Giant Open Air markets, a major independent supermarket chain in Tidewater, has a lot of Jewish customers at one of its stores in Norfolk. So the delicatessen there always has plenty of lox, kosher salamis, herrings and cream sauce, and white fish.
At another Giant Open Air in nearby Hampton, there's a large concentration of German customers. That delicatessen carries German favorites such as mettwurst, a liver-based spread, and jagerwurst, a meat-loaf-like product.
"Offering the consumer items that are not available elsewhere is very important to our success," explained Ron Rosso, vice president of marketing of Rosso & Mastrocco Inc., owner of the Giant Open Air chain.
Giant Open Air is one of Tidewater's five major locally owned supermarket companies, or independents. Its practice of responding to the market's individual peculiarities is typical of independents here -- and is one big reason why their market penetration is unusually strong.
Big national food chains such as A&P, Big Star and Safeway overwhelm independent grocers in many markets, but Tidewater's independents split the market about evenly with them. According to marketing surveys by the Norfolk newspapers, independents had 46.5 percent of Tidewater's food store business last year while the nationals had 49 percent.
The performance of independent grocers here is strong enough to prompt the National Association of Retail Grocers, which represents 40,000 independents, to call Tidewater "one of the strongest independent grocery store markets in the country."
Tidewater's independents say they know the market better, and that they're more flexible about responding to local needs and desires. "We don't have to look at store reports weekly or biweekly before changing things," says Warren Aleck, owner of Earle's Markets, another local grocer.
Indeed, independent supermarkets nationwide have enjoyed a resurgence of sorts since the start of the 1970s, when the U.S. Commerce Department predicted that major chains would grab 75 percent of all grocery sales by the end of the decade.
But independents last year had sales of $86.6 billion compared with $84.2 billion for major regional and national chains. They also were more profitable. According to the Food Marketing Institute, a trade group, independents averaged a profit margin of 0.95 percent in 1977 (the latest figures available) while the big chains averaged 0.76 percent.
What happened to the Commerce Department's prediction?
With the end of the 1950s baby boom and the growth of fast-food restaurants, supermarkets sales aren't increasing as fast as they once did, the institute said. Now that the name of the game is improving market penetration, tailoring stores to the local market is increasingly important.
National chains often try to do this, but they don't have the adaptive flexibility of locally owned operations, the institute said. "We have found that a well-run, locally owned store can compete successfully against the big chains because of their local identification and local control," said Frank Register, president of the National Association of Retail Grocers.
Tidewater's independents nonetheless stand out from the herd because local grocers tend to enjoy their greatest strength in smaller cities and rural areas.
In major metropolitan markets such as Norfolk, independents often are hard-pressed to compete with the sophisticated advertising and merchandising techniques of national chains. The national chains also enjoy the benefits of equity financing, which means they can build new stores faster and pick the best locations.
"When anybody in the real estate business wants to find a supermarket tenant for a major shopping center, they will come to someone like us last," says Bill Love, president of Norfolk-based Bonnie Be-Lo Markets Inc. and a 20-year veteran of A&P.
Most of Tidewater's independent grocers say they don't really know why they have managed to resist the onslaught of big chains better than their counterparts elsewhere.
One theory is that, because of its noncentralized location, Tidewater was considered essentially a "dark horse" market until the last decade or so. When the chains finally decided to make a stronger bid for business here, the independents already were entrenched.
In any case, independents seem to be too busy to give the matter much thought, Strolling down the aisles of an Earle's Market in Portsmouth, owner Aleck calls out greetings to various customers and stops to chat with store employes.
He says he always encourages employes "to take a few extra seconds" to greet customers, a practice he says is rapidly disappearing in other stores. Aleck himself spends most of his long work days on the sales floor of one store or another, providing "an extra pair of eyes for the manager."
"The store level -- that's where the business is at," Aleck said. "I can go out and see what is going on much faster than by waiting for reports to come to me. How we sell is as important as what we sell."
Besides the absence of the bureaucratic chain of command common among national supermarket chains, Aleck said independents enjoy greater insight into their market and the ability to act faster on a merchandising hunch.
"When you start out and grow with the people in your area, you know what their needs are," he said. "We offer our customers what they want, not what we think they should have. And we know what they want by being in our stores and keeping our ears open."
Sometimes, Aleck says he relies on intuition. A few weeks ago, he and his fellow executives decided on the spur of the moment to order 120,000 inexpensive plants from Michigan and sell them at cost. The plants were on sale in his stores within the same week, and they sold out in three weeks.
Independents don't always limit their personalized service to the time in which a customer is in their store. Harold Eisenberg, president of Norfolk-based Valu Fair Supermarkets, is proud that many of his customers are second- and third-generation shoppers, and he goes out of his way to let them know that he appreciates their business.
If he sees the obituary of a regular customer, he sends the family a sympathy card. He will send a get-well card or a fruit basket if he learns a customer is in the hospital.
"These people are more than just customers to us," Eisenberg said. "They are friends who have given me my means of livelihood for many years. Why shouldn't I think more of them than I would a casual acquaintance?"
Independent grocers, of course don't buy groceries in the massive quantities national chains do. But they pay the same kind of prices because many of them are members of wholesale, nonprofit cooperatives, where they own a piece of large distribution centers serving a large number of neighboring independents. Others are members of so-called voluntary groups, in which independents buy from wholesalers on a cost-plus basis.
Economy Stores, Inc. in Norfolk is a co-op representing 63 independent grocers with 147 stores. General manager Rex Corwin says the co-ops 300,000-square-foot warehouse stores 9,700 items and does more than $100 million a year in sales.
Corwin relies on a large computer to track the grocery sales of member stores on an historical -- and continually updated -- basis. Economy Stores also provides payroll services to member stores for a fee, offers merchandising and advertising assistance, and manufacturers most of its members' dairy products.
Most independents readily point out that they would be in dire straits without the help of a co-op or voluntary. Tidewater's local grocers have their own competitive bag of tricks, however, and in many cases they are every bit as innovative as those of the most sophisticated national chains.
Giant Open Air markets, for example, were the first to introduce 24-hour shopping to Tidewater, which they did during World War II. Moreover, most Giant Open Airs have full-service restaurants, pizza shops, floral shops, refrigerated prepared-food sections, and generic (no-brand) food and household products, which sell for 15 percent to 35 percent less than similar, national brand merchandise.
Some of the supermarkets even have laundromats, complete with coin-operated dry cleaning machines. "It's a convenience for harried shoppers," said Ron Rosso.
The company also has Tidewater's only grocery manufacturing and distribution center. The center makes three dozen kinds of prepared foods and a variety of bakery and dairy products. Spring water from Western Virginia also is bottled there.