by Terrie Ellerbee/associate editor
Chicago is the country’s third most populous city behind New York City and Los Angeles. The city with working class roots today has world class amenities, and progressive cities like it will own tomorrow. It seems to link the past, present and future seamlessly, as though each event unfolds just so the next can.
Chicago certainly has its place in political history. Abraham Lincoln won the Republican nomination for president in 1860 in Chicago. The nation’s first African-American president calls Chicago home.
Chicago sets high standards. It hosted the 1893 World’s Fair, which is still considered the most influential event of its kind in history.
This year, Illinois Gov. Pat Quinn announced that $1 million in Illinois Jobs Now! capital would be used to build a state-of-the-art electric vehicle charging infrastructure in the Chicagoland area. The project will result in the largest concentration of DC quick-charge stations (280) in the world.
The Windy City also triumphs over tragedy. In 1871, the Great Chicago Fire destroyed the city’s central business district, but the destruction was followed by rapid rebuilding. The world’s first skyscraper—The Home Insurance Building—was built in Chicago in 1884.
Its economy is one of the most balanced in the U.S. because it is home to many diverse industries.
It is fitting that such a city would be located in a state that has been called a “microcosm” of America. “Will it play in Peoria?” is a metaphor for whether something will appeal to mainstream America for a reason. It doesn’t get more mainstream America than Illinois.
With a proud history and a future filled with innovation, there still is plenty of appreciation for tradition in the Land of Lincoln. The state’s independent grocers are proud of their histories, their families and employees, and they are proud of what they do every day in their communities.
IFRA & IRMA offer members many benefits
The Illinois Foods Retailers Association (IFRA), now in its 86th year, has about 400 members companies operating more than 1,000 independently, family-owned stores throughout the state.
But, as more companies consolidate, paid membership has become a challenge.
“I’d like to think that all retailers in the state are members of their state association,” said Brian Jordan, president of the IFRA. “Some retailers are dues-paying members, others are non-dues-paying members. I say this because all retailers benefit from the programs and services offered by their state association, especially in government affairs, both legislative and regulatory.”
He admits the association has “to do a better job reaching the non dues paying members and to stress upon them the importance of their financial support through dues payment.”
Jordan offered two examples why supporting state and national associations matters. One is the recent passage of the Durbin Amendment, which addressed the high cost of debit card swipe fees, he said. Sen. Dick Durbin is a U.S. senator from Illinois.
IFRA member Art Potash, president of Potash Markets, which has three downtown stores in Chicago, flew to Washington D.C. on more than one occasion and traveled over Illinois with Sen. Durbin talking about the importance of the amendment, Jordan said. The association supports grocers being heard in D.C. and in the state legislature.
Another example is legislation recently passed by the Illinois legislature regarding workers compensation that David Vite, president of the Illinois Retail Merchants Association (IRMA), was instrumental in getting passed that could save companies approximately 15 to 20 percent in premiums. It was an issue that hadn’t been seriously addressed in 20 years, Jordan said.
Rob Karr, SVP for government relations for IRMA, told The Shelby Report that it is the “most significant reform we’ve had in 30-plus years, which is on target to save businesses a minimum of $500 million. That’s a big deal.”
Karr’s group has been working with the joint committee of the state house and senate revenue committees that met after a legislative session during which corporate and personal income taxes were increased.
“We’re working to make sure that doesn’t happen again,” Karr said. “They are looking at ways to try to reform the corporate income tax to make it more friendly than it is now.
“(Grocers) are operating on thin margins, so our job before the legislature and the state government is do everything we can to make sure the government doesn’t further erode those margins,” Karr said. “In fact, we’d like to do things that would help increase those margins.”
Other issues that seem to keep coming up are a minimum wage increase and a mandatory plastic bag recycling program, both of which Karr, who has served as legislative consultant to the IFRA for 17 years, said have so far been contained.
Karr said work with a wide array of groups is under way to implement a health exchange in Illinois, which he said “could be a good thing for the smaller employers in the state.” Implementation is a battle the associations don’t want to lose because “details matter,” Karr said.
That is “just a smattering of the agenda items that we’re currently working on,” Karr said.
This year, IRMA was instrumental in getting the Main Street Fairness Act passed in Illinois. It requires remote sellers to collect and remit the same sales tax that Main Street retailers do, and has been referred to as “the Amazon tax.”
When all is said and done, the economy is still top of mind for consumers, retailers and politicians alike. This also is where the work of IFRA and IRMA is paramount, because those who live and die by the ballot box seek out their opinions.
