Nehring's Family of MarketsDate: 04/01/08 | Source: Specialty Food Magazine | Author: DENISE PURCELL
Categories: Industry Operations; Retailers | Tags: Retailer Profiles
THE NAME NEHRING'S SENDIK'S ON OAKLAND IS TOO MUCH OF A MOUTHFUL NOT TO HAVE A STORY BEHIND IT.
The story began a decade ago, when John Nehring, the specialty food and wine buyer at a branch of Milwaukee's Sendik's chain, decided it was time to make a career move. "I'd been working in retail for 24 years, but didn't have a piece of a business," he explains. So, Nehring approached the owners of the Sendik's chain about buying their Oakland Avenue location in Milwaukee's upscale Shorewood neighborhood. In short order, he was let go from Sendik's and free to start his livelihood as a specialty food store owner.
"I talked him into it," admits wife Anne Finch Nehring. "I felt he was so good at what he did so why not do it in his own store." John took her advice with one stipulation—that his wife, at the time a principal dancer with the Milwaukee Ballet, help him run the business.
John was ultimately able to buy the Sendik's location that he wanted, though a condition of the sale was that the name Sendik remain attached to the property. This drove the selling price to $1.6 million from the approximately $300,000 the real estate was valued at back then, but he agreed because he wanted the recognition and customer base that came with the Sendik's name. "He had been working behind the scenes in specialty food and didn't have his own name in the business the way he does today," notes Anne. In fact, a wholesale account vouched for him to get the bank loan to buy his original store.
One year later, in 1998, the former Sendik's location was reborn. Today, Nehring's Sendik's boasts $185,000 in weekly sales, and is a key piece in the success of a stable of specialty food ventures, including another specialty food store, a catering operation, a restaurant and a new shop currently under construction. "After I got the first opportunity to own my own business, I almost had to take others that came along," notes John.
Transforming the Store
From day one, the Nehrings instituted cosmetic and operational changes at the Oakland Avenue store. "The floors needed to be replaced, we changed out shelves and took out dated-looking displays," John says. He expanded with wine, a cheese department, a deli and added a kitchen to the 12,000-square-foot store, leaving 10,000 square feet for the sales floor. John also opened on Sundays to accommodate the perishable nature of his best-sellers like produce. "Some existing customers were unhappy with the changes, but those who would become our loyal shoppers loved it," he says.
John continued to develop the produce and wine departments, where he had a lot of background. Eighteen of his years in retail were spent in produce, including a stint at Milwaukee specialty food store V. Richard's Market as the produce manager. "They were doing a lot that no other store in the area was doing at the time," he explains. From there, he went on to develop other specialty departments including wine, cheese, bakery, deli and grocery at V. Richards and later at Sendik's.
Today, the produce department is a signature feature at Nehring's Sendik's, comprising 20 percent of sales. The majority of the offerings are local from markets in Milwaukee and some from Chicago, and customers support the seasonal availability. "Summers are busier here than the holidays because of the fruit and vegetable selection we're known for," says John.
The deli, with a mix of about 30 salads, sandwiches, pan-ninis and 20 entrées, including six to eight hot dishes, is also a leading department. "The hot case turns over about five times per day," notes John. Entrées are made on-site by a kitchen staff of six. Catering is also handled in-house, except for large orders, which are done through Trés Bon, the Nehring's catering business.
Customers rely on the store for one-stop shopping with its mix of about 75 percent specialty items and 25 percent mainstream products. Nehring's Sendik's conducts approximately 7,800 transactions per week. "We see some people three times a day, around breakfast, lunch and dinner," John explains.
"Shorewood is an affluent area," he continues. "Our customers know what they want. They often ask us to bring in a product that they've discovered. Sometimes, I'll order a case and keep it in the office for just one person."
John does the specialty food and wine buying himself, and has trained the new produce buyer. He also oversees the wine department with General Manager Jean Knoeck, who started with the store in high school as a cashier. Jean also supervises the bakery. "My philosophy is that the store manager should also have other areas to run," John explains. "The job's about more than walking around the store, they should be a part of things, just like the owners should be hands on."
Dealing with Competition
An influx of chain retailers continues to increase competition in Milwaukee's food retail landscape. Whole Foods Market, Trader Joe's and Greensboro, N.C.-based chain Fresh Market have all opened outposts and local chain Pick 'n Save, part of Roundy's Supermarkets, Inc., has been adopting a more specialty bent in product selection. "We feel the sting. Each one takes from the pool," says Anne. "Any retail store that sells food in the area has an effect," adds John. "So far, [Nehring's Sendik's] hasn't taken much of a hit. Whole Foods took about 2 percent from us; Trader Joe's another 1 percent. It's not much, but that's still 3 percent."
Expanding the Family
Competition hasn't stopped the Nehrings from taking on ambitious expansion plans. They purchased G. Groppi, an Italian market in the city's Bay View area, in 2003 and extended the 2,100 square-foot store by 2,000 square feet to add a deli, cheese counter and wine, beer and liquor department.
G. Groppi, which is today managed by daughter Katie, has remained largely unaffected by competition because it's a tradition in the neighborhood, says John, who grew up shopping there. "I used to go with my mother's shopping list. It was the kind of place where you'd pay on account and get sent home with candy. It still has a social aspect that the neighborhood loves," he says.
Past ties also drew Nehring to purchase V. Richards, his one-time employer, in 2002. "It was going into bankruptcy, but John felt he really knew that store and could turn it around. And for a time, he did," says Anne. But, consumers in V. Richard's Westside neighborhood are made up of more big-chain shoppers, the opposite of the bases at Nehring's and G. Groppi, who often shop on a daily basis for fresh foods. Whether V. Richard's stays in the Nehring family of stores is yet to be seen.
Each store operates as its own LLC, with its own staff, but they share some production efficiencies. For instance, scratch baking (except for bread, which is outsourced) is done from V. Richards for the other shops, while produce is shipped from Nehring's Sendik's to supply V. Richards. Moving baking operations opened up another business opportunity. The original baking facility, also located on Oakland Avenue for eight years, was reinvented as a restaurant, recently reopened as Juan Pedro's Cantina.
The Next Challenge
The retailers' latest venture is a new specialty supermarket, slated to open in 2009 in Brewers Hill near the Milwaukee River as part of a $12 million riverfront development of businesses and residents. The store will be about the same size as the current Nehring's Sendik's, but will employ some features customized to the new location and clientele. For example, the area has a lot of young executives and empty-nesters so the merchants will offer an expanded deli area. It will be similar in concept to EatZi's, Dallas' gourmet takeout market, explains John. "We'll have a deli, sandwich center and grill, and meat and seafood will be located near the kitchen so customers can purchase items to get prepared on-site," he adds.
The biggest change, however, will be on the front sign: The new store's name will be Nehring's Family Market. "Our customers think of us as Nehring's," says John. "Sooner or later our first store will be renamed too."
Denise Purcell is editor of Specialty Food Magazine.
NEHRING'S SENDIK'S ON OAKLAND
4027 N. Oakland Ave.
DATE OPENED: 1998
FULL-TIME STAFF: 50 PART-TIME STAFF: 30
LOCATION: Free Standing
TOTAL AREA: 12,000 sq. ft. SALES AREA: 10,000 sq. ft.
CUSTOMER BASE: Families, empty nesters, local businesses, students
AVG. WEEKLY TRANSACTIONS: 7,800
EST. WEEKLY SALES: $185,000
ESTIMATED SALES DISTRIBUTION
MEAT AND SEAFOOD: 13%
FIVE BEST SELLERS: TK