Minyard CEO Touts Carnival Prototype as Vanguard
By ELLIOT ZWIEBACHCOPPELL, Texas — Minyard Food Stores here is in a carnival mood this week as it prepares to open a new prototype under its Carnival banner in Dallas.
The 56,000-square-foot ground-up store, scheduled to sive consumer research to develop a signature market that communicates everything the chain hopes to be going forward in terms of product mix, variety, pricing, quality, service levels and store standards, Mike Byars, president and chief executive officer, told SN.
“This store reflects who our customers are and what they tell us they want,” he said. “Based on that information, we’ve spent the last few months refocusing our management team to develop a prototype that aligns what we do at store level with what we’ve learned from customers. And the research we did with both customers and vendors a few days before the store opens tells us we’re on the right track.” Although the company has upgraded product mix, variety, pricing, quality, service levels and store standards at its Minyardand Sack & Savebanner stores, Byars said he believes most long-term growth will come from the Hispanic-driven Carnival banner. “That will be our primary banner for growth because of the high Hispanic population in the Dallas-Fort Worth metroplex and the expectation that demographic will grow another 40% over the next five years,” he pointed out. “The banner has done well for us in the past, and we felt we could improve it with the new prototype.”
The chain, which was sold by the Minyard family two years ago to a Texasbased private investment group, operates 66 stores, including 25 under the Carnival banner, 22 conventional Minyard stores and 19 Sack & Save warehouse locations.
Byars joined Minyard in early 2005 as executive vice president, operations, and succeeded Ron Johnson as president and CEO in June. Johnson, who also held the title of chairman and who was managing partner in the investment group that owns the company, has retired and no longer has any ties to Min yard, the company told SN. Industry estimates put Minyard’s sales at about $850 million — down slightly from an estimated $900 million a year ago but up from where they were after the company shut down four locations over the past year and began improving its in-store attri butes, Byars noted.
Minyard has also ben efited from the closure of some Albertsons stores, he added. “We’ve been the recipients for the last few months of some of Albert sons’ displaced customers,” he said.
Competitors include Kroger, Safeway’s Tom Thumb, Wal-Mart Super centers and Neighborhood Markets, Albertsons, Fiesta and independent operators. Byars said he believes Minyard has the ability to react more quickly than his national competitors. “Our focus on pricing has enabled us to be a lot more nimble and flexible in an evolving environment,” he said. “By offering the right mix, we’ve been able to re define ourselves as the price leader in each area.”
Management has identified a number of its existing stores for possible conver sion to the Carnival banner, Byars said. “The plan is to learn what we can from the prototype and then go store by store and make decisions on which ones should be converted,” he said.
“This market is shifting, and we’re very fortunate to have stores located where we do because the Carnival banner makes sense at many of those locations. With a lot of the Sack & Saves in the middle of the mix, it makes sense to shift some of those to Carnival. But we don’t want to rush anything. We think it’s more important to get everything right than to do it too quickly.”
The company plans to open two more Carnival prototypes in Fort Worth in midto late 2007, Byars said. He said the company hasn’t determined how many Sack & Saves might be recast. Byars declined to say whether Minyard has sub mitted bids on some of the 22 stores Albertsons LLC has put up for sale in the Dallas-Fort Worth area, “though we’re always inter ested in opportunities, and some of those stores would be positive opportunities for us,” he acknowledged. Minyard is consider ing opportunities to grow sales of its Hispanic line of private-label goods, called Carnaval (spelled differ ently than its store banner). The company began rolling out about 100 SKUs of Car naval products to its stores in April, and “we think it’s unique enough to travel out side our area, though that’s for sometime in the future,” Byars said.
The prototype scheduled to open this week features attributes collected by the management team from previous positions at other firms, he said, as well as from extensive tours in the U.S. and Mexico.
Minyard also hired two Hispanics for top-level po sitions — Saragoza Ramos as senior vice president, op erations, and Mario Chavez as vice president, Hispanic merchandising.
Giving SN an overview of the prototype before it opens, Byars said the store will offer freshly made au thentic Hispanic foods with a seating area; separate ser vice meat, deli and seafood departments; a juice bar; a scratch bakery; a tortilleria; and a Mexican-style phar macy with a clinic.