“We’ve seen legislators being far more proactive in reaching out asking about proposals or ideas, things they’ve read, anything they can do to try to make the situation better. So that sensitivity helps tremendously,” Karr said. “They seem to understand that if Illinois, in particular, is going to turn its economy around and stabilize not only its revenue situation but it’s government as a whole, that the private sector has to be part and parcel of that and a partner in that process. They are very sensitive to it and I think in a positive way.”
It is important work, and work worthy of support by all retailers because things that impact small retailers also impact large ones—it’s just a matter of scale, Karr said.
Every single association member is important.
“IFRA continues to reach out to our non-dues-paying members, with the help of their wholesale suppliers, to encourage them to support the association through membership dues,” Jordan said.
The IFRA recently welcomed new members Chapman IGA in Clinton and Allen’s Market in Ashland.
“We thank Supervalu for their words of encouragement and thank Mike Chapman and Harold Allen for responding to our call,” Jordan said.
While Jordan didn’t specifically point this out, he did mention Walmart’s influx into Chicago with its Express and Neighborhood Market formats. On Sept. 21, Walmart opened its third Chicago store in the West Loop’s Presidential Towers. The world’s largest retailer will open at least two more stores before the end of the year, both Express banner stores, with four stores of various formats coming in 2012 and a Supercenter store opening in spring 2013.
Central Grocers, with the cooperation of the IFRA, held a program in October to bring members’ attention to these stores and to provide operating tips and programs that would help them effectively compete with them.
Another accomplishment for the association was the implementation about 16 months ago of a 401K plan offered to its members.
“I think this is important because retailers going forward, especially in light of union stores vs. non-union stores, the non-union stores really need to be aware of the fact that many changes are happening at the National Labor Relations Board level that could possibly make it easier for unions to come in and organize a retail store,” Jordan said.
He said he first began thinking about the 401K plan option when “card check” legislation—that would have, if passed, done just that—was being debated. He said non-union stores should be looking at program for their workers.
“There are savings to be had for large retailers and for the smaller retailers; they get the benefit of the numbers and dollars currently in our fund,” Jordan said.
The fund currently has $30 million in it, with approximately 15 adopting members. The growing program was developed through the Gallagher Benefit Services Corp. with TransAmerica, Jordan said.
The Shelby Report’s Geoff Welch had the chance to speak with three independent grocers in Illinois: Rob Prisco, Mike Schuette and John Cortesi. Their stories, which follow here, are grounded in tradition. Their businesses survive today because they focus on serving their customers. Their hope is that tomorrow will be better.
Prisco Fine Foods makes it personal
Three years before the stock market crash of 1929, Italian immigrants Tony and Mary Prisco opened a neighborhood grocery store in their home in Aurora. They reached out to the city’s diverse neighborhoods and their compassion, humor and hard work made them beloved in their community.
Today, more than 80 years later, Prisco Fine Foods offers personal service, great value, a pleasant environment and quality food, including its own award-winning meats and sausages.
Rob Prisco, the founders’ grandson, now operates the store. He credits his father, an accomplished meat cutter, for building much of the business around meat and homemade sausages.
The meat department today features Seaboard All Natural Pork, which is used in the homemade sausage. The supermarket is emphasizing natural meats and has a branded line of beef and chicken products. The deli offers homemade salads and entrees that have no additives or preservatives.
Prisco Fine Foods settled into its current 15,000-s.f. location on Prairie Street in the Aurora University area in 1993. The building, a former market, underwent “a total and complete rebuild,” Prisco said. Three major remodels followed, with the most recent occurring in 2007, just before the recession.
Prisco is not afraid of tinkering with ideas. Even if they fail, they could open up other possibilities and opportunities.
“We experimented in 2008 with an off-site coffee shop, hoping to capture some of the university crowd that’s in this neighborhood,” Prisco said. “It didn’t work out very well. Then last year we actually moved the coffee shop into the store—in the deli produce area—so now we have a nice in-store café, which is working out pretty well.”
Prisco Fine Foods belongs to the Central Grocers Coop, and participates in all of its programs—advertising, purchasing, grocery, deli, produce and meat.
The small supermarket is pitted against “giants and lots of discounters,” Prisco said.
“We’ve always fared pretty well against the discounters in normal times, but in these recessionary times, it’s pretty tough,” he said.
Walmart has two locations, one a Supercenter, within two miles of Prisco Fine Foods. Woodman’s is just to the north and a trio of ALDI stores is located in Aurora proper.
“We’ve felt a lot of pressure from discounters these last couple of years,” he said. He quoted the Central Grocers Coop CEO, James Denges, who told him, “I think of all of our members, you guys have the toughest competitive situation of anybody out where you are in far western suburbia.”
Prisco is “proud of the fact that we’ve hung on,” he said.
