What a new Raley’s store says about the grocery industry (Photos)

Apr 21, 2017, 2:58pm PDT Updated Apr 21, 2017, 4:38pm PDT

If you’re unconvinced that West Sacramento-based Raley’s is positioning itself as a wellness company, the proof is in the probiotics section.

The grocer’s new store at Fair Oaks Boulevard and Howe Avenue offers the chain’s largest selection of probiotics, commonly believed to aid the digestive system. As Raley’s opens new stores and fine-tunes its existing sites, the company is testing a similar assortment of probiotics at four to five other locations, according to company spokeswoman Chelsea Minor.

The move reflects nationwide industry trends. A 2016 report from the Arlington, Virginia-based Food Marketing Institute concluded that “shoppers aspire to healthier diets, and turn to food to help them manage an evolving range of health conditions.”

For Raley’s, a focus on health and wellness isn’t limited to the new store, which opened last week and will hold grand-opening festivities this weekend. Across its stores, the company has made changes such as expanding organic offeringsand removing tobacco products from shelves.

But the new 35,000-square-foot store, which employs 110 people, also includes some unique hints about how the retailer is preparing for the future in an increasingly competitive industry. Here are four highlights.

A new level of healthy

Consumers’ growing interest in healthy foods is a common theme, and the new store has more offerings devoted to that trend. Compared to less-healthy offerings, natural and organic products are featured more prominently on store shelves. There’s an organic food bar, and a wellness area with a product selection that’s more extensive than other stores. Displaying a name tag that urges shoppers to “give peas a chance,” Kimea Hemmati is one of two wellness specialists at the new store. With a background in nutrition science, she is there to educate people about products such as herbal supplements and protein powder.

About those millennials

Getting millennials into grocery stores isn’t easy, according to research cited in The Wall Street Journal last year. Increasingly, they’re opting for online services and grocery offerings from big-box retailers such as Wal-Mart and Target. The response from Raley’s? Grilled cheese and sushi burritos. Those two unique offerings, freshly prepared in the new store, seem to directly target millennials, especially those at the nearby California State University Sacramento. Consistent with national trends, prepared foods are a major element in the store.

Also, amid the rise of millennial-friendly meal kits from companies such as Blue Apron, Raley’s is responding by more prominently displaying its own meal-preparation kits.

Another important ‘M’ word

The new store is unique because it makes its own sausage in-house. While meat is a hardly a recent offering in the grocery industry, “beefed up” meat aisles are becoming key amid heightened competition from neighborhood butcher shops. When the Sacramento Natural Foods Co-op opened its relocated store last year, its meat department grew significantly.

All about experiences

Experience-oriented shopping isn’t limited to malls. All sectors of retail are looking for offerings that can’t be ordered online. In addition to the wellness specialists, wine specialist Tom Jones is available to answer questions at the new store. Other Raley’s locations feature employees with wine knowledge, but Jones is featured more prominently and has a higher level of expertise. Also, a “beauty bar” at the store lets customers fill their own bottles with soap and shower gel.

The store also has a variety of environmentally friendly features, such as solar panels. Armstrong Development Properties Inc., Stafford King Wiese Architects and Tilton Pacific Construction Inc. worked on the project. Its cost was not disclosed.

Raley’s is the Sacramento area’s fourth-largest private company, with $3.1 billion in annual revenue, and the region’s fifth-largest private-sector employer, with about 5,600 workers. The company owns and operates 121 stores under four brands: Raley’s, Bel Air Markets, Nob Hill Foods and Food Source. It also has 13 Aisle 1 Fuel Stations.

The company plans to open four more new stores in the next 18 months.


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