continue to pursue that.”
What the company has to offer, Balistreri said, is a locally owned, customer-focused shopping experience that caters to customers ranging from foodies who want to make gourmet meals at home to time-starved families looking for fresh, prepared meals on the go.
The formula has proven successful for Sendik's and is being pursued by others across the United States.
"A local operator who seems to have a pulse on at least a portion of their community’s consumers, there is a tremendous appeal for that," Hertel said.
Still, the business has to successfully carry out the strategy.
"None of it works unless you do a great job, and they do a great job," Hertel said.
Increasingly savvy food consumers need to be engaged with the latest products and trends, but those products also need to be practical and have a value to people, Hertel said. A grocer has to "satisfy knowledgeable consumers' tastes," he said. "It’s not like it’s just, 'Here’s your truffle-infused whatever oil,'" he said.
An emphasis on being local also is becoming a big piece of the grocery puzzle these days.
"The fact that they are locally owned means a lot," said Rick Shea, president of Shea Food Consultants, a suburban Minneapolis-St. Paul grocery and food marketing consultancy. "Fresh produce, meats. Fresh takeout and fresh prepared. Those are the types of stores right now that are resonating with consumers. If you design the concept right, you don’t have to be a big name grocery retailer to be successful.
"The challenge for traditional grocery players is to out-execute at the local level with products such as fresh produce, fresh meat, in-store bakery, the types of items that are perishable that consumers don’t stock," Shea added.
Balistreri said Sendik's has the team in place to do just that.
"We are a family owned and operated business, and that extends to every one of the 1,700 associates," he said. "They really help us grow this business. They are supportive of that growth. They want to grow. That’s helped us as a family business because when you get 1,700 people saying, 'When’s the next store opening?', that builds excitement and spurs me on to look for good sites and make the right decisions to help the company prosper."
The leadership team at Sendik's talks about its position as a local company constantly, Balistreri said.
"I don’t think it can be understated," he said. "There’s the old saying, 'You can’t fake local.' It’s something we don’t take for granted. We want to be a good employer and we want to be good community citizens."
Look for Sendik's to always be tweaking its formula.
"You are going to continue to see growth and enhancement of our prepared foods section," Balistreri said. "We’ll put more emphasis on that over time."
The company also will continue hammering on the fact that it's local.
"The community at large is something that is really important to us," Balistreri said. "We talk about that internally a lot. Our goal is to make a difference in people’s lives.