The family-owned business is always looking for answers and hoping to turn things around. Its focus always has been on service, and now that emphasis is stronger than ever.
“You have to differentiate yourself and that’s the way we can do it,” he said.
Unfortunately the staff has shrunk since the recession began. A couple of meat cutters were let go. Most employees are still hanging on, but those who have moved away or retired have not necessarily all been replaced.
Prisco wants employees to feel like they are part of the process, he said. In 2006, after the large Woodman’s store opened, he began posting daily sales around the time clock for all of them to see. Newsletters go out at least once a month “to let them know how the company is doing and what we’re thinking,” Prisco said. “They can see for themselves where the sales are compared to last year. That’s proved to be a pretty valuable tool.”
He also said the communication has helped the store keep good people working there. The owners and their long-term employees have good relationships with customers, too.
People familiar with Prisco Fine Foods know they can call up and order a fresh turkey or a standing rib roast, and have it delivered to their homes. With the holidays coming up, the meat and deli departments will be hopping.
“We have a home delivery service,” Prisco said. “One of our long-time employees runs that for us, talks to people on the phone, picks their order and gets it out to them.”
People also can fax or email their orders to the store and then simply pick them up later.
“We will pick it and run it through the register … and we don’t charge for that,” Prisco said. “That’s another thing we’ve instituted in this last year or two just to try to pick up some extra sales.”
Employees carry groceries out to the car for customers.
Prisco has taken service a step further by volunteering his time on the board of the local chamber of commerce. The chamber has just started a “shop local” initiative. Banners in the store and handouts encourage the community to shop local independent small business.”
Meanwhile, at the store, Prisco and his staff are “just working hard, hoping that we can start to see a little bit of an upturn.”
Schuette’s mission is ‘Forever Local’
Schuette Supervalu Markets have been operating in Illinois since 1863. Four generations have led the family-owned business.
Mike Schuette started in the family business when he was 13, and while he was going to school he worked at other stores. In all the years since then, except for when he was in law school, he has been in the grocery business.
“I missed it when I was in law school,” he said. “I love the business.”
The fifth generation will be a little bit different.
“We’ve had four generations of males running the business up to this point and now it looks like the fifth generation is going to be all ladies,” said Mike Schuette, owner. “I think they might know more about it in the long run than the guys anyway. It’ll be different. I can tell you that.”
No doubt that love has been passed on to Sarah Schuette Goodwin and Tessa Schuette Wiegman, the fifth generation of operators and the first sisters to take on the task.
Like her father, Sarah holds a law degree earned from Cornell University in New York as well as an undergrad degree in industrial and labor relations, also from Cornell.
Tessa has a master’s degree in business from Southern Illinois University in Edwardsville and an undergrad degree in business marketing from the University of Saint Thomas in St. Paul, Minn. She worked for Cub Foods in Chicago before returning to Schuette Stores in 2007.
Both spent much of their teenage years working various positions within Schuette Markets, in the office and in the technology side of the business. Like the generation before them, they began working at age 13 and continued throughout high school and during breaks in college.
While the leadership may look a little different, what won’t change is the way Schuette Supervalu Markets works with local suppliers, growers and producers to offer customers the best possible products. Schuette Markets recently took those relationships up a notch when it began working with them to improve their products. The goal is not to just make them a little better, but “substantially” better than products available in the rest of the market, Mike Schuette said.
They call it “Forever Local.” It all begins on a farm, the 1,000-acre Seven S Farm in Breese. It provides some of the meat sold in Schuette Supervalu Markets’ five locations.
“We are able to initially start the whole process of trying to develop unique, high quality products that were at the same time healthy for the consumer,” he said.
Schuette supports their growth by giving suppliers and producers feedback about their products, arming them with firsthand knowledge about what’s selling and what isn’t and what customers like and don’t like.
“What it’s done is given us an ability to not only offer the customer unique, high quality foods, but we’ve cut out a lot of the middlemen, so we can do it at a lower cost. It’s really given us an advantage against a lot of our competitor stores also.”
The higher quality products are exclusive specialty items that local residents seek out in Schuette Supervalu Markets’ stores, which in turn helps the retailer stay profitable and grow.
“It’s a unique opportunity,” Schuette said. “We’re trying to maximize those relationships.”
They are important to all concerned.
“This area is our home, and we need each other to survive,” he told The Shelby Report. “We are not trying to compete at all with our producers, suppliers, communities and employees. Rather, we’re trying to partner with them, and that’s actually become a unique mission today.”
It is the opposite of what Schuette said he has seen in the past—big operators and big box buildings who “drain the towns of everything they can get out of them.”
He describes the new smaller stores Walmart is quickly opening as “elephants with roller skates on.”
