This is to certify that the thesis entitled A Case Study in the Deve10pment of a Supermarket presented by Donald B. Rubens has been accepted towards fulfillment of the requirements for __i4_.A.__degree inWsiness Curriculum in Food Distribution M— ' Major frofessor . Date A CASd STUDY I? THE DEVELOPTENL OF A SVPERTAKKET By Donald B. Rubens w A THESIS Submitted to the School of Graduate Studies of Michigan State College of Agriculture and_Applied Science in partial fulfillment of the requirements for the degree of Department of General Business Curriculum in Food Distribution 1951 .::-’~ 5 7 /5‘/ x" a)“ ACKNOWLEDGHENTS The author wishes to express his sincerest appreciation to ?r. J. H. Rubens, Vice President of Iart's Food Stores, Incorporated, for his most gracious assistance and unfailing interest in the preparation of this thesis. Grateful acknowledgment is due Dr. Kenneth Wilson, Director of the Curriculum in Food Distribution, for his kind guidance and valuable aid in completing this study. Appreciation is also expressed to Hr. Norris Levinson, President, and fir. Louis Hohman, Comptroller, of Hart's Food Stores, Incorporated, for their helpful suggestions and assistance in obtaining materials used in this investigation. *********** ********* ******* ***s* *s* * TABLE OF COKTSETS CHAPTER I INTRODUCTION..................s........................ II LOCATION..................o............................ III BUILDING PLAN AND CCNSTRUCTION......................... Store Size........................................ Flooring.......................................... Store Front....................................... Lighting.......................................... Heating and Plumbing.............................. Awarding of Contracts............................. IT]. FIE: TxICIIVIGOOOOOOOOOOOOOOOOOOOOOOIOOOOOOOOOOOOOOOOOOOOOOO COSt 0f Lafld and EnildingooooOoooooooooococoons... MethOd 0f FinanCingooooocooooooooooooooeoooocoocoo DepreCiationoooooooooooocoo...cacao-00.00.900.000. V STORE LAYOUT AND EQUIPfiENTOOOOOOOOOOO00.000000000000000 Store Size........................................ Grocery Department................................ Produce Department................................ thEmmmmunuununuuunuuuuun. Bakery............................................ Dainyooooooo00000000000000.0000coco-00000000000000 Frozen FOOdSOOOOOOOOOOOOOOOO000.000.000.000.000.00 Checkout Counters................................. Storage Area...................................... Fixture and Equipment Cost........................ VI DEP“RTHENT AKD MERCHANDISE LAYOUTooooeooooooooooooccoco VII STORE PERSONNEL AND RESPONSIBILITIES...0000000000000... StaffCOOOODIOOOOOOOOOCOOO000......OOOOOOIOOOOOOOOO PrOduce Department....o........................... Heat Departmentooocoooooococo.90000000000000.0000. Groceny Departmant....o........................... VIII OPEEIKG DAY PREPARATIONSOOOQooooooooooocococo-cocoon... StOCking.o....................................oo.o Value Of StOCkooooooocoo-000000000000.000.000.000. AdvertiSing and PUbliCitYOoooooooooooooooooooooooo PAGE 10 11 I) L; 13 14 16 l6 17 19 20 20 20 24 25 26 27 28 28 29 31 32 42 42 45 46 47 52 52 54 55 TABLE OF CONTENTS - Continued CHAPTER IX CONCLUSIONS............................................ Sales of Star No. 23.............................. Effect on Nearby Hart Stores...................... SpelelC ConclusionS..o........o...............ooo PAGE 60 60 65 66 CHAPTER I INTRODUCTION The problem to be discussed in this thesis is the development of a food supermarket. It is concerned mainly with the many plans, details, and problems that must be carefully considered and evaluated before a supermarket is ready to open its doors for business. Some of the many problems that present themselves are selection of a location, size of the store, type of construction, method of financing, fixtures and equipment to be used, interior arrangement of the store, selection of staff, training of personnel, and advertising and publicity for the store. Three sources of information.were used in the preparation of this report. Personal contacts and discussions with executives of the Hart's Food Stores, Incorporated, of Rochester, New'York, were one source. Records of Hart's Food Stores, Incorporated, provided the second source. The investigations, research, and observations made by the author ac- counted for the third source. Very little information is available today in written form on the many problems to be encountered and decisions to be made in.the develop- ment of a supermarket. There are three outstanding reasons for this. First, the supermarket, as it is known today, is a relatively new type retail outlet, having first appeared in the early 1930's. Second, there have been constant improvements and developments in supermarkets, so that any material written five or ten.years ago on.the subject, is, in considerable part, out of date in 1951. Third, many of the details en- countered in the construction of one supermarket do not present theme selves in the construction of other supermarkets. Because there is very little information available on this subject, the author believes there is a need for arch a study. This report is in the form of a case study of a particular super- market. The case study approach is used so as to fully cover the many aspects involved in the development of one supermarket. Host of the general problems presented in this case study are usually encountered in the construction of all supermarkets, but the many details vary from case to case. It is felt that a brief history and description of the Hart's Food Stores, Incorporated, of Rochester, NeW'York, will provide for a better understanding of the report itself. As is the case with many chain food store companies, Hart's Food Stores, Incorporated, began with one store in.the 1890's, called Hart's Food Store. The success of this first unit led to the constructiop of a second store soon afterwards, and then a third store. The continued success of each unit led to the development of more stores. The years after 1910 experienced a rapid growth in the number of units, continu- ing until 1935 when therepwere 142 Hart's Food Stores. In the early 1930's, the supermarket appeared on the American scene. The supermarket, among other things, was a larger store in area with much greater variety, than the earlier type unit, and featured a -2- self-service type operation, in contrast with the earlier type unit which was of the service type.1 Hart's Food Stores, Incorporated, began to realize the many advanp tages of this new development in food retailing. The result was the opening in 1938 of its first supermarket, called Star Super Harket. The success of this first unit led to the opening of more supermarkets, with the result that on.January 11, 1951, there were 23 Star Super Markets. It is interesting to note hUW'the name "Star" was selected. The letters in the name "Hart's" were rearranged, and the "H" eliminated. This resulted in the word "Star". There are several reasons why the Star Super Earkets are known by a different name from the Hart's Food Stores. The latter had been identified with neighborhood