Monday, February 16, 2015

Redner's succeeding by controlling costs

A Supermarket News story earlier this month reported that employee-owned Redner's Warehouse Markets is competing successfully with Walmart and others thanks to rigorous cost controls. The company's site selection strategy serves as a good example of these controls.

"We tend to go to smaller rural towns or the outskirts of urban areas just due to the negotiations and site selection that we use," said Redner's spokesperson Eric White. "We try to go to existing stores without having to build from the ground up."

Supervalu serves as Redner's supplier, but in effort to save money, the company buys direct and in bulk where it can. It also refrains from costly marketing, choosing instead to invest promotional dollars from manufacturers into the cost of goods.

Redner's tries to price its goods within 5% of Walmart on many items, and while Walmart has struggles in recent years with empty shelves, Redner's minimizes their out-of-stocks.

Although "warehouse" is still in the company name, in recent years the store has shifted to become 75% traditional supermarket and 25% warehouse.

"The bulk product that we were once able to offer isn't quite what the everyday consumer is looking for," according to White. "But consumers will come in and find that we're a traditional family-owned grocery store."

Redner's currently operates 44 Warehouse Market stores and 20 Quick Shoppes, and has an estimated $868 in annual sales.

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