“I think all they are going to be is dangerous to themselves and to us and everybody else around them. It’s just scary. They are coming quick to try and figure out a way to compete because they are struggling, and so they are making a run here, but putting on those roller skates isn’t going to do it.”
Meanwhile, the family-owned and -operated grocery company that began operation when Abraham Lincoln was president will stay put.
“We’re not going anywhere else,” Schuette said.
Schuette Supervalu Markets are located in Breese (population about 4,300 in 2009), Highland (17,400), Carlyle (7,600), Troy (14,700) and the tiny community of St. Rose (1,319 as of the 2000 Census), which is so small it doesn’t even have city limits, Schuette said. “It’s out in the middle of the cornfields.”
These are the places that have been stripped bare.
“Some of the towns that we’re in—Walmart came in and wiped out the rest of the entire business downtown, all the other independent businesses, and now there’s no longer a chamber of commerce even in the town because there are not enough businesses in town to keep them going,” Schuette said.
“That’s not the future of our country,” he said. “I’ve seen how serious it can get.”
Back during World War II, the Schuette’s chain, once 18 stores strong, dropped down to just four. So many people in the area were drafted or enlisted that there wasn’t enough manpower to keep all of the stores going.
Recently, Schuette has seen a lot of consolidation and estimates that about a third of retailers that once operated in the area have closed. His chain will likely grow again with the new generation taking over.
“Yes, we’ll be looking for more stores. We would like to grow, if possible, back to at least 10 stores within the next six or seven years,” Schuette said.
As for the competition, well, Mike Schuette has seen it all.
“There are still a lot of stores out there. I think the competition is making retailers be better retailers. Now, there are differences in how people achieve being a better retailer. Some are pretty cutthroat and self-serving, and some are really trying to serve their communities.
In the end, it’s simple.
“I am an independent retailer and proud of it,” Schuette said.
The Schuettes’ grocery company also operates a convenience store, Little Rose’s General Store, which is located on the site in St. Rose of the original general store that opened in 1863.
Sunset Foods focuses on customer service
Sunset Foods is another proud, family-owned grocery company. Established in 1937, its first store opened in Highland Park in a space that was only 25 feet x 30 feet. There were 12 other grocery stores in town then, but only Sunset Foods remains today, according to a story in the Daily Herald.
Sunset Foods has grown over the years to have locations in Northbrook, Lake Forest and Libertyville.
In January this year, the company opened its fifth store. The Long Grove location is the first new store for Sunset Foods since 1998.
“We believe the Chicago North Shore market remains an ideal niche for us,” said John Cortesi, president and CEO of the third-generation grocery company.
Located at Hwy. 83 and Aptakisic Road, the new store is 50,000 s.f. About 180 new jobs were created. All told, the grocery company employs 900 people.
The community was ready for the store, too. The Daily Herald described the opening of the Long Grove store as a celebration. Shoppers quoted in the piece were particularly happy about the prepared foods and healthy choices.
The newest Sunset Foods location also features an extensive organic and gluten-free selection, a fresh sushi bar and an on-site cheese aficionado who answers questions and cuts imported and domestic specialty cheeses to order.
It also has a complimentary coffee bar. In fact, Sunset Foods has offered free coffee since it opened its doors in 1937, and the tradition carries over into all five stores.
Sunset Foods rests its reputation on service, and lets the customers do the talking.
Allen Perin, VP of operations, told The Shelby Report that customer service is about being “great listeners.
“Whatever they want, we follow their needs,” he said. “That’s one of our biggest advantages. We become part of their families.”
It is a sentiment shared by the company’s CEO.
“I think what’s most important today is taking care of the customer. That’s what it boils down to,” said Cortesi. “We understand our customer. We’ve been here a long time. I think we have a very strong foothold in this marketplace.”
The company has branded itself with the motto “People Are Friendlier Around Sunset.” Long-term workers are another advantage to being in business so long. Sunset Foods has employees who’ve worked for the company more than 50 years. Perin is one. Frank Lomoro, VP and general manager, has been with the company for 35 years.
“We have a world of experience in our organization,” Cortesi said. “We treat them well. We pay them a fair wage. I think that all equates into keeping good, knowledgeable staff. We’re going to continue to do that.”
As Sunset Foods prepares for its 75th anniversary next year, it will continue to focus on the customer’s needs, especially in these tough times.
“There’s still some uncertainty in the marketplace. There are concerns about an economic slowdown, but we remain optimistic,” Cortesi said. “People are watching what they spend, and it’s up to retailers today to keep that in mind in the way they merchandise. We continue to offer value and quality, and we are gearing our merchandising toward those needs.”