Case Study: A New Deli’s First Year

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Middlebury Natural Foods Co-op
Middlebury, VT
Founded: 1976
Number of members: 2,240
Equity investment:$300 per household
Number of staff: 62
Retail square feet:Over 6,000 including a café and seating area

Middlebury Natural Foods Co-op is located in historic Middlebury’s downtown, which boasts of a thriving town life as well as an easy vacation getaway nestled between the Vermont’s Green Mountains and Lake Champlain. Amid the bed-and-breakfasts and chic little eateries, the food co-op is attempting to carve out a niche as the place to find healthy and innovative food focused on fresh, local and organic.

Since the co-op expanded a year ago and doubled its size, it’s been meeting its sales goals and is on track for profitability, ahead of schedule. This is all good news from general manager Glenn Lower’s perspective. Yet as much as he anticipated the difficulties he might face in the co-op’s post-expansion world, he said it was a lot harder than he anticipated. He credits the professional advice and support he got throughout the project’s phases for his success to date. “I used every facet of CDS’s expansion programs,” Lower said, “Market study, expansion and general manager support, pro forma, and store design.”

Lower said during the first year in the new co-op, his priority was to keep on top of the co-op’s new café and food service department, as well as other expanded perishables departments like meat and produce. At the outset of the project, he said he gave the café the biggest budgetary cushion. He figured if the rest of the store’s departments did well it would carry the food service operation. So far, it has, although it’s been much more complex than he expected. “It’s been our biggest challenge and our biggest success.”

Lower said because they never had a deli they were starting operations from the beginning, “Our deli production systems needed sorting out, all of them—ordering, preparation, processing, merchandising. And we had to consistently meet customer expectations.” The first food service manager he hired only lasted three weeks into the newly expanded store. Besides worrying about café sales and margin, Lower was also concerned about high turnover in the department and the kitchen staff’s isolation from the rest of the store.

Lower also believes that being clued in to the cultural shifts in the workplace are just as important as number crunching. Often staff morale is the bellweather of positive or negative customer service levels, and that has a profound impact on sales. Since they doubled personnel and added new labor-intensive departments, the co-op staff was bound to feel the change. The deli’s personnel experiences may have been extreme, but the message was clear. “One area of focus for our new store was communication and keeping staff focused on teamwork,” Lower said. “I also wanted to nurture a culture of change.”

He knew he needed an overall integrated approach to monitoring and correcting the situation. So he developed a plan to meet regularly with the management team as well as one-on-one with managers, have them report on their progress relative to the business plan’s goals for the expansion, and hold people accountable on following through. A big part of the one-on-one work was tracking sales. He wanted to be sure people were well acquainted with sales targets and meeting those goals. “Sales are going well,” Lower said about those efforts, “and cash is holding steady.”

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By |July 30th, 2006|Categories: Case Studies, Solutions|Tags: |

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