Spectacular Schnucks

Community stewardship, breathtaking architecture, mouth-watering foods and in-store theater create a unique shopping environment at Schnucks.

By Richard Turcsik

The folks at Schnuck Markets bill themselves as “The friendliest stores in town,” but they may be selling themselves short. One look at its Des Peres and downtown St. Louis flagships reveals that Schnucks also operates the trendiest, most innovative and architecturally striking stores in town.

Through its support of the Salvation Army, Susan G. Komen for the Cure and numerous other charities, Schnucks is among the most generous and community-minded employers in town. And suppliers rave about the 106-unit chain’s honesty, integrity, work ethic and civic pride. To help spur redevelopment in beleaguered downtown St. Louis, this August Schnucks opened Culinaria—a new urban concept that is breathing new life downtown and serving as an anchor for the new condos being carved out of old office buildings, warehouses, department stores and lofts.

The chain is also known for treating its employees, or “teammates” as it refers to them, very well; Schnucks has one of the lowest turnover rates in the industry.

Industry powerhouse

Founded in 1939 with a single store in north St. Louis, through internal growth and acquisitions Schnuck Markets has grown into an industry powerhouse, operating 106 stores in seven Midwestern and Southern states, employing 15,500 teammates and having a 2009 volume of $2.5 billion. Schnucks is self-distributing and also operates a central commissary in O’Fallon, Mo., as well as a central bakery and floral design center.

The chain operates 67 stores in Metro St. Louis, which includes Illinois, and is the seventh largest employer in the region, according to the St. Louis Business Journal. Schnucks employs more area residents than esteemed local companies such as Monsanto, Anheuser-Busch InBev, Edward Jones and even the City of St. Louis.

Yet in an industry known for its conglomeration and consolidation, Schnucks, along with St. Louis competitors Dierbergs and Straub’s, remains family-owned, headed by chairman and CEO Scott Schnuck and his brother Todd, who was recently named president and chief operating officer.

It is for all of these reasons that Grocery Headquarters is proud to honor St. Louis-based Schnuck Markets as its 2010 Independent Retailer of the Year.

“We’re trying to really respond to what the customer is looking for and to be responsive to that customer,” says Scott Schnuck. “We’re doing that by being food experts and creating a food experience in our store that is the best in the marketplace. We really have stepped up our food experience/expertise and now we’re talking about creating a spectacular food experience and doing it through our teammates.”

That’s being accomplished through things like wine seminars and tastings. “It’s been a way for our teammates to really get excited about sharing their knowledge and food expertise,” says Todd Schnuck. “But we go beyond just having wine samples. We’ll do a [food] pairing with each wine so it gives our people an opportunity to speak to the product, its quality, and why it and the wine work together.”

Quality from the top down

“One of the things that really sets Schnucks apart is the quality of their management team,” says Doug Herrington, vice president, sales, Central Business Unit, for Coca-Cola Enterprises, based in Niles, Ill. “Their management team is seasoned, they are forward thinking and they work with the supplier community in a partnership to drive the business forward. I’ve always found them to be upfront and very ethical.”

Schnucks has worked on lowering its prices, partly to confront inroads made by Wal-Mart, but mostly to help its customers weather the recession.

“Schnucks is very much involved with the community that they service and very engaged in meeting customers’ needs, particularly in these challenging times,” says Paul Cooke, vice president, trade and industry development at fