Recipe for change: the retail makeover

You can make over your neighbor's house. You can have your own house made over while you're out fishing. You can "pimp" your chopper, your car and your crib. You can have teams of designers, carpenters and specialists working for you in the quest for the perfect reality-show-filmed rumpus room. And now, courtesy of Delicious Living magazine and a team of experts, the first pimped health foods store—without the annoying film crew tracking mud all over the place.

At the 2006 Natural Products Expo East, put on by New Hope Natural Media, The Natural Foods Merchandiser's parent company, Steve and Nancy Long, owners of Harmony Farms Natural Food Store in Raleigh, N.C., won the Retail Store Makeover, including advice from three longtime industry veterans.

Harmony Farms is a 3,600-square-foot store with 2,600 square feet of retail space. According to the Longs, the store's mix consists of natural and organic foods, supplements, health and beauty aids, literature, water/products and spirit gifts. Grocery takes up the most space in the store, at 1,400 square feet; supplements is 800 square feet; HABA, 300; literature, 200; water, 150; and spirit gifts, 50. Supplements account for 40 percent of sales; grocery, 36 percent; HABA, 13; literature, 6; water, 4; and spirit gifts, 1. In 2006, Harmony averaged 91 customers per day with an average ring of $26.41. The Longs have owned the store since May 2005, but Harmony has been around for 30 years.

The winners
"We're looking forward to having assistance on our store situation in regard to putting in a small freezer, working on signage and maximizing our cash-wrap area," Steve Long says. The Longs already have done two major resets in the store, and are "tickled pink" to have help building on the success they've had thus far. Neither has a background in managing and owning the grocery side of the business.

"I think that the experts will have some clever ideas of how to maximize the cash wrap, which is a tad junky and disorganized. It does all right for us, but it's still definitely a part to improve," Steve says. "We'd also like some really useful ideas on signage that will add that final touch to our store."

The Longs have done quite a bit of work refurbishing the store, taking a "very granola" space and easing it into a "whole-household" shopping experience. And, while Steve says that sales reflect a process already well on its way, the Longs are hoping that implementing the makeover suggestions will put the store "over the top" in their long-term plan.

Steve says the natural foods business is no place to rest on your laurels, and having a fresh eye will help the Longs stay ahead of a rapidly evolving market. "Tell you what," he says, "especially in something like [natural products retailing] that is evolving and changing every day, if you don't realize that there's something new for you to learn, it's time for you to go somewhere else."

The team
Zedrick Clark is owner and president of Nature's Food Market in Berlin, Ohio, and an industry consultant with 15 years' experience in all aspects of natural foods retailing. He has managed three natural foods stores, and Nature's Food Market saw a 45 percent increase in sales in the first two years of Clark's ownership.

Cheryl Hughes is owner of The Whole Wheatery store and restaurant in Lancaster, Calif., and a former member of the regional and national boards of the Natural Products Association, formerly the NNFA. She served as the retail chairwoman for the Organic Trade Association in the development of good organic retail practices, and is a past recipient of the Cliff Adler Heart in Business award.

Bill Crawford, director of retail publishing programs at New Hope Natural Media, spent 12 years on the management team of a major natural products chain, with a primary focus on purchasing, marketing and category management. He teaches university-level courses in strategic management, business policy and marketing.

The doppelganger
Zedrick Clark was struck by the similarity between his situation and the Longs': buying a store that has a long history but is in need of updating, as well as working as a husband-and-wife team as Clark and his wife do. "I was saying the same thing [Steve] was a year and a half ago: 'We're maxed out on our square footage,'" Clark says. "We had a lot to contend with in the store."

One answer to the small-store conundrum is to do more with less, and Clark says he'll recommend this to the Longs. "Personally, I think that natural foods store owners, especially your smaller, successful natural foods store owners, we tend to have this overstock syndrome where we like to carry a lot more products than we need on our shelves. That's one thing I'm hoping to do is allow them to maybe minimize their inventory to increase their amount of turns throughout the store and increase their bottom-line profitability," he says.

This profitability segues directly into how the Longs can squeeze every last inch out of the front end of their store, and maximize the impact of their signage. "Developing the look of the signage, how exactly they want to do it, there's a lot of different options when you're talking signage," Clark says. "You can shelf-mount your signage. You can mount it from the ceiling. You can have it direct-mounted onto your gondola. You can have poles that extend it up. So there's a lot there to how they want to have that set up. And the same way with the cash wrap—it's not only the look, but it's also the profitability."

Clark says part of the answer lies in the core—merchandising. "I've heard it said that as much as 70 to 80 percent of all retail purchases are impulse buys. In our industry I think sometimes it's reversed," he says. "What we want to do is be able to have them come into the store and things to look so nice that they just want to pull them right off the shelves and put them in their cart."

He plans on working with the Longs to find the balance between maximizing retail space—with an eye toward fitting in that freezer—and milking the inherent appeal and warmness of the store's many windows. "When you have a store that has an aesthetic appeal to it, if the products are properly merchandised, the sales will come on their own," he says.

The gal from Cal
"It's a huge makeover, but my No. 1 suggestion would be that they flip that store around to some extent," Hughes says. The Longs currently have a seating area near the front door that Hughes says "is the most expensive real estate they own. Why don't they put that in the back?" She recommends making people pass through the store to reach that seating. "That front space becomes much more merchandisable with things that are going to make them a lot of money."

Part of that overhaul would include making a big change to the U-shaped cash wrap—which Hughes calls the "old way" of doing it. "They probably inherited it. And they have to be brave and break that up into three checkout lines," she says. "And they will maximize their space for impulse items and control their traffic flow."

Natural Foods Merchandiser volume XXVIII/number 3/p. 56, 58, 60