operations for nearly 50 years and had al- ways enjoyed public acceptance and popularity. With the advent of the supermarket, the executives of Hart's Food Stores, Incorporated, decided after much consultation and deliberation, that there should be a definite distinction between the two operations, so that in.the public eye there would be no confusion. Each was a distinct type of food retailing peculiar to itself. Thus the supermarkets and neighborhood stores are identified by different names. As additional Star Super Karkets were opened, many of the older and smaller type units, the Hart's Food Stores, were closed, because 1 Service type food stores offer such customer services as delivery and credit. the competition from.the supermarkets affected their sales volume, making some of them unprofitable. As a result, there were 80 stores in the Hart Store division and 25 supermarkets in the Star division in operation on January 11, 1951. These 105 units comprised the retail operations of Hart's Food Stores, Incorporated, as of that time. The author wishes to explain three terms used in the report itself. Where the words "the company" are used, it refers to the Hart's Food Stores, Incorporated. The word "Star" or "Stars" refers to the Star Super markets, and the words "Hart’s" or "Hart Stores" refers to the older and smaller type units, the Hart's Food Stores. The long range program of Star Super markets envisions approximate- ly 35 stores in Rochester, New York, strategically located in order to serve all the residential areas of the city. In addition, it is planned to build more stores in all surrounding towns with populations in excess of 5,000 persons, and within a radius of about 75 miles of Rochester. This area would extend east to Syracuse, west to Buffalo, and south to the Pennsylvania border. The area referred to is covered by the Rochester newspapers, in.which the company advertises regularly and ex- tensively, so it is felt that the buying public of these towns is well acquainted with the Star Super markets. The company feels that consumer acceptance has been developed within.this area and that future super- markets in these towns would find success and favor. As of January 11, 1951, the Hart's Food Stores, Incorporated, operated 25 Star Super Harkets, 20 located in Rochester proper, and three located in nearby towns. There were five more in the process of construction, as of this date, which will be opened during 1951. This report is concerned with Star Ho. 23, located at 435-437—439 Lyell Avenue in Rochester, New York, which was opened on January 11, 1951. This unit will be discussed from the time it was first planned until it was first opened for business. CHAPTER II LOCATION The construction of a modern supermarket involves a substantial investment. It is very evident that careful planning and study must go into the selection of a location for a supermarket. An error can be very costly. The selection of the Lyell Avenue site resulted from painstaking planning and study of its potential. The basis of its potential is discussed later in this chapter. Greater Rochester is a city of over 400,000 inhabitants, situated in'Western New York state on the shores of Lake Ontario. It is well known as a city with varied industries. Among the more important in- dustries are men's clothing, cameras and film, and optical goods. Payrolls are high because skilled workers constitute a large part of local employment. The field of food retailing is one of keen competition. There is the usual proportion of independent stores and cooperative groups scattered throughout the city. In.the chain field, the Great Atlantic and Pacific Tea Company, Loblaw Groceterias, Nohican Stores,'Wegman Stores (a local chain), and Hart's and Star are the leaders. Kany Star Super Harkets are located in shopping centers which have become very popular within the last ten years. Shopping centers are usually found in newly developed residential areas located in many cases in the outskirts of the city. Such centers i‘requentl‘r consist of from.ten to 20 stores, including food stores, drug stores, post offices, theaters, banks, barber shops, hardware stores and others. Parking facilities for from.200 to 1,000 cars are usually provided in these shopping centers. Other Stars are located in older residential areas. In such cases, parking facilities are not available to such an extent. This is par- tially compensated for, however, by the closeness of the store to the homes, and the resultant heavy "foot" traffic. Such is the case with Star No. 23. I Lyell Avenue is an important thoroughfare in Rochester. It is an old business street serving a heavy residential area of middle income families. Nearby are some important industries, including several cloth- ing factories, a division of Delco Appliances of General Rotors, Bausch and Lomb Optical Company, and Camera works Division of Eastman Kodak Company, which employ large numbers of people. There is no Star Earket located within three miles of 455-437-439 Lyell Avenue. The closest supermarket competition is about two miles distant, although there are several smaller food stores and a medium size market located within three blocks of the new Star location. The largest and most desirable piece of property available in this congested area was the parcel selected. While it did not provide for every feature desired in a supermarket development, it did permit a store 65 feet wide and 166 feet deep with a somewhat larger parking area. Of the 80 Hart's Food Stores in operation as of January 11, 1951, 11 are located within the general area which the new Star Iarket serves. -7- A twelfth Hart Store was located directly across the street from Star No. 23, but was closed because its business would have suffered con- siderably from the competition. This store was very old, and was small in both size and sales volume. The closing of this unit was another step in keeping with the present trend toward self-service stores. many large food chains determine store locations through extensive research studies of population density and traffic movement. Hart's Food Stores, Incorporated, relies principally on the knowledge and ex- perience of its executives in regard to local situations, although formal research studies are occasionally conducted. These executives include the company president, vice president, and comptroller. In regard to Star No. 25, the company‘s previous successful ex- perience in this neighborhood fortified the conclusion of the probable success of the new store. The 11 Hart Stores located within a one mile radius of Star No. 25 did a total weekly volume of approximately $19,000 prior to the opening of Star No. 23. This volume of business plus the fact that there was no other supermarket within a two mile radius of the proposed location convinced company executives that this was a logi- cal location for a successful Star Super Harket. The location of Star No. 23 also puts the company in a sound comp petitive position in.this area, not only for the present, but also in the event of additional future supermarket competition. CHAPTER III BUILDIKG PLAN AND CONSTRUCTION Store Size After the