Shopping The Stores -- Taking Stock -- Ohio Grocery Industry Consultant Tours 18 Stores In Seattle Area And Gives His Assessments

CUTLINE: CRAIG FUJII / SEATTLE TIMES: GROCERY INDUSTRY CONSULTANT MICHAEL KNILANS SAYS ROGER'S THRIFTWAY IN THE CENTRAL AREA IS DOING A GOOD JOB. OWNER ROGER BOTMANN SAYS IT IS A ``COMMUNITY-TYPE STORE'' AND SAYS HIS BUSINESS HAS QUADRUPLED IN 12 YEARS.

CUTLINE: CURT LEREW, ALBERTSON'S VICE PRESIDENT, WESTERN WASHINGTON DIVISION, IN FRONT OF THE KIRKLAND STORE, WHICH IS BEING REMODELED. CONSULTANT MICHAEL KNILANS RATED IT A ``B-PLUS NOW, A WHEN REMODELING COMPLETED.''

CUTLINE: MATT MCVAY / SEATTLE TIMES, 1987: LARRY MCKINNEY, PRESIDENT OF LARRY'S MARKETS, IN THE PRODUCE DEPARTMENT OF ONE OF HIS STORES. KNILANS RATED THE TOTEM LAKE LARRY'S AN A PLUS, CALLING IT ``A STORE I WOULD LIKE TO RUN.''

Yesterday in ``Shopping the Stores,'' we presented a wide-ranging survey of supermarket prices and quality. Today, in the second of the four-part series, a consultant gives his report card on individual stores, and the stores respond.

Blunt, opinionated, pulls no punches.

Whether it was a dazzling array of spanking fresh fish or nonexistent help from clerks, grocery expert Michael Knilans called 'em as he saw 'em.

The Times hired Knilans as a consultant to visit 18 grocery stores in greater Seattle over three days - Aug. 16, 17 and 18 - and rate them.

He covered four Safeways, four Albertson's, four QFCs and two Stock Markets, plus a Larry's Market, a Fred Meyer, Queen Anne Thriftway and Roger's Thriftway. The stores were chosen for geographical diversity and to include what grocery suppliers, union officials and others considered to be some of each chain's top and less-than-top stores.

He rated each store based on a number of criteria, including friendliness of store help, cleanliness, variety, quality and presentation of produce, meat and seafood, delis, frozen foods and more.

Knilans knows of what he speaks.

From 1976 to 1989 he was the president and chief executive officer of Columbus, Ohio-based Big Bear Inc., a well-respected chain of 63 supermarkets and 35 department stores. He is a board director of Ohio's Eagle Food Centers, was a founding board member of the Food Marketing Institute and was a member of a research group of noncompeting supermarkets that visited and critiqued each other's stores around the country.

(He has no connection with any of the 18 stores or any other local chain or store.)

What follows are Knilans' reports on the individual stores and the stores' responses, preceded by short profiles of the stores. The bold type indicates the grade given by Knilans, the store's average score on a test for fresh-food quality (from 1 to 5, 5 being the highest) and the total price of a market basket of 59 items.

Safeway

The Oakland, Calif.-based chain has long been the big guy on the block here. While its market share is known to have slipped from the 38 percent a Seattle Times marketing study showed it had in 1988, it probably still is in the low 30s.

Until a leveraged buyout in 1986, it was the world's largest supermarket chain, with more than 2,000 stores worldwide; now it has 1,111 stores nationwide, with 112 in Western Washington - 55 in King County, 23 with Seattle addresses. Two new Seattle suburban stores are scheduled to open this year, and three next year.

Safeway, Crown Hill:

C, 2.21, $115.31

Older store with limited variety. Produce freshness only fair. Bananas very cheap but should have been discarded. Washington cherries - small amount, quality not up to what is on sale in Columbus, 2,500 miles away. Two grades of beef, choice and select; 10 cent a pound less for select, not enough for the quality difference (should be 30 cents less). Small amounts of beef and lamb. Meat preparation space not clean. Small self-service seafood. Variety of commercial bakery products poor. Fixtures (refrigerator cases, counters) worn. They are really taking advantage of the customers.

