Saturday, July 28, 2007

What's Right About Central Market & Why I Worry

What's right is somebody cares. I mean the management at Central Market care about their product. I've met them, from the top down, and it shows, or at least it has for the last 5 years. They work in a Disneyland for grocery shoppers, and most of them enjoy it. It shows in the way the fresh foods are cooked and presented, the way the breads are displayed, and even in the cleanliness of the aisles. The cost of this care may be a higher prices, sometimes, but not compared to dining out for a comparable meal. Consider this: In less than 5 minutes, you can make the salad of your choice, with 15 different fresh vegetables, plus chicken and cheese and those kinds of things, grab a small fresh roll and a drink, and still be around $10. Can you get a comparable salad for lunch at a restaurant? Probably not. It's not cheap but it's not high rolling either.
Now to my concerns.
Every enterprise, once it surpasses a certain benchmark in gross sales, success in public perception and overall profitability, has to decide how to address the question of how much quality-management-service it needs while keeping these same levels of profitability and growth. In Central Market's case, they have to decide if each store is to have an on-site, experienced GM, assistants that are well trained in their departments, and employees that actually enjoy what they are doing. That is difficult to do. And expensive. Like any business, if it's not profitable, it can't continue, but if it is profitable, the temptation exists to fiddle with the formula t try and "squeeze out" a little more profitability.
I worry that a boatload of bookkeepers at the end of some long, Central Market office hallway, are looking over their little spreadsheets, asking the purchasing agents, "why can't you buy this cheaper? Or, "Can we buy less expensive cuts of meat for our sandwiches?" I worry that they will pursue short term gain, and eventually lose the "it" that they speak of when they say, "he gets it", referring to this grocery store concept. Places like Central Market need high employee and shopper enthusiasm for food in order to maintain the standard, and bookkeepers seldom understand loving something outside of the dollar based price-benefit equation. That's what I worry about. That they will forget that there is just a little of "art for art's sake" in the concept.
Is the Central Market division of the HEB Grocery Stores profitable? I don't know, HEB is not a publicly traded company, so it is not public information. I hope it is very profitable. And if it is I hope they don't mess with a good thing.
Have I noticed a downward trend? Only slightly, in that less frequently do I notice the managers walking the floor, and more frequently do I notice long lines forming, and employees just trying to get through the day. But that could just be a temporary lull after a pretty energetic start, or it could be a trend, whichever, I hope it doesn't continue.

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