land was purchased, the company's first step was to de- cide upon the size of the store. The parcel of land purchased was nearly 150 feet wide and 175 feet deep, or a total area of about 26,250 square feet. It was decided to build a store with a frontage of 65 ~—feet and a depth of 166 feet, making the store area about 10,100 square feet. Approximately 700 square feet at the rear of the store is a load- ing area for freight deliveries. The parking lot for Star No. 23 occupies over 15,000 square feet. The company would have preferred a store frontage of 80 or 90 feet, but the size of the lot did not permit it. A larger parking lot would have been desirable, also. The company's usual policy is to provide a parking lot of three times or more the area of the store. The area of the store itself is about 10,100 square feet, while the parking lot occupies an area of over 15,000 square feet. A parking lot much larger in size would have been desirable. Because the area was limited, the above dimensions were deemed necessary. This illustrates a most impor- . tant point; it is not always possible to achieve every desired feature in a supermarket development. Some decisions are forced upon a food chain by the very nature of the problem. The company architect was informed that a store 65 feet by 166 feet was desired. The architect then proceeded to design such a store and render blueprints, working in close harmony with the company execu- tives. It was found desirable to construct the store of cement blocks faced with yellow brick. Uany other Star Super Earkets are built simi- larly, and the company's successful experience with this type of con- struction justified its use in connection with Star No. 23. A cement block structure is very sturdy and will last for many years. The yellow brick construction creates an attractive store front. An 11 foot ceiling was decided upon. There are six inches of rock wool insulation above the ceiling. The ceiling height is important as a means of providing effective lighting and ventilation. Flooring The next decision to be made concerned the type of floor. The three general types of floors used today in supermarkets are maple, concrete covered with mastic tile, and terrazzo. The wood floor was found to be undesirable because Star No. 23 is a one story building. WOOd floors are very apt to warp when.there is no basement in a store, and are susceptible to dry rot. A concrete floor covered with mastic tile overcomes the main dis- advantage of a wood floor, but it cannot compare favorably with the newest type of supermarket floor, terrazzo. A terrazzo floor consists of two layers of concrete. The bottom. layer is laid roughly, and over this is put a smooth layer of concrete. The second layer is mixed with marble dust, which provides a highly polished floor. There are several advantages in having a terrazzo floor. It is the easiest to keep clean, the most durable, and the best appear- i-3. Its only disadvantage, aside from the fact that it is the most ex- pensive of the three types, is that it is a "hard floor to Walk on" for any great length of time. It tends to tire the feet. It was decided to build a terrazzo floor in Star 30. 25. To over- come its disadvantage of being "hard to walk on", a wood floor was sub- stituted in the area of the meat processing room where the people are on their feet most of the day. The floors under the checkout counters 'were covered with a heavy rubber matting for the same reason. The effect of terrazzo on customers' feet is negligible, because of the relatively short time they spend in the store. Store Front The store front is entirely glass from the ceiling level to within 15 inches of the floor level. Above the level of the glass on the store front is a six foot high panel of transparent plastic. Superimposed on this panel are dark green transparent letters that spell out "STAR SUPER KARKET". The panel and letters are illuminated from behind by fluores- cent tubing, which makes for a brilliantly lighted, streamlined store front. A 15 foot pylon of pressed brick extends upward from the roof. From this tower hangs an eight foot green star constructed of stainless steel outlined with green neon tubing. The green star is on an arm protruding from the tower and hanging over the store, perpendicular to -11.. the front of the building. All Star Super Karkets have this "insignia" which is visible for a considerable distance, and identifies all Star markets. The over-all effect is a modern, colorful, well lit store front. The position of the pylon and green star is illustrated in Figure 3, page 57. Lighting Interior store lighting is accomplished with six rows of continuous eight feet slim-line fluorescent fixtures, running from.the front to the back of the store. The slimsline lights are a relatively new de- velopment in fluorescent lighting. They maintain an even hue or color, whereas regular fluorescent lights have a tendency to discolor and give the store an uneven lighting. Additional fluorescent lights are installed completely around the top level of wall shelving. These are called "cove" lights, and give the store a decorative effect in addition to reflecting light on the shelf merchandise. In front of these "cove" lights are signs such as "paper products" and "drug sundries" that inform.the customer where different items are found. The "cove" lights, store front lights, and Star "insignia" lights are controlled by time clocks which permit these lights to remain on until 11:00 p.m. The effect is to make the store attractive to people passing by at night. -12- Heating and Plumbing The heating of Star No. 23 is accomplished through the use of three gas-fired unit heaters, two located in the actual store sales area, and one located in the storage area. The heaters are suspended from'the ceiling in such a manner as not to interfere with open refrig- erated cases and the produce department. One unit is located in such a way as to keep the cashiers comfortable. Hecessary plumbing facilities include toilet facilities, washrooms for the produce and meat departments, and drains from the refrigerated cases. The company has experimented with air conditioning in three of its supermarkets. The effect of air conditioning on increased sales volume is negligible in the Rochester area, and this is one of the reasons why Star No. 23 is not wholly air conditioned. Weather Bureau statistics for Rochester indicate that the city gets only about ten extremely hot days a year, not enough to justify the expense of air conditioning. To equip Star No. 23 with air conditioning would cost about $25,000 today. For the reasons given, Star Ho. 23 is equipped with air conditioning in only one area of the store, the meat cutting and packaging room, where proper temperatures must be maintained. The interior walls and ceiling of the store are smooth plaster. The walls are furred to prevent dampness. Above the shelf line, the walls are painted a pastel lemon shade. The store is equipped with stainless steel doors with heavy plate glass panels. The panels are interchangeable; in.summer, the glass plates are taken out and screens put in. These make practical and attractive