Safeway, Holly Park:

D, 2.47, $116.23

A totally outdated store, old fixtures, small departments with no service. No clerks around. Good job at keeping shelves stocked. Choice and select beef, very poor assortment on either, very little price difference. Meat preparation area in bad shape. Small size of store (26,000 square feet) does give some limitations, but Queen Anne Thriftway is doing a superb job in less space (11,000 square feet). You have to give Safeway credit for being in the Rainier Valley (because the other two major chains aren't). But it's just not being fair to the customers in this 1950s-style store.

Safeway, Kirkland:

C minus, 2.47, $115.51

Only reason Safeway does business is that the store is more accessible than nearby QFC. Produce is the only department that rates at all, and it is only C-plus. Freshness OK. I can't believe the old frozen-food cases that used to be open, and they have been retrofitted with doors to save energy but it's hard for customers to reach merchandise. Equipment of this age and condition is inexcusable. Meat department: unbelievable filth on bottom of meat case. Meat clerk told me that many customers want bone-in beef cuts, but virtually all the store carries are pricier boneless cuts. Select and choice beef; some items same price or 10 cents higher for choice. Very small assortment for fresh meat. Cheese island case, nice assortment. Grocery shelves dirty and price tags missing or wrong. Nice selection and presentation on wine. Clerks throughout friendly. This store does not deserve the business it gets.

Safeway, Pine Lake:

B, 2.77, $116.17

This store proves that Safeway can operate a better store. Not the best, but the best Safeway I have been in (in Puget Sound). A beautiful housing area; people with money and kids and big orders. No sizzle in produce department. Did have fresh orange juice. Frozen food variety limited. Better variety meat than most of the other Safeways. Seafood OK, but did not have the fresh look. Cheese island good. Commercial breads good variety. Deli best department. China Express (takeout Chinese), new addition, good. Grocery shelving needs cleaning. Beer, wine - variety good.

SAFEWAY'S RESPONSE

``It's a survey, an opinion,'' said Tom Keller, senior vice president and division manager. ``Obviously you'd like to see things more on your side.

``I guess the only concern I have is that the stores in (the survey) weren't a true representation of our stores now,'' he said. The newest store included was Pine Lake. ``It's a fine store, but it's 6 years old. Naturally your newest store tends to do better.''

Of local stores, Safeway is proudest of its new Woodinville store, he said. Overlake would ``represent Bellevue the best,'' he said; their other two Ballard-area stores would be better than Crown Hill, which is ``very old; we're going to remodel it in the next several years.'' Kirkland, he said, will be expanded if not replaced.

Other in-city stores that would have been more fair to include, he said, are the Capitol Hill store on 15th Avenue East, or the Green Lake or Wedgwood stores.

As for Holly Park, he noted Safeway is serving a low-income neighborhood that other major chains don't. ``We're still there,'' he said. ``The others left the area.''

``We've painted the store inside and out; you don't expand or remodel unless there is opportunity there. In Holly Park there's not a lot of growth.'' Safeway can only remodel so many stores over a period of time, he said, and ``you put money where investment is going to return the most.''

Keller said all three Safeway stores in the Rainier Valley (the two others are at Rainier Beach and at Rainier/Genesee) are marginally profitable, but that Safeway is going to make Rainier/Genesee into a superstore. That store, in a somewhat better-off neighborhood than Holly Park, has higher traffic than the other two.

Albertson's

Albertson's, based in Boise, Idaho, has 523 stores in the west and south, with 43 stores in Western Washington (26 stores in the Seattle area).

It's No. 2 in market share here. In the Times' 1988 study, its share was 12 percent; it's now believed to be about 13 percent.

Albertson's, Kirkland:

B plus, 2.76, $109.04

A good store that will be even better when remodeling is complete (grade would be A after construction). Clerks very friendly and helpful. Excellent produce quality and freshness. Meat department fairly complete with a new service, fish and meat combination. Choice beef with lots of family packs. Good selection of hams. Seafood variety and freshness (very good). One thing that Albertson's is doing better than the others is private label; this represents value to the customer (much is the same product that also is packed for major labels, but for a lesser price). Walk-in beer cooler needed cleaning. Good selection of beer and wine.

