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Shops Within Outlet : Ralphs' New Giant Dwarfs Superstores

June 09, 1986|MARTHA GROVES | Times Staff Writer

BAKERSFIELD — Grocery chains always seem to be in the market for that superlative term to set them apart as bigger and better. Hence the evolution from mom-and-pop to market to supermarket to superstore and now the rage in Europe, hypermarkets, where clerks speed through the aisles of cavernous stores on roller skates.

When Ralphs Grocery decided to open its first store here last January, it needed a name that would give a sense of something even bigger than a superstore: the Giant.

At 70,000 square feet, the store is nearly twice as large as Ralphs' superstores and is roughly equivalent to 1 football fields. It has given rise to another descriptive handle: upscale super warehouse store--upscale because of such service departments as deli, bakery and fish; warehouse because of the atmosphere and shelving, and super, of course, because of the size.

And Ralphs has something even bigger in mind for shoppers in Los Angeles and Orange counties. When it begins opening stores in 12 former Zodys locations in August, they will house as many as 18 shops and kiosks offering goods and services.

These 100,000-square-foot stores "are really too big for us to occupy by ourselves," said Byron Allumbaugh, chairman and chief executive of Compton-based Ralphs.

Across the front concourse near the checkout stands will be retailers selling cookies, frozen yogurt, ice cream, costume jewelry and cosmetics or such services as dry cleaning, photo developing and video rental. In most cases, customers will be able to enter the shops only from the main store.

Ancient Romans might have called it bread and circuses.

Economies of Scale

The Giant concept is the latest wrinkle in a market often described as the nation's most competitive. For retailers, larger stores offer economies of scale that can boost profitability. And when margins are as razor thin as they are in Southern California, where price wars are an everyday thing, bigger often translates into better value for customers.

To be sure, the huge new locations won't appeal to everyone. Many customers are willing to pay a premium in return for pampering and a less mall-like atmosphere. But grocers big and small in Southern California indicate that they'll be keeping a close eye on the Giant.

"The sizzle we're selling . . . is that nowhere else, at least in the Western U.S., does a tenant have the chance to be within 40 feet of a bank of 20 checkout stands where there's anticipated foot traffic of 25,000 to 30,000 people per week," said John Koenig of Koenig & Wood Development Co. in Long Beach.

The firm is subleasing the extra space from Ralphs in 12 former Zodys locations and in turn is negotiating leases with tenants. Two other former Zodys stores are smaller and will resemble the Bakersfield store, which does not have other tenants. (HRT Industries has closed its 32-store Zodys discount chain over the last few months.)

At the Bakersfield Giant, yellow and red banners hanging from the high ceiling trumpet Ralphs' low-price theme. Shoppers wheel oversize carts first through a large produce section, then through aisles nearly 10 feet wide. In modified warehouse fashion, many items are stacked in the original cartons, with the excess stored above the shelves. Bags of fast-moving items such as flour and sugar are stocked on the aisle floor.

Along the store's periphery are separate service counters, including a bakery where goods are made from scratch daily and a fish case, which stocks as many as 75 varieties of fish and seafood, some flown in from around the world. The store stocks 32,000 items, whereas a normal Ralphs superstore would carry 20,000 items. (Each brand and each size is an item.)

At the checkout, signs urge shoppers to bag their own groceries as a cost-saving measure.

"A store like this attracts the serious shopper with large grocery orders--family people who have to be concerned with a budget, rather than the drop-in shopper after a loaf of bread," Allumbaugh said recently during a tour of the store.

"This is a very low-margin business that operates efficiently on high turnover. Giants are designed for extremely high volume."

Mary Massa, a Bakersfield resident, shops the Giant for its variety and low prices on such items as tuna and mayonnaise but complained that checkout lines tend to get long at peak times. She added that she has no particular loyalty to any store in the area and lets convenience be her guide.

Bob Vibe, owner of Fike's Finer Foods, a gourmet specialty store one mile west of the Giant, said his business hasn't suffered any significant loss since Ralphs came to town.

"Several of our customers have gone over to the Giant, looked it over and said they're not interested in shopping there because it's so big and there's no service orientation," Vibe (pronounced VI-bee) said. "We're a very full-service store. Our customers aren't going to be interested in bagging their own groceries."

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