ARA to redefine, expand Supreme Court; follows in footsteps of key foodservice players in quest to conquer growing retail market

Nation's Restaurant News, March 8, 1993 by Robin Lee Allen

Follows in footsteps of key foodservice players in quest to conquer growing retail market

PHILADELPHIA -- ARA Services intends to stake its place in the burgeoning retail market with Supreme Court, the supermarket food-court operator ARA recently purchased from its co-founder Victor M. Cascio.

Using its management services and financial muscle, the $5 billion conglomerate will redesign and develop the Supreme Court concept into a viable operation that sets grocery store cash registers nationwide ringing, said Anthony J. Wilson, senior vice president of ARA Services in charge of the Marketing Services Group.

"We see that there's approximately 1,500 supermarkets in the United States that could support a Supreme Court concept, and we ant to have the opportunity to sell into that market as it develops," Wilson said. "Supreme Court provides a way to do that."

Under the terms of the agreement, Supreme Court will retain its name and continue to operate out of Overland Park, Kan., as a division of ARA. Cascio will remain at its helm as president and will report to Wilson.

"We have a lot of knowledge of supermarkets, and they're [ARA's] the world's leading foodservice operators and it's a great marriage," Cascio said of the coupling.

ARA, a diversified management services company based in Philadelphia, is parent company of the country's second-largest contract-feeding business.

"I feel very, very strongly about how good this was for ARA," Wilson said. "ARA is a management services company, so we're used to dealing in situations that require managing food-court operations."

He added: "How many times do you get the opportunity to enter a whole new market in foodservice? How many new markets are there?"

At the moment, the answer seems to be supermarkets and general merchandise retailers. And foodservice operators are entering these alliances at a quickening pace.

In a philosophically similar union, Morrison Hospitality Group, the contract-feeding division of Morrison Restaurants Inc., announced last fall that it would manage foodservice outlets throughout the Phoenix-based Smitty's Super Valu Inc. chain.

In addition, McDonald's is testing the retail waters at both Wal-Mart and Jewel Food Stores; PepsiCo's Taco Bell and Pizza Hut divisions have also inked deals with Wal-Mart; Nathan's Famous hot dogs are available at 28 Caldor's; Little Caesars is working with Kmart; and Burger King products can be ordered at two Chicagoland Amoco gas stations.

The Supreme Court concept was unveiled in the fall of 1991 by Cascio and Ira Blumenthal to be developed by their company, Co-Opportunities. The first Supreme Court opened at that time in a Price Chopper in Kansas City, Mo., featuring Bennigan's, Chi-Chi's El Pronto, Godfather's Pizza, T.J. Cinnamons and Ricky Shaw's Oriental Express. A second opened at a Cleveland Stop & Shop in 1992. Blumenthal sold his interest in the venture to Cascio last fall.

ARA faces some big hurdles before it can profit in the burgeoning market, however.

"The success of foodservice in supermarkets will be nine-tenths execution," Wilson said. "The challenges will really be thinking out the design of the facilities, the number of concepts and what concepts, the management of capital and labor to ensure that these courts are in fact viable to the supermarket industry, and delivering a consistent, quality product so that customers continue to come back and have confidence in the food they're purchasing."

Because the Marketing Services Group already oversees purchasing, distribution, marketing and construction for ARA, it is qualified for the task at hand, Wilson added.

ARA will solicit new food-service concepts to join its courts and also plans to market ARA in-house brands through them in situations where a franchise agreement prohibits the commercial brand's use, Wilson said.

"This concept is coming right out of the ground from zero," he noted.