Smith's raises the ante in Calif. competition

Drug Store News, Sept 7, 1992 by James Frederick

FULLERTON, Calif. - Smith's Food & Drug Centers is cutting a new swath into Southern California's crowded marketplace with a potent combination of dazzling combo stores, proactive customer service and everyday low prices.

Smith's was here before, beginning in 1971 with a tenuous foothold that depended on acquired store facilities and California's exploding growth rate. The Salt Lake City-based combo chain pulled out in 1984, but the state's allure was too much to resist forever. Smith's re-entered the region a year ago, beginning with an 80,000-square-foot combo in Oxnard, Calif., and quickly began expanding in the greater Los Angeles region. More than a dozen units have already opened in towns like Torrance, Stanton, Lancaster and Inglewood; more stores will quickly follow.

This time, Smith's seems more than ready. For one thing, the chain is building its own stores, and they're state of the art. "The comment we hear from customers most often is how beautiful the store is, "said Zane Day, manager of the nine-month-old Smith's in this growing suburban city. He said Smith's policy is to set the highest standards in the industry for cleanliness and design, with nightly floor polishing, a full-time cleanup person and a complete store overhaul every five years.

Smith's matches the appeal of an award-winning store design with one of the broadest non-foods selections in combo retailing, including a pharmacy and drug department that's integrated from the ground up with the store's format. Pricing is also paramount: the chain does frequent market baskets, advertising price comparisons in its circulars; buys aggressively to get the best deals; and employs a pricing coordinator at each store. In-store promotions are continuous, and Smith's hammers hard on the theme of everyday low prices.

The chain backs its growing store network - it will finish the year with roughly 125 large combos in eight Western states - with advanced technology and local distribution capabilities.

On the technology front, the chain has enhanced its ability to analyze POS data for the most productive buying and merchandising, and recently added a new automated receiving system for direct-delivered items. And it continues to add automated distribution centers to support new clusters of stores, with the addition last year of a million-square-foot DC outside Phoenix to handle the growing West Coast expansion. Another DC is slated for Riverside, Calif., in early 1994.

Thus, Smith's is better-equipped than most to target its stores to local market demands while maintaining strong central controls.