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Grocers carve middle niche
Every chain begins with a link. These grocers are expanding by forging links to their neighborhoods.
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Dale Riley of Fresh Seasons Market
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Guided by more than 35 years of experience, Dale Riley appears to have figured out that there's a comfortable niche between big-box supermarkets where the focus is low prices and higher-margin gourmet grocery stores.
Fresh Seasons Market, his conventional grocery store that touts selection with a high level of service, is nearing its third year of business in the quiet Glen Lake neighborhood of Minnetonka. Now Riley and his business partner, Tom Wartman, are preparing to expand their one-store empire to Victoria.
"At first people weren't quite sure what we were all about," Riley said. But business has grown steadily and sales should top $12 million this year, he said.
While the Minnetonka store is surrounded by competitors, including Cub, Lunds and Kowalski's, none is closer than 3 miles, an advantage that has helped Fresh Seasons develop a local customer base, Riley said.
"There are all kinds of reasons why people choose to shop at one place rather than another. For some people it might be organic products, which we do offer," he said. "But the biggest factor is whether it's convenient to their home."
Victoria is even more under-served, with no sizable competitors within about 5 miles, Riley said. Plans for the store are still going through the city approval process, but Riley said he hopes to begin work on it in October and open for business in April. The 28,000-square-foot market will be in a former lumber supply building, and like the Minnetonka store, also will include a Zoss Drug.
New store gets city help
Victoria will sell part of the site to Riley and Wartman and establish a tax-increment financing district to help fund the project, according to Holly Kreft, Victoria's community development director.
Kreft said a neighborhood grocery store is a good fit for the town, whose population is about 6,400.
"We don't have a grocery store, but we were not interested in having a big-box market," she said. "We think this will be a service for our residents and could encourage other development in our downtown."
The Victoria market's format will be the same as Minnetonka's, which Riley said he furnished mostly with used equipment at about half the cost of all-new furnishings.
"If you spend more on furnishings, you're upping the ante in terms of what you need to do in volume," he said.
Despite the Minnetonka store's simple decor, it doesn't give the impression of a bare-bones operation. The concrete floors are painted in warm earth tones that match huge posters of vintage food ads, which serve as the store's primary decoration. Shelves at the ends of aisles are metal rather than the more expensive wood shelves typically found in upscale markets.
The store has 65 employees, including Riley and his wife. The back-office staff is lean, with department managers also serving as buyers.
Pointing to a line of premium meat products in the deli case, Riley said the decision to carry the products was made by the deli manager. "If we'd had a buying committee to kick this up to, the decision would have gotten lost in the shuffle," he said.
Edina-based Nash Finch Co. is the primary wholesaler for the Minnetonka store and also will serve the Victoria location. However, Riley said a Victoria florist will supply flowers and a local butcher shop will supply some of the meat products.
Riley, who has served as an executive at Byerly's, Lunds, Kowalski's, Rainbow and Supervalu, said he and Wartman are looking at sites for additional stores.
"We think there could be some opportunities along the light-rail line and other small suburbs like Victoria that don't have their own markets," Riley said.
Susan Feyder • 612-673-1723
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