Caldor enters Rochester, N.Y.; eyes other upstate markets

Discount Store News, April 5, 1993 by Laura Liebeck

HENRIETTA, N.Y. -- Caldor launched its assault on the winter/snow areas of the Northeast last month with the opening of four stores in the suburbs of Rochester, N.Y.

Moving into Rochester is part of Caldor's urban/suburban strategy, said president Marc Balmuth. Rochester embodies the chain's urban and suburban objectives with its geographic location, population count and relatively high median income of $36,000 annually.

This market, which already is served by such well-entrenched discounters as Kmart, Wal-Mart, Ames and Lechmere, can hold two more Caldors, said Balmuth. The first addition to the new market should occur this fall when Caldor opens a 113,000-sq.-ft. unit in the Rochester suburb of Victor. This store is located close to a mall that is due to be expanded in 1994.

Caldor is using the Rochester stores as a test for other upstate cities like Buffalo and Syracuse.

Early challenges for Caldor in Rochester include simply getting known by the population and competing against the established discounters, particularly Wal-Mart. Balmuth admitted that Caldor "took more action" in pricing in Rochester, slashing prices between 5% and 20% depending on the item in such sensitive areas as health & beauty care, food, candy and housewares.

Caldor also took a bold step in this high-income market. It installed the chain's first full-service optical department in the Greece, N.Y., unit. Balmuth said Caldor wanted to test the optical department in its next group of prototype stores--modeled after the Bristol, Pa., store which opened last October--and the Rochester market fit that bill.

The most obvious attribute of Caldor's Rochester stores is the discounter's fashion statement, which came under extreme pressure just three days after the March 10 soft opening when the blizzard of 1993 dumped three feet of snow on the area offering Caldor a quick lesson in merchandising in northern climates: snow happens late in the season. (Caldor was just one of many retailers snowed in with spring merchandise and no winter supplies.)

Still, the fashion departments, especially apparel, were chock-full of brightly colored washable silks, 100% cotton Ts and today's hot colors in jeans.

Overall, Caldor's prices of fashion apparel run about 20% higher than competing discounters, Balmuth said, because the merchandise is on-trend and of higher quality. In fact, Balmuth noted that the chain has worked hard to refine its apparel mix to deliver fashion merchandise in a more timely manner. He said Caldor is now able to identify a trend and get merchandise into the stores in 45 to 60 days.

Throughout the store the fashion message is silk--including men's pajamas at $39.99--100% cotton, fashion-colors in jeans hip-hop and even jodhpurs.

The mood in the store is distinctly upscale. The chain is trying to emphasize, via grand opening advertising on TV, billboards and newspaper, its customer-friendly atmosphere.

The Rochester stores, each located on the outskirts of the city in Gates, Greece, Irondequoit, and Henrietta, represent about one-fourth of the discounter's 1993 expansion schedule of 16 to 17 store openings. The other big new market for the chain is Washington, D.C, with three stores to open in fall.

Although all of Caldor's new stores, including the four Rochester units, reflect the discounter's Bristol, Pa., prototype, which opened last October, some new flourishes were offered here and some new programs will be uncovered in subsequent stores throughout the year.

The Rochester stores, 103,600 sq. ft. to 113,405 sq. ft., are all former Hills stores. Since they were existing, their configurations prevented Caldor from executing some planned programs. For example, housewares and domestics, at a 45-degree angle to the far corners of the Bristol store, were positioned in the traditional perpendicular way in Rochester. All the merchandise was included in the stores, however.

Among the changes at Rochester are: * No pharmacy departments. Balmuth said Caldor is evaluating the pharmacy program to see if the chain will go forward with it. The fate of Caldor's 17 pharmacies is "a big question," he said. * The RTA department has been doubled in both size and sku count with wicker furniture the focus of the spring offerings. New to the program this year are bedroom accessories such as headboards, and several pieces from Cosco's Youth Options series, which features a corner wardrobe for $139.99, the most expensive item in the department. * Domestics presented a licensed juvenile program at the edge of the department that occupies a full run of bedding options using Barney--which is featured in a bedding vignette within the area--Aladdin, Thomas the Tank Engine, 101 Dalmations, Beauty and the Beast and Major League Baseball. Without the angled department unveiled in the prototype, Caldor found that it had the wall space to try the juvenile program. "We though it would be fun and interesting," said Steve Fishman, senior vp, gmm, home lines. * An expanded offering of personal computers now includes one Leading Edge model and another on the way. All models, including the Packard-Bell, feature 486 micro-processors. An 8-ft. software section faces the computers, added to Caldor's offerings six months ago. In addition, Caldor added a 31-inch color TV by General Electric for $849, to "stretch ourselves and be a little more upscale, said Elliott Kerbis, senior vp, gmm, hard lines. * Nathan's restaurant, successfully tested and now rolling out to Caldors, has been moved from the front of the store adjacent to the outside doors in the original prototype to the front of the store across from sporting goods and food.