Albertson's, Edmonds:

B, 2.67, $104.99

A run-of-the-mill, older-looking store. Neat and clean, for the most part. No atmosphere, not friendly. High-income area, but customers don't reflect it. Produce average. Freshness fair. Housekeeping fair. Meat-department service counter small but well-presented. Seafood service case good. Rotation problems on dated perishable merchandise (out-of-date or close-to-out-of-date dairy items in back). They do not know how to outfit or operate a deli. Stocking standards good.

Albertson's, White Center:

C, 2.85, $108.76

Produce presentation and quality marginal. Wet rack (items that are misted) fair, soft fruit good. Floor generally clean with some debris in aisles. An older, beat-up store with worn-out fixtures. Problems with shelf tags. Choice-grade beef, good variety, many family packs. Limited self-service fish. Meat preparation area fair. Nice bakery. Good stocking standards. Shelves need cleaning. Limited beer and wine.

Albertson's, Renton Highlands:

C, 2.70, $110.56

A very ordinary store. Parking lot needs sweeping badly. Not friendly, but offering carry-out service. Floor in bad shape. Fixtures dirty. Dating problems on some products. Beef choice, much old meat in case. Lamb was unsalable. Seafood very limited. Commercial bakery items good. In-store bakery good. Grocery stocking good. Variety good. Whole store needs a housecleaning. There must be a better store that's getting the area's upscale customers.

ALBERTSON'S RESPONSE

The four Albertson's stores included in the surveys are not a fair representation of the company's newer stores, said Curt Lerew, vice president, Western Washington division.

In particular, he said, the Edmonds and Renton Highlands stores will ``soon'' be remodeled to include some new departments, and Albertson's will remodel or replace the one in White Center.

Lerew said the company will upgrade, remodel or replace almost all older and smaller Western Washington stores over the next five years.

Albertson's new Monroe store is an example of the kind of store the company will be building in the future, he said. The Kirkland store - included in the survey and currently being remodeled - is a smaller version of that prototype.

QFC

QFC is the largest local independent chain and the area's third-biggest chain, with 27 stores. It plans to open three more in the next year and remodel ``several'' in the next two years.

QFC, Kirkland:

B plus, 2.91, $113.64

Upscale customers and store pretty well match. Floor needs good cleaning or replacing. Produce generally outstanding; good variety, fresh; but all green bananas, not good for Friday when customers want to use them. Frozen food limited though fixtures good. Beer and wine selection, presentation good. Two choice beefs, regular and light; at 40 cents a pound more for light, price differential is too high. All meat items in good shape, good selection, preparation area spotless. Seafood, small self-serve. Friendly clerks. Commercial bakery items, excellent selection. In-store bakery, small but excellent presentation and variety. Grocery variety good, but shelving needs cleaning.

QFC, Northgate:

D, 2.64, $114.17

Produce department limited, but good presentation (also all green bananas). Floor in poor condition, fixtures old. Ice-cream case dirty. Meat department terrible; many outdated packages, most beef too dark to sell. Small-size packages to go with the customer base. Seafood variety poor, quality OK. No clerks anywhere. A mistake to try to operate a supermarket in a mall. Serves more as a convenience store for mall shoppers. It looks to me that they are running the store to the end of the lease and then closing it. No great loss to the public.

QFC, Bellevue Village:

A, 3.00, $114.23

Definitely upscale customers, big orders, busy store. Produce excellent. Ripe bananas for a change. Good variety of frozen food, well-maintained. Choice beef, good selections of veal and lamb. Service meat, seafood, excellent. Cheese shop good variety and quality. Commercial bakery, good variety. In-store bakery somewhat limited on counter space, good product. Deli excellent variety and quality. Hot food only fair. Excellent beer and wine selection and quality. A fine store.

QFC, Gateway:

A, 3.12, $114.43

A well-run, friendly store. Produce good but not up to rest of store. Meat department excellent with good selection of choice beef, veal and lamb. Cheese island excellent. Commercial bakery items good. In-store bakery small but very attractive. Deli excellent; prep area clean, best department in store. Clean, well-stocked grocery. A nice place to shop.

QFC RESPONSE:

Dan Kourkoumelis, president and chief operating officer, said he believed the selected stores were a representative cross-section, but would have preferred we included one of QFC's new stores, such as the one at Crossroads Shopping Center in Bellevue.

