Natural Foods Merchandiser

Bashas' to open natural foods supermarket in Arizona

Details are hush-hush on the latest foray by a conventional grocer into the natural foods market.

Bashas', a 153-store chain with a presence in Arizona and parts of New Mexico and California, is planning to launch Ike's Farmer's Market in Phoenix next year, said Bashas' spokeswoman Diana Medina. "It's still in the conceptual phase," said Medina, who didn't know how large the store would be, what it would carry or when it would open. "I'm guestimating August [2006], but that's not set in stone." Medina also said Bashas' may open more Ike's Farmer's Markets in the future.

Johnny Basha, son of co-founder Ike Basha, told The Arizona Republic that company officials visited natural foods stores throughout the country and spent two years developing the Ike's Farmer's Market concept: a high-end organic and natural food store with "extremely competitive prices." Basha also promised "massive produce displays. It's going to be fun," he told the Republic.

Chandler, Ariz.-based Bashas' already operates a gourmet chain, AJ's Fine Foods, along with Bashas' Dine Markets on the Navajo reservation, and Food City stores, which are targeted toward Hispanics. It also has Natural Choice sections in 30 of its stores.

Although Bashas' supermarkets posted $1.8 billion in sales last year, it's a good idea for the company to move into the natural foods market, said Jay Jacobowitz, president of Brattleboro, Vt.-based Retail Insights.

"The conventional grocery business is dead, so the winning formula now is either quality or price. Stores have to make a choice between the Whole Foods end of the spectrum or the Wal-Mart end of the spectrum."

Jacobowitz said there is room for conventional grocers to compete with natural foods supermarkets, but their emphasis should be on perishable products (67 percent of supermarket sales, according to Jacobowitz) and customer service. "Customers have more choices than ever, so they're going to pick the place that makes them feel the best."

Price isn't as important a factor, he added. "Just because there are more naturals stores now doesn't mean price is the main component" determining where consumers choose to shop. "Customers are willing to pay more; people who have had fewer [supermarket] options in the past are willing to trade up."

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