store entrances. A spacious vestibule is located at the east end of the store front. It has two entrances, one from.the street and sidewalk, and one from the parking lot. Star To. 23 does not have a customer rear entrance or exit, yet it is convenient for customers who park in.the store‘s parking lot to enter the store through the spacious vestibule. Elimi- nation of a rear door has advantages. It reduces pilferage and theft of merchandise by routing all customer traffic through one set of doors, and it offers better control of the store operation itself. The more than 15,000 square feet of parking area is covered with black-top asphalt. It allows room for about 50 parked cars. As was mentioned earlier, a larger parking lot would have been desirable. Because there is a heavy residential area in.the immediate vicinity of the neW'store, the "foot" traffic is very heavy. This partially elimi- nates the need for a larger parking area. Awarding of Contracts At the completion of these plans by the architect, contractors were invited to submit bids. The policy followed by the company involves awarding three separate contracts, one for electrical, one for heating and plumbing, and one for general contracting which includes masonry, carpentry, painting, and other requirements. These three contracts provide for complete store construction. The company follows a definite procedure in awarding contracts. The executives concerned and the architect carefully select five responsible and reputable general contractors, three electrical con- tractors, and three heating and plumbing contractors. These contract- ors are invited to submit bids for the jobs. Plans and specifications for the jobs are submitted to these contractors with instructions that sealed bids will be accepted up to a certain date. All contractors for each of the three jobs bid on exactly the same plans and specifications. On the designated date, bids are opened and examined. The pompany policy is to award contracts to the lowest bidders for each of the three jobs. All bids are acknowledged and the contractors thanked. In addition, each contractor is informed of the company that was awarded the job, and the price. By handling the transactions in this open manner, no questions can arise as to the fairness of the pro- cedure. At this point construction begins under the supervision of the architect. It may be interesting to note that construction of Star Ho. 23 began in April, 1950. The contractors informed the company that the building would be completed by November 1, 1950, so that the store could actually be opened for business late in November or early in December. During the summer of 1950, however, the building trades in Rochester went on strike, with the result that the store could not be opened until January 11, 1951. -15.. CHAPTER IV FIE‘EATICIIIG Cost of Land and Building The bids accepted for Star Ho. 23 were as followm: $60,269.00 General contract 4,860.00 Electrical contract __5:398°00 Heating and plumbing contract $70,527.00 Total In addition to these three contracts, a charge of $400.00 was made for surveying. Architect fees amounted to $4,255.62, or six percent of the total of the three contracts plus the survey cost. Including the cost of the land, the total cost of land and building for Star No. 23 was as follows: $60,269.00 General contract 4,860.00 Electrical contract 5,398.00 Heating and plumbing contract 400.00 Survey costs 4,255.62 Architect fees 23,425.09 Land cost $06,607.62 Total cost, land and building It is the general practice of contractors to render bills the irst of each month for 90 percent of the work completed during the previous month. The architect then approves these invoices for payment, which is promptly made by the company. Thirty days after each contractor has fully completed his job, and the work has been approved by the architect, the final ten percent is paid. The ten percent is withheld every month until completion of the job, to guarantee performance according to plans and specifications. method of Financing The company prefers to lease rather than own the property that it occupies. This is not always possible, however, and there are instances where store ownership is the only method of locating in a desired area, as is the case with Star No. 23. Store ownership presents several serious problems to food chains. First, a large initial capital investment is required. Second, store ownership involves additional accounting and legal proceedings. Third, store ownership means a long—term investment, whereas store leasing permits short-term occupancy if conditions should make this necessary. Host chains handle real estate transactions in one of two ways, either through a separate department within the organization or through a sub- sidiary corporation. Hart's Food Store, Incorporated, conducts its real estate trans- actions through a subsidiary corporation, known as the Realhart Realty Corporation, that was organized to buy, lease, and sell real estate. Its operations are entirely confined to the parent company. Realhart Realty Corporation was formed for two principal reasons; first, to keep alive the company tradition of never having borrowed money in its own name, and second, to completely divorce the retailing and real estate operations from each other in the conduct of the business. The company has a histony of financing all its operations without borrowing money. Prior to 1938, when the first Star Super fiarket was opened for business, the problems of store ownership and large capital investments were rarely encountered because practically all of the more _17.. than 130 hart Stores were leased. Hhen the company first entered the supermarket field, it became apparent that store ownership would be necessary in some cases if the company were going to compete favorably for the consumers' trade in certain areas. In order to permit store ownership and still preserve this tradition, it was decided to organize a subsidiary corporation. t was also felt desirable to separate the retailin and real estate operations within the organization, based on the principle that the primary purpose of a food chain is to retail food, not to deal in real estate. With this in mind, the board of directors of the company established the subsidiary corporation. A fairly uniform procedure is followed by Realhart in financing the Star Harkets requiring store ownership. In the case of Star No. 23, as with other units, the company made all capital outlays until the building was about one-half completed. Here, Realhart stepped into the picture and reimbursed the company for all the outlays it had made to date. Realhart then secured a bank loan for 100 percent of the total cost of land and building, or $96,607.62, at a four percent interest charge per annum.for 15 years. In negotiating this loan, Realhart used as collateral a 15 year lease on Star P0. 