He had no other comments on the surveys, other than, ``I thought it was real interesting.''

Larry's Market

Larry's Market, Totem Lake, is one of five stores in an independent local chain owned by Larry McKinney. At 61,000 square feet, the Totem Lake store is the largest in the Kirkland area, McKinney says.

Larry's, Totem Lake (Kirkland):

A-plus, 2.70, $116.30

A store I would like to run. Truly outstanding in every respect. I could have had a complete meal just from the sampling, but I decided to eat in their restaurant. The pie was for scientific purpose to see if they had quality in the baked-on-the-premises items. Food was good. Produce department is as good as I have seen anywhere; every imaginable item, including a selection of organic produce. Large fresh-juice and cut-fruit sections. Sushi counter, unusual. Meat department very complete with three kinds of beef, select, Angus choice and natural. Interesting price spread, select T-bone $5.39 a pound, choice T-Bone

$6.39, service case aged T-bone $10.49. That's a tremendous spread; not that much difference in the meat. Seafood outstanding in freshness and variety. Frozen food, cheese shop, large varieties. Bakery, superb. Deli, from microwave entrees to a full range of cold and hot foods, all appetizing. Bulk merchandise, very well done. Beer, full selection. Wine, best I have ever seen in size and selection, from $4 local to $50-plus bottles of fine wine; worth the trip by itself. Larry's is really a shopping experience. Extremely friendly, well-trained employees. People will travel a long way to shop this store. In our research group, if we ever visited such a store we would be unable to come up with any improvements.

LARRY'S RESPONSE

Larry McKinney, president of Larry's Markets, said the comments reflected Larry's commitment to an emphasis on ``quality, selection, service level, shopping environment, health and nutrition, and being attuned to how we eat (these days).''

McKinney said Larry's offers superior prices on certain gourmet-type products popular with the store's customers - a particular Bordeaux, for example, or a large tin of an olive oil. The savings gained by buying those items at Larry's ``could put us on the lowest price list,'' he said.

Fred Meyer

Portland-based Fred Meyer includes eight stores in the Seattle area that carry groceries among greatly varied merchandise. All eight are in suburbs.

Fred Meyer, Kirkland:

A, 2.61, $103.92

A well-run food department with a great deal of additional general merchandise. Produce, excellent presentation and freshness. Not as dramatic as Larry's, but well-done. Good cut-fruit and juice bar. Meat preparation area in good shape. Frozen food, excellent variety. Cheese shop, excellent variety, with sampling. In-store bakery prep area open and clean. Good merchandise, good variety. Deli very good with pasta, excellent sandwiches and salads. Wide variety of beer and wine.

FRED MEYER'S RESPONSE:

Larry Ofstedahl, senior vice president, director of food division of Fred Meyer, said he expected that Fred Meyer's prices would be at or near the bottom because of its ``everyday true minimum pricing'' policy, a strategy begun 1987.

That policy, he says, contrasts with the ``high-low'' pricing conventional stores practice. In the ``high-low'' strategy, Ofstedahl says, a store offers attractive weekly specials that may be priced even below cost, but makes up for that in higher prices for other items.

In a common practice, Fred Meyer employs zone pricing, which means individual stores set different prices depending on competition in their immediate area. Ofstedahl characterized Kirkland as ``a very competitive area.''

``Kirkland is a good store for us. It's not our newest or best, it's not our highest volume by any stretch. Auburn or Federal Way will be better. If you picked Midway we wouldn't be happy. It's an old, tired box store that hasn't been remodeled. Kirkland is a remodel. We wouldn't build it today.''

Stock Market

Stock Market Foods is a Gig Harbor-based chain of 14 stores in Western Washington that includes two Seattle and four suburban Seattle stores. It has a bag-your-own, discount-warehouse format.

Stock Market, Rainier Beach:

B, 2.58, $106.89

Discount-type operation with a definite low-price image. Quality of merchandise pretty good. Produce department had plenty of merchandise; some needed to be removed. Clerks and managers very friendly and helpful. Housekeeping fair. Bulk-foods department, which can lend itself to untidiness, was immaculate. Meat department offered choice beef, fairly trimmed and fresh. Visible meat-prep area not in good shape. Large number of family-pack meat items giving good value. No attempt to appeal to the health-conscious shopper with lower-cholesterol meat items. Seafood variety was fair with good quality and signing; cleanliness excellent. Delicatessen fair to poor. Commercial bakery variety good.

