Yes! Organic Market creates its own market share
Thursday, September 23, 2010
Gary Cha would lie awake at night worrying whether his health food stores would survive the arrival of a big new challenger.
When Fresh Fields opened a 37,000-square-foot organic shopping smorgasbord for D.C. residents in December 2000, almost immediately sales at his Yes! Organic Markets plummeted by nearly 60 percent.
"It was really tough for us," said Cha, who bought his first store at 1825 Columbia Rd. NW in 1983 and opened two more by 1999. "We barely survived."
Instead of going out of business, Cha found a way to keep the doors open and sleep better at night. His plan was simple: expand to areas where large retailers wouldn't go and listen to customer input on which products to stock.
So far, his strategy appears to be working. This month, Cha opened his seventh Yes! Organic Market, at 2321 Pennsylvania Ave. SE in the Fairlawn neighborhood. It's the second supermarket to open in Ward 8 since 2007.
"I think people here deserve better," Cha said. "We want to be a part of the community."
Although the market is new to the neighborhood, Cha said, some customers were familiar with the store. Since the opening, he "saw a lot of familiar faces" that once shopped at the Capitol Hill location, he said.
Learning where his customers lived gave Cha an advantage on choosing where to open a new location. While looking for a location for his third store, he quickly discovered that many customers were coming from the Brookland neighborhood in Northeast.
Cha said he drove around the neighborhood and found a suitable building -- a former Safeway grocery store. The store closed in 1982 and was converted in to a senior day-care facility.
The 8,000-square-foot Brookland store opened in fall 2006, Cha said. It had a loading dock and enough space to store products for all three locations, giving him more buying power with wholesalers. "They saw that we could potentially be a big buyer," he said.
Real estate developers also took notice. They began to partner with Cha to occupy the retail space of mixed-use projects that featured affordable housing units. Those partnerships led to markets opening on 14th Street NW in 2008 and Georgia Avenue NW in 2009.
Although Yes! Organic Market typically has less inventory than larger grocery stores, Cha said, customers have a great influence on what products are stocked. That allows him to move quickly on their suggestions, an advantage that makes it difficult for larger stores to compete, Cha said.
"If we're playing their game, we'll lose," he said. "You want to do something else that they don't do well."