23 previously effected with the parent company, plus a mortgage on the building. The bank negotiating this particular loan required that it be re- paid in 180 equal monthly payments including principal and interest. _18- Total interest charges for 15 years at four percent per annum are found to be approximately $32,150.00.1 The monthly payment required by the bank is determined as follcwm: Total principal 3 96,607.62 Total interest charges 32,150.00 Total principal and interest $128,757.62 Itionthly payment : $128,757.62 + 180 = $715.32 Thus the bank charges Realhart $715.32 per month for 180 months. In order to repay this loan, Realhart charges the company the same rent, which includes principal and interest, payable in 180 equal monthly installments of $715.32 each. At the end of 15 years, when the loan is repaid in full, Realhart owns the property free and clear. Uany banks in Rochester require that larger interest payments be made during the beginning years of a loan, and that smaller interest payments be made during the later years. To use a hypothetical example, instead of charging $10.00 interest payments every month over the life of a loan, a bank may request that the first interest payment be $20.00, and that the payments decrease in size steadily, so that the final interest payment will be zero. Some bank loans made for the construction of Star Super markets are repaid by one method, and other loans are repaid by the other method. Depreciation The land and building for Star No. 23 are depreciated at the rate of two and one-half percent a year for 40 years. Based on the total cost of land and building, or $96,607.62, the depreciation expense amounts to $2,415.19 per year. This figure is determined from an interest rate handbook. CHAPTER V STO’E LAYOTT ATSD EQTTIPTEIRTT Store layout was decided upon at the time the building was planned. Architects and company executives met to develop the location of depart- ments, equipment required, and space allocation. Store arrangement was the result of these important consultations. Orders were then placed for fixtures and equipment, and tentative shipping dates were given. As soon as construction progressed to a point where it was possible to accept delivery and begin installations, cases and equipment began to arrive. Carpenters, plumbers, and elec- tricians started the job of placing, erecting, and connecting refriger- ated cases, gondolas, coolers, and shelving. Store Size The area of Star No. 23 is approximately 10,100 square feet. This is divided into 7,550 square feet of actual selling area and 2,550 square feet of workroom.and storage area. The latter is further sub- divided into 1,500 square feet for grocery storage, 650 square feet for meat workroom, and 400 square feet for produce workroom and storage, lavatories, and rubbish room. (See Figure 1, page 21) Grocery Department Grocery department shelving consists of eight gondolas each 33 feet long, and 74 feet of wall shelving. .,‘ ,- -‘) 37,. ‘l" I , , A?‘ q M. 7 , . . Q . V . rrn I Ll . \ 5 |’\_' ‘ (7' (~ {a k" L‘ )1 'V -.o.J.-Iv§ I ' BOTTLEREIURN 40mm! CA5 L SIFROZJFOODICASES] PRODUCE “‘3‘, ”.5” I 7 ‘2‘ 2 VEGSI' E‘— VEG: ”K GONDOLAS i o 1 COOLER V 2 _‘ Lu’ . 3 < D C > MEAT V /CE CREA’LW a o 7 an o z ‘t 4 31 a ° “5 C v C > a \ *‘2 E 8 X MEAT Lu x E; CUTTING > m [E / e, Room 35 ( D C D I 7 U V) ’5 . \ '0 2 [I E; ,L_\ ‘ $3 _ L“ C D C j E n a, fin —_ —— [ HARDWARE 4 :3 LL 5H LV/NG 56 7: BAKERY 301-7? ‘ / WA 5 F ’ OFF: 1 F I it ‘I‘l‘ .NIUIII‘ The eight gondolas were built in the company's own workshop at a cost of $400.00 each. Steel brackets at 36 inch intervals form the skeleton. ‘Welded to the skeleton are arms that support the shelves. When assembled, the saelves are sturdy and carry all the weight of heavily stocked canned goods. The gondolas were built in three sections and received two coats of white paint in the workshop. After arriving in the store, the sections were connected, received a final coat of white paint, and were equipped with white metal price ticket moulding. One of the gondolas is used for stocking large packages and has only two shelves, one six inches from the base, and the other 42 inches higher. It is used for large packages of soap powders and cereals. One side of the gondola is used for soap powders and the other side, for cereals. The larger packages are stocked on the bottom.shelf and the smaller packages on the top shelf. The seven other gondolas are alike in shelf arrangement with the shelves spaced to receive different size packages. The bottom.shelf is the deepest, projecting out farthest, while the top shelf is the most shallow; The bottom shelf takes the largest size packages, the two middle shelves take medium size packages, and the top shelf takes the smallest size containers. All gondolas have rounded ends which add to the design effect, and permit the use of mass displays. As many as 50 cases of a canned goods feature can be displayed. The eight gondolas permit 16 weekly displays of seasonal items or featured products. -22... Aisles are spaced so as to permit easy customer shopping. The aisle in front of the dairy and frozen food cases is approximately 12 feet wide for most of the length of the store, while the aisle in front of the bakery and wall shelves is eight feet wide. Aisles between the gondolas are six feet wide, permitting easy and convenient shopping. The aisle in front of the meat cases is nine feet wide, and the aisle between the checkout counters and the gondolas is about ten feet wide. A six foot aisle runs east to west in the center of the store between the gondolas. "Wide aisles are necessary so that customers can pass one another, and so that employees can stock the shelves without interfer- ing with customer movement. Fluorescent lights run the length of the store between the gon- dolas, thus providing effective lighting. The white ceiling and shelv- ing, together with the light colored terrazzo floor, permit maximum reflection of light on the merchandise. Additional grocery items are stocked on a 56 foot section of wall shelving. This section has four shelves, the top shelf being 66 inches high. The bottom shelf is the deepest and slants slightly so that packages stand out and are easily reached. wall shelving was built in the store. Another section of wall shelving is located on the opposite wall and is 18 feet long. This is the cigarette and tobacco department and also includes the coffee grinding machines. Two Hobart coffee mills are situated in this department. The cost of building the 74 feet of wall shelving was $740.00. -23- Produce Department The produce rack occupies 54 feet and is the first department encountered by customers entering the store. The principal reason for its location near the front of the store is because of its beauty and attractiveness. The produce rack extends out 48 inches and slopes from.the wall. fiirrors are located at an angle and reflect the merchandise, thereby adding to the selling appeal. "Cove" lights are located at the top of the mirrors and further add to the beauty of the produce department. The produce rack is made up of removable sections which permit the rack to be cleaned easily and regularly. Stainless steel forms the outside finish of the rack. Part of the rack is arranged for icing leaf vegetables. The in- terior of the rack is covered with galvanized metal and a drain is installed so that melted ice can run off. The other part of the rack is for produce not