Stock Market, Federal Way:

C, 2.91, $106.31

``Wall of value'' at entrance fine. Deli island a good idea but not done very well. Not much pizazz that such a department needs (ordinary food, nothing different or special to bring you back). Seafood, self-serve, very limited. Meat department had many reduced items in the case, dark meat on top of the good-looking fresh cuts. A lot of family packs in this store with big orders. Produce department, attractive from a distance, only fair close up. Bananas bad, melons fair, soft fruit good, freshness fair. Good variety of frozen food. Commercial bakery variety fair. Bulk foods neat and clean. Warehouse racks clean. Floor in bad shape. Grouping of products often illogical or unappetizing.

STOCK MARKET RESPONSE

A. Keith Uddenberg, president of Keith Uddenberg Inc., parent company for Stock Markets, says, ``We're always interested in constructive criticism.'' But he said the two Stock Markets in the survey were among their older stores. The company's new stores, in Kent, Everett and Bonney Lake, he says, would be ``representative of the stores we're doing now.''

Queen Anne Thriftway

Queen Anne Thriftway is independently owned and a member of Associated Grocers Inc., a wholesale cooperative that also produces cooperative advertising for members. President Dick Rhodes and two minor stockholders own both the Queen Anne Thriftway (which Rhodes bought in 1971) and the Admiral Thriftway in West Seattle, as well as the Boulangerie bakery in Wallingford, which supplies the stores.

Queen Anne Thriftway:

A, 2.88, $114.31

Not a large store, but overflowing onto the sidewalk with great merchandising. Busy; definitely a store to appeal to the high-class. Produce department outstanding with variety and freshness. Great variety of appetizing choice beef, veal and lamb; excellent trim, very fresh. Many selections to appeal to the health-conscious. Seafood department the best self serve that I have ever seen. Lots done in small space with self-serve cheese shop. Self-serve bakery with a hostess; good-looking product. Stocking standards excellent. Many gourmet items. Fixtures very good. Attractive outdoor floral. Beautiful presentation on wine. A lovely store to shop.

QUEEN ANNE THRIFTWAY

RESPONSE:

President Dick Rhodes said he thought ``your methodology was pretty good; it's a pretty good (grocery-item price) list.''

Roger's Thriftway

Roger's Thriftway is independently owned and a member of Associated Grocers Inc. Owner Roger Bottman has operated the store since 1976, and also co-owns a store in Mountlake Terrace, The Food Merchant.

Roger's Thriftway:

C, 2.55, $115.75

He's doing a good job in this small store in a lower-income area. Produce department neat and clean with fair variety and good quality and freshness. Some dirt in frozen-food cases. Choice beef, trim OK, dating OK. Very limited seafood. Some dating problem in dairy department (a lot of items had today's date; shouldn't leave anything within a day or two). Deli OK.

ROGER'S RESPONSE:

About the comments, Bottman said that, ``On any given day, there will be things wrong.'' He was unhappy about the comment on dairy-product dating. A one-time-only inspection wasn't fair, he said, because the dairy products would have been removed by the next day. ``They aren't kept beyond the marked date.''

While the store is doing ``average-well,'' he said, shoplifting and bad checks take a tremendous toll. A penny of profit on a dollar of sales is typical for stores. In Roger's case, ``if a quarter of a penny goes to loss, and we can't raise prices because Safeway won't raise prices,'' squeezing profits becomes even more problematic.

But actually, he says, there is so little competition in the Central District that he could raise prices. There's only one other Thriftway, and a Safeway relatively far away on Capitol Hill, and many of his customers must walk to the store. So ``the majority of my customers would shop here even if prices were a little higher. But that's not my philosophy.

``We're a community-type store; we don't have a lot of transient types; we have to have our customer confidence,'' he said. It's a long-term strategy that has paid off, he says; ``our business has quadrupled in 12 years.''

Tomorrow in Scene: Why the Seattle area has the stores it does and what's in store for the future.

-- Wednesday in Food: How accurate are the price scanners supermarkets use?