Over the years, Highland Park Market has remained competitive by evolving to a specialty-oriented independent grocer, expanding into catering services and prepared foods, and adapting to other trends like staying open on Sunday and extending daily store hours.
But a few years back, competitive pressures led the chain to conduct a deeper dive into its business model and evaluate new strategies to boost sales, said Tim M. Devanney, co-president of Highland Park Market.
Last year, through a transaction in the works pre-pandemic, the market sold its Suffield store, the lowest-performing outpost in the franchise, which now includes three locations in Manchester, Glastonbury and Farmington.
The chain also reinvested and remodeled its Manchester and Glastonbury stores, reducing some food categories like pet food. No one wants to haul a 150-pound bag of dog food from a store when it can be easily delivered via online sites like Chewy.com, he said.
Being an independent grocer became an advantage during the pandemic, Devanney said. While Highland Park Market experienced supply chain issues early on like most grocers, it was able to adapt by bypassing traditional grocer suppliers through ongoing relationships with numerous food service suppliers, which had excess inventory because restaurants were closed.
As a result, the chain was able to provide customers hard-to-find items, from meats and paper goods to flour.
“We knew we had to get product out,” he said.
Like its industry sector, Highland Park has seen rising revenues; business was up 20% in 2020 and growth hasn’t let up.
“We’ve never seen numbers like this before,” Devanney said.
With independent grocers experiencing sales surges since the pandemic began, Devanney said he’s hearing more confidence from owners about their businesses. Independents who were thinking it was time to get out and sell are reconsidering, he said.
Pre-pandemic, independent grocers nationwide were losing ground with their market share in decline in 44% of U.S. counties between 2005 and 2015, according to a 2017 U.S. Department of Agriculture study. Chain stores dominate sales in most regions of the U.S., according to the study.
Supply chain, labor disruption
While Highland Park Market continues to reinvest its higher proceeds into improving its operations, the pandemic has been “a disaster,” Devanney said, in terms of the labor shortage. The chain has 350 employees, including 115 full-timers, and like many businesses, is experiencing high turnover in a tight job market.
“We’re constantly interviewing because we know we’re going to need people,” he said.
Nationally, food retailers have hired hundreds of thousands of new workers to manage the surge in demand for food and other durable goods that have stretched their stores, warehouses and supply chains, said Wayne Pesce, president of the Connecticut Food Association.
“While companies are adjusting strategies to get through each virus surge, most are already working to change their labor models to avoid similar challenges in the future,” Pesce said.
Highland Park, said Devanney, has installed new online technology to handle a huge increase, particularly at the Manchester location, in e-commerce and call-in orders as curbside and home delivery services continue.
“Before the pandemic, if we had 10 call-in orders a day, that would be heavy. During the pandemic, 100 call-in orders a day became average,” he said.
While Highland Park has gained new customers, the goal is to now keep them, he said. A customer loyalty program was introduced at the end of last year, which has proven more valuable given rising inflation, and online data analytics allows the company to identify buying trends by zip code.
“We’re seeing a lot of price changes across the board and we want to show people why they should stay with us, that we can help you work on that food bill that’s rising every month,” he said.
Pesce said independent grocers will need to continue to adjust to the new norm, which includes inflation, ongoing supply chain and labor disruptions and adjusting to new consumer buying patterns and behaviors, including their preference for online shopping.
“Leveraging innovation and technology to reach customers and meeting that demand will be critical,” Pesce said.