requiring refriger- ation. Removable racks spaced for air circulation protect this merchan- dise. While some Star Harkets are equipped with refrigerated racks for perishable vegetables, the company is not entirely satisfied with their performance. When heavily loaded with produce, the refrigeration does not work satisfactorily. It is believed that the produce rack in Star No. 25 will do a better job, because it has greater display surface. In hot weather, chopped ice will keep vegetables fresh and crisp, and the produce cooler in the storage area will protect surplus merchan- dise. Two Toledo computing scales are set on platforms on the produce rack. Below are compartment shelves for wrapping paper and paper bags. Two large bins were built for island displays of produce. These are covered with white tile board. In addition, several small tables were supplied for special displays. In.the storage area of Star No. 23 is a six by eight foot produce cooler, used for surplus fruits and vegetables. This is a used piece of equipment, and hence, it was not necessary to build or purchase a new one. A two-compartment wash basin in the storage area is handy , for washing produce, and all trimming is done in this workroom. Meat Department The meat department is located across the back of the store. There are two principal reasons for its location at the rear of the selling area. First, customers are drawn through the aisles and are subjected to the many products on the shelves and on display. Second, for more efficient and effective operation, the meat cases should be located near the meat processing room. Five self—serve meat cases, a total of 55 feet, comprise the meat selling area. The meat cases are refrigerated by three compressors, arranged so that in the event of a breakdown in one unit, the other two can give protection until repairs are made. Neat cutting and packaging is done in the meat processing room, air conditioned with a three horsepower York unit. -25- Two meat blocks, a 12 foot cutting table, an electrical meat saw, a slicing machine, a steak cuber, saws, cleavers, knives, sealing irons, and many other tools are required. Convenient holders are provided for storing the many cutting tools. Two Toledo computing scales are recessed in a table where women clerks weigh, package, and label meat cuts. 'Within easy reach is a long label rack, stocked with printed labels of every cut. Printed labels are supplied from the main office where a stock is always on hand. This eliminates the need for a printing machine in each market. Another Toledo computing scale is located on a table in the sell- ing area, available for customers who may want to check on weights. A 12 by 20 foot meat cooler, of the walk-in variety, was built in sections in the company‘s workshop. Properly insulated and complete with shelves, it was built at a cost of $1,200.00, a saving of about $600.00 if it were purchased from one of the many nationally known manufacturers and shipped from a distant point. Bakery The bakery department is a major feature of Star No. 23, as is the case with all Star markets. A 30 foot wall section and several special tables used in the store aisles comprise the bakery section in Star No. 23. Bakery wall shelving is deeper than grocery wall shelving,- and the shelves, except the lowest one used for bread, are slanted. Two rows of fluorescent lights reflect light on the merchandise. Color- ful wallpaper, on a panel behind the top shelf, adds to the appearance -2 6- of the section. NarrOW'aluminum moulding provides a space for price cards. The bakery wall shelving was built in the company's workshop. The whole assembly is supported by iron brackets on which are welded shelf brackets. Plywood is used for shelving. The wall shelving was built in sections and received two coats of white paint before leaving Ithe shop. The sections were assembled in the store and a final coat of white paint applied. Dairy The dairy department is composed of four open style, two shelf, self serve cases, set up in a continuous line with no dividing parti- tions. The cases are refrigerated by two water cooled condensing units of one horsepower each, located in the storage area of the store. By using two condensing units of one horsepower each instead of one comp pressor of two horsepower, protection is offered against a breakdown in one of the units. The dairy department also includes tW' aisle display tables for use in featuring certain dairy products. The gondola opposite the dairy cases is used for such related items as packaged processed cheese and cheese spreads that are not so highly perishable. Dairy cases are equipped with fluorescent lighting and price moulding. Frozen‘Foods Five open type frozen food cases forming a continuous line comp prise the frozen food department. Five compressors of three-fourths horsepower, one for each case, furnish the refrigeration. Here, also, protection is offered in the event of a brea:down.of one unit. All the compressors in Star No. 23 are water cooled. Company x- perience has demonstrated that water cooled compressors are more dependable than air cooled units, and stand up better under constant use. One frozen food case is used for poultry products, another for fish, and three for fruits and vegetables. Because frozen food de- liveries are made three times a week, no additional storage case is necessary. Checkout Counters Five cashier stands were built in the company's workshop at a cost of $75.00 each. The checkout counterS'were changed from.the original design shown on the store blueprint. The checkout counters used in Star No. 23 are a type originally developed and used on the west coast that permit the shopping glider to go into the checkout booth where the cashier can pick up each item and place it on the checkout counter with one hand, and register the price on the cash register with the other hand. At the conclusion of the sale, the glider goes through the booth and under the rail, back from.where it started. .L by There are several advantages in this checkout system. Firs it overcomes the customers' objection to unloading _irchases for the cashier. Second, the cashier must handle each item, thus reducing errors. Third, it eliminates the congestion resulting from empty gliders at every checkout counter. On we kends and during busy week- day hours, a packer speeds up the operation. Star No. 23 is equipped with five Rational cash registers, de- partmentized for separating grocery, produce, and meat sales. One hundred nickel plated nesting shopping gliders, with large baskets and lower shelves for large packages, and 15 "Baby Nestor" carts, for the convenience of customers who bring infants along, were purchased. These are kept in the front of the store, parallel to the show'window, to be picked up as customers enter the store. Storage Area “reight is received at the rear of the store. A section of con- veyor belt enables merchandise to enter the stockroom.quickly from the delivery trucks. Goods are stocked on skids arranged in rows. Two freight handling carts, capable of carrying ten or more cases of merchandise, are supplied. Shelves for broken or part case lots are built along one wall of the storage area. Counters for weighing and O packaging bulk merchandise were built and installed in this area. Eost case goods are opened and priced in the storage area, avoiding clutter- ing the store aisles when stocking shelves. A nine by 12 foot closed off room, rat and vermin proof, with a loading door opening to the outside, takes care of rubbish disposal. Frequent city rubbish collections eliminates the need for an incinera- tor. Toilet facilities for men and women are located off the stockroom. Ladies also have a restroom.as required by law'in New York state. All compressors are located in one section of the storage area, protected by a wood frame covered with wire mesh. Grease cups are kept filled, and these expensive machines are oiled every two weeks. -30... Fixture and Equipment Cost Total cost for equipping Star N0. 