NFM sought out the advice of Edward Parker, director of sales and marketing at Design Services Group in Minneapolis, to find out where retailers should start when thinking about a renovation project. His first recommendation is to analyze your market, then develop a store plan based on the results. Parker advocates for staffing your project with industry experts, looking for discounts, then maximizing the marketing possibilities of the new store.
Time for an upgrade? Beginning the renovation process can seem overwhelming if you don’t start with the basics. “Supermarkets are extraordinarily complex beasts,” Parker says. Parker and his colleagues run a unique consultancy that helps retailers design, build and outfit their food stores—from choosing flooring to selecting the right deli equipment. His specific suggestion for natural-foods retailers? “Energy efficiency. If you’re going to walk the walk and talk the talk, you have to have equipment.” Here are the rest of Parker’s suggestions for how to smooth out the renovation process.
Analyze your market and develop financial goals
“The selection of equipment comes down to your anticipated return on investment,” Parker says. That’s why he recommends spending the money and hiring a firm to analyze whether the local market will “pay you back” for the remodel. Market researchers compile census data, local data and a competitive analysis to help you decide what your budget should look like. You tell them what you’re trying to accomplish, and market analysts will tell you whether or not you can reach those goals, as well as how much you can expect to bring in per week. “Identify growth expectations to determine whether your budget is in line with them,” he says.
Even barring a renovation, Parker recommends doing a new market analysis every 10 years or so; without careful observation, you might never know how your community is changing. “If your community just had a baby boom, you could be making a lot of money selling baby products,” Parker says. “You have to stay current.” Parker also recommends doing primary research with current customers and employees to track their observations.
Develop a store plan
“Think of the store plan as the simplest architectural document—a bird’s-eye view of the store,” Parker says. The plan will help determine the flow of the shopper and your store. “The store plan is one of the least expensive parts of renovations” Parker says. But it’s important to spend a lot of time and energy on it. Parker recommends using a professional store planner, especially one who’s an expert in the grocery industry.
Another important consideration is where you put your equipment investments. Replacing deli equipment, for example, might be the first place you look, but if the deli isn’t pulling in enough business to warrant it, look elsewhere. “Ask yourself, what department is pulling in enough business?” Parker says. “Produce is a great place to put your money.” He adds that the perimeter departments, including the bakery and meat counters, are also good places to spruce up, as well as any private-label-merchandise areas you might have.
Work with experts in the industry
Parker suggests hiring a project manager, someone who’s very involved in the grocery business, to oversee the renovation. He or she will know how to work with designers and architects, know how to get you good equipment deals, and will even get in contact with used equipment buyers to haul away your old stuff. (As a side note, Parker recommends talking with contractors who are removing old equipment to make sure they’re properly recycling old shelving and potentially toxic pieces. “When you’re ripping out a refrigeration system, you have to be careful,” Parker says, adding that refrigerant itself can be environmentally harmful if not properly disposed of. “Any good contractor should know this.”)
To find good contacts for contractors, project managers, architects and store planners, talk to your grocery distributor. “Your wholesaler will definitely be able to steer you in the right direction,” says Parker, who warns of working with people outside the grocery industry. “If you hire a firm that hasn’t done it before, there are so many things that could get messed up. It will cost you money down the road.”
Look for discounts
Parker says he often counsels clients to look for rebates from their local energy supplier, who will help pay to renovate high-energy-use components like lighting. “Bulbs lose their efficiency and their brightness,” he says, adding that three years is the maximum life for lightbulbs. In addition to a cost savings, Parker says that his clients often see a 1.5 percent increase in revenue when they relamp. “When you consider that an energy company might actually pay you to relamp,” he says, it’s a no-brainer.
Finally, if you can afford to buy new equipment, do it. But don’t hesitate to buy used where you need to. “You can save more than 50 percent on your equipment purchase by buying used,” Parker says.
Develop an implementation and marketing plan
“Make sure your employees know how to talk about the store,” Parker says. Customers can be confused by a renovation and need help orienting themselves to the new store. Train your staff accordingly, and use the new environs to give your store a marketing boost.
Find out more about getting your existing store a Leadership in Energy and Environmental Design (LEED) certification