Castle Retail Group operates five grocery stores, all within the city limits of Memphis. Three of the locations operate under the Cash Saver banner. Ranging in size from 30,000 to 69,000 square feet, they operate as a cost plus-10-percent deep-discount price format.
CRG also owns two smaller footprint neighborhood stores. High Point Grocery, which opened in 1949, is a beloved 6,000-square-foot-store in East Memphis. Last year, it was named one of the top three favorite local stores by the Memphis Flyer.
The second small footprint store, coming in at 13,000 square feet, is South Point Grocery, located in Memphis’ downtown arts district. CRG used the shell of a restored grocery wholesaler building built in 1920 and transformed it into the “coolest little store in the city.”
Though it may sound corporate, the letters that make up Castle represent the first initials of owner and CEO Rick James’ wife and five children – Cathy, Addie, Sarah, Taylor, Lauren and Erick.
All of them have contributed to the success of the business over the years. Son Taylor currently supervises the small-format stores, daughter Addie is the director of marketing and Lauren works as the human resources manager.
The community and his peers have bestowed several accolades this year on James and CRG, which also is celebrating its 20th anniversary in 2024. James, a 47-year career veteran of the grocery industry, was named CEO of the Year by Memphis Magazine. In addition, the Tennessee Grocers & Convenience Store Association recently recognized James as its 2024 Retailer of the Year.
James got his start in the grocery business with Kroger after graduating from college in 1977. He made the move to Memphis in 1987, taking a job with Malone & Hyde, a regional wholesaler serving independents in Tennessee, Arkansas and Mississippi. In 2004, he and his wife bought four of the company’s stores.
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Price sensitive
The goal at Cash Saver, according to James, is to be the lowest priced store in the neighborhoods it serves.
“We are full-service grocery stores with an emphasis on fresh, especially our meat departments,” he said. “But throughout the store, we focus on buying at the lowest cost possible and passing the savings on to customers.”
James said Cash Saver customers tend to be a little older than the median age and about 40 percent of transactions involve Supplemental Nutrition Assistance Program benefits.
The company’s reputation for selling at low margins makes it a favorite for manufacturers looking to move inventory quickly. As a result, James frequently offers “truckload deals” and “opportunity buys.”
The three Cash Saver stores operate within the inner city, while the most recent addition in South Memphis filled a food desert that dated back to 2018.
“An important part of our family mission with these stores is recognizing that when our customers can save on their overall grocery bill, they have the means to meet other financial obligations, including rent, health care and transportation. It’s why we say, ‘We’re known by the money you keep.’”
James described the two small-format stores as neighborhood-centric, customer-focused locations that fulfill customers’ need for fresh foods, grab-and-go items and hard-to-find products. The stores are known for their customer service and for carrying a wide selection of products from local entrepreneurs and producers.
Of the two, High Point Grocery is in a more suburban area that features a mix of young couples, retirees and longtime residents.
South Point Grocery in downtown Memphis largely caters to young professionals and high-income seniors in apartments, condos and single-family homes. It has a reputation as a go-to spot for some of the best sandwiches in the city.
Standout features
The meat department is a high-volume contributor to CRG’s overall sales, generating a higher percentage than the average supermarket. James employs skilled meat cutters in all locations and carries only the highest quality of Angus beef, pork and chicken.
“Memphis is home of the World Championship Barbecue Cooking Contest each year, so we have a lot of accomplished grill masters in the area,” he said. “Throughout the warm weather months (which extend into November in Memphis), our customers are constantly cooking out. The primary meat on the grill is pork, both spare ribs and shoulder for pulled pork.”
Another popular food choice is fresh greens. During the Thanksgiving holiday period, James said he will sell about seven tractor trailer loads of fresh turnip, mustard and collard greens.
Local products are a fundamental part of James’ merchandising and marketing program.
“We invite local producers one day each month to a sort of ‘Shark Tank’ with our store managers, where they can present their products, tell us their stories and possibly get an opportunity to be stocked on our shelves,” he said.
He added that many local companies, including one that now has national distribution, got their start in his stores.
“Each of our stores is merchandised to fit the neighborhood, so each is unique,” he said. “The advantage of having long-term employees and management in each location is they are able to learn directly from our customers what they are looking for.”
Asked about his stance on leveraging technology to grow sales, James said he listens closely to industry discussions about emerging options and turns to third-party providers that have the expertise to help the company develop them.
“We have self-scan in some locations, offer online shopping with curbside pickup or delivery options and have a strong social media presence,” he said. “Having young kids involved in the executive decision-making helps keep me tuned into new technology.”
Market challenges
Some 300 employees work at CRG’s five stores. And like most retailers across the U.S., James has not been immune to employment challenges. He called the last five years “very challenging” in that regard, noting that entry-level employees continue to account for most of the turnover.
James is thankful for the number of workers who have stuck by him over the years.
“We have such a solid core of long-term employees that the turnover at entry level doesn’t really impact the overall operation,” he said. “We treat our employees as an extension of our family, with many of them working for me for over 32 years.”
What has impacted his business, at times, are suppliers that are routinely understaffed.
“Delayed deliveries and constant turnover have impacted service we see from third-party providers and DSD vendors, sometimes to the detriment of store conditions,” he said.
James credits his primary wholesaler, Associated Wholesale Grocers – which has a distribution center in nearby Hernando, Mississippi – with helping CRG stay competitive.
“Even though we are a small independent, our proximity to AWG’s warehouse and their commitment to keeping us competitive helps mitigate our size differential with the larger chains,” he said. “We are fortunate to have a great partnership with AWG.
“As a co-op with a board of directors comprised of independent retailers, they are very responsive to the needs of their customers, regardless of how many stores you operate. That and great employees led by the best store management team I’ve ever been associated with has been the foundation of our success.”
Coming soon
With the popularity of South Point Grocery, CRG has had several developers express interest in bringing a smaller grocery format to other areas of Memphis, something James is exploring.
“We think there is a great interest and opportunity to expand our 20,000-25,000-square-foot format throughout the city. Stay tuned for more,” he said.