25 was as follows: Quantity Item Cost Extention 5 Cashier checkout counters 5 75.00 $ 575.00 8 Grocery gondolas 400.00 5,200.00 Bakery shelving, 50 feet 500.00 Grocery wall shelving, 74 feet 740.00 Produce mirrored rack, 54 feet 1,000.00 Storage room equipment, including tables, benches, trucks, tools 500.00 Store display equipment, including tables, racks, stands 500.00 2 Hobart coffee mills 165.75 551.50 5 Toledo computing scales 196.00 980.00 5 National cash registers 995.00 4,975.00 100 Nickel plated gliders 14.00 1,400.00 200 Wire baskets, for gliders 1.15 250.00 15 Baby Nestor gliders 19.80 297.00 Ieon "Star" exterior, 8 feet 750.00 Turnstile 75.00 ihnager's office 50.00 Biro meat saW' 490.00 Heat grinder (chopper), Biro 352.75 Steak machine (tenderizer) 170.00 feat slicer, Globe 867.00 Heat processing room.equipmcnt; blocks, tables, platters, tools 700.00 5 C. V. Hill frozen food cases 715.00 5,575.00 5 York condensing units for frozen food cases, 5/4 horsepower 515.50 1,566.50 4 C. V. Hill dairy cases 556.00 2,144.00 2 York condensing units for dairy cases, 1 horsepower 409.50 819.00 5 C. V. Hill self-serve meat cases 710.00 5,550.00 ' 2 York condensing units for meat cases, ~35- horsepower 482.50 965.00 York condensing unit for meat cases, 1 horsepower 409.50 Heat walk-in cooler, 12 feet by 20 feet 1,200.00 York condensing unit, 2 horsepower, for meat cooler 562.00 Produce walk-in cooler, 6 feet by 8 feet (used) 250.00 York condensing unit, 1 horsepower, for produce cooler (used) 200.00 Air conditioning unit, meat processing room, 5 horsepower 1,500.00 Ice cream.freezing cabinet _~ 575.00 Total cost for equipping Star Yo. 25 $55,199.25 -31.. CHAPTER'VI DJSPARTZEHT AZTD IWRCELAJTDI SE3 LAYOUT Star Ho. 25 is composed of six general departments: 1) Produce 2) Frozen foods 5) Dairy 4) Meat 5) Grocery 6) Bakery The grocery department can be divided into several categories, including canned goods, household supplies, drug sundries, hardware supplies, and others. A hypothetical customer tour of Star No. 25 will show the arrange- ment of departments and merchandise. The accompanying illustration of the store layout will aid in following this hypothetical customer tour. (See Figure 1, page 21) Customers enter the store through the large, glass enclosed vesti- bule. fleshed rubber matting helps keep winter snOW'and ice out of the store proper. The vestibule acts as a windbrake to keep the cold out of the store, especially in front where the cashiers work. Cus- tomers then enter the store proper, passing through the turnstile. Room for over a hundred nested gliders is provided near the entrance. A white metal railing directs traffic in the front of the store. Customers entering the store are on one side of the railing, while those leaving the store are on the other side. The railing is high enough to enable gliders coming through the checkout counters to pass under and be ready to start another trip. Customers pick up a shiny glider and move ahead to the produce department. In the center are two large display stands. Each holds 50 to 55 cases of citrus fruit. Along the wall, on the produce rack itself, are displayed fruits and vegetables of all kinds. Below the rack are found root vegetables, many of them packaged and ready to be picked up. Stacked high are 15 pound bags of two brands of home grown muck potatoes, United States Number one grade, identified with Star Super Harkets. Customers find all seasonal and year-round fruits and vegetables in the produce department. Leaving the produce department, and moving further along in the same aisle, are five frozen food cases carrying the full line of "Top Frost" frozen foods plus other fish and poultry items. "Top Frost" is the brand sold by the company. Star Uarkets receive frozen food deliveries three times a week from the company's warehouse. Occasionally some frozen food item such as strawberries, peas, or orange juice, may be featured on a special table in the aisle. This would be only on a Friday or Saturday. A 50 pound piece of dry ice may be set in a large tray and the frozen food item.piled around it. This is only an occasional feature, since it is not advisable to take frozen food out of minus zero temperatures. Next along the same wall is the dairy department, composed of four, two shelf, refrigerated cases. These are referred to as endless -33- cases, because they require no center partitions. Each case is 84 inches long, so there is the appearance of one 28 foot streamlined case. The bottom shelf is devoted to such products as fresh milk and cream which are delivered daily from.the company's own dairy. Pasteur- ized and homogenized fresh milk are available in bottles or paper car- tons. Privately branded dairy merchandise receives preferential space in the cases. Margarines and cartoned eggs are also stocked on the bottom.shelf. tar markets enjoy a good consumer acceptance for their quality eggs. Only locally gathered eggs from reputable hennery farms within a radius of about 30 miles of Rochester are sold. These are candled, packed, and code-dated for freshness. The top shelf is given.over to butter and cheese. Three grades of butter are.carried. "Jersey Belle" brand, a 90 score butter, and "Highland Farms" brand, a 92 score extra quality, are sold in pound prints. "Land 0' Lakes" brand butter is available in quarter pound cubes. more than 75 different kinds of cheeses are carried in wedges, slices, packages, and jars. Usually a display table in the center of the aisle is piled high with some feature cheese. One week it might be a huge "wheel" of Swiss cheese cut in two and surrounded by small packages of Swiss cheese cut in different size packages. Another weekend the special might be cheddar, a "Kraft" assortment of processed cheese, or a "Borden" variety of spread cheese. All prepackaged cheese is wrapped in cellophane and labeled. The name of the cheese, price per pound, weight, and total price appear on the label. Continuing along the same wall is a section of shelving and an 18 foot counter. Two coffee mills are located on the counter, serviced by an employee. Customers select the grind, percolator, dripolater, or other, and the clerk quickly grinds it. Concentrating the grinding in this one spot avoids the delays inherent when this service is offer- ed at the checkout counters. Rehind the counter on the wall shelving, are stocked cigarettes and tobacco. Only cigarettes by the pack are available here. Full cartons are displayed and sold at the checkout counters. This is another time saver for the cashiers. This counter also serves as a bottle refund station. All bottles returned are paid for in cash. So many bottle returns are handled in a supermarket, that there is need for an effective method of coping . with the problem if the store is to function smoothly. Some stores accept bottles at the checkout counters where the refund charge is de- termined and credited to the customer's purchase. This is time consum- ing and tends to slow the checkout system, in addition to cluttering the checkout stands with empty bottles. 3y concentrating these various services in one section of the store, a more orderly operation results, customer service is expedited, and the cashiers’ work is made easier. By handling bottle returns at the rear of the store near the storage room, empty bottles are never permitted to accumulate in.the store selling area. Empty bottles are -35- regularly removed to the rear workroom, sorted, and made ready for return to local distributors. Continuing across the back of the store is the self-serve meat department, comprising 55 feet of endless refrigerated cases in a continuous line. Every package is wrapped in cellophane. Under the cellophane where it cannot be removed or tampered with is a label carrying such information as the name of the cut, price per pound, weight, and total price. Beef, pork, lamb, and veal cuts, and smoked meats and sausages are on display in groups. On top of the cases are such canned meat products as whole and half chickens, whole and half hams, and other canned and processed meats. Several tile top tables are in the aisles where on weekends or special occasions hams, picnics, and similar items are displayed. On weekends an attendant is on the floor constantly, seeing to it, that cases are filled from reserve package stock carried both in re- frigerated compartments below the display case shelves and in the meat cooler at the rear of the store. The attendant answers questions and orders special cuts when requested. Heat cutters in the workroom promptly fill such orders. On busy days there is constant need to re- arrange and restock display cases. Reserve stock of meats in comp partments below the display case shelves is mostly limited to smoked meats, sausages, bacon and cold cuts. Cuts of fresh meat already packaged are stored in the walk-in cooler in.trays where better temp perature controls are maintained. Continuing along the other side wall is a section of shelving devoted to drug sundries, baby foods, jams and jellies, and paper products. In the drug sundry section are stocked the faster turnover drug items. _Four complete lines of baby foods are stocked, including "Gerber", "Clapp", "Heinz", and "Beech Hut". In addition, a complete line of "Swift" baby food meat products is carried. The entire length of the deep bottom.shelf is devoted to paper products. A 12 foot narrow display island in.this aisle is a hardware counter stocked with all types of household utensils, tools, and other related items. Dozens of household needs and gadgets, such as paring knives, spoons, spatulas, forks, pie dishes, baking dishes, glass and plastic items, fuses, and dry cell batteries are stocked here. New'items are added regularly. This is a variety store in itself and it is surpris- ing how wide an assortment of kitchen and household needs are stocked here. This section is four shelves high and most items are displayed in.trays. A thousand dollars of "extra" sales are made from.this small department each month. The gross margin on these items is considerably higher than the over-all store average. It amounts to about 30 percent as compared to the over-all store average of about 17 percent. The next section along this wall is the bakery department, located 'well up towards the front of the store. Customers usually conclude their purchases in this department. It is intentionally located here so that baked goods are on top of the customers' filled glider baskets and are thus not damaged. The bakery section is 30 feet long and has a deep, flat bottom shelf that is used for the many varieties of bread stocked. Other shelves are slanted toward_the customer and display sweet goods and rolls. Two rows of fluorescent lights so designed as to reflect light on the merchandise on every shelf are used to add to the attractiveness of this section. Two or three tables in the aisle are devoted to daily Special featured items. All bakery products are displayed either in cellophane packages or in cartons, with the exception of some breads which are wrapped in waxed paper. All bakery products are coded to insure freshness. The most important factor in building a profitable business in baked goods is to sell fresh merchandise, because no matter how fine the ingredients are, unless the product reaches the consumer fresh and tender, there is little or no satisfaction from.the product. The company operates its own bakery so that the large majority of baked goods carried in Star Earkets are privately branded. Several brands of bread distributed by local bakeries are also carried. The eight gondolas form the major part of the grocery department. On the accompanying illustration of the grocery department is shown the arrangement of merchandise. Gondola sections are numbered from one to 16. (See Figure 2, page 39) The arrangement of merchandise is of great importance in a food market. Yerchandise must be arranged in such a manner as to provide for easy customer shopping. Section number one is stocked with canned meats and-canned fish. Section number two features condiments, salad dressings, package cheese, and related items. The cheese section is located opposite the dairy cases. -38- N oars: _ skesega 3th .. 25g - 38k 3%: six» _ tom xmmxgx. E. 3. ezsuwzu .351. F u ”C(3QQQI m 3556 u .2 «made J». an Hiram» J .LNOUJ 3801f fl amok... n nests... ekiumg. 2( ER! on «<3. .3. «<2. H Mam - 35.583 . 36 - SasJo =gm2fi§ -23: 32:. 39: J x 2 Sea 353 .6 L2 3 526k but u .333. U m .939: was Fuzz 5 / m an I .fi 932: 283.3 J F1Q§E§§3§ 2.. 5% K. o/ 33an .. sumac <5 M \zmtouzztu: BB2 cmzsz. mm .3on t2. : mummJ A .nzmzaze .. r563 Kw. , +/ menace .. <88 .. 3.: U 230 93¢ n J , n a F J . _ Tube geek—deem? J Fe 7337 _§E«mEofl 535w] .LVJNTJAUJII- nsrls Profiled mm prmmommfi 02¢. HEEL w.N w HH mamzcmw >dtmasnb onm #2500 ooseonm poem haeoono omsnobw noaopmso Hepoa pcospneaoo 11 open *wwdo URHZHQO ammmk mow mm .02 mfipm fio mnq.m Om.ema.oa ofilm none: mo.w ewa.¢ mm.moo.sa mo.ssm.fi 0m.mam.w um.mfim.oa m gone: now befita Ho.¢ mmo.w Om.¢o¢.ma H¢.mm>.fl ma.mmm.m om.mow.oa emnma mnwnnnom mo.¢ NHH.¢ em.msm.mfl mm.mwm.H mm.mHH.¢ eH.HOm.0H sHINH hLeSLpom eH.¢ sHm.m m¢.¢0m.ma ma.mom.a NH.on.m Om.wmo.oH ofilm zuasanom HH.¢ mam.m Hn.mao.ma 00.0Hm.fi mm.wmm.w mm.mmm.oH n hLGSppom umm awesome oo.¢ mmo.¢ em.oem.wa em.mmm.a mo.mwo.¢ mm.ssm.oa mmlmm awesome Ho.ee mom.e me.emm.eflw aH.osH.Na ew.mmo.ea HH.HHm.o~a emumfl audncww ost 9:500 cospoam‘ weed, afieooau owmpobw poEopmSO Hmpoe pcefipaeooo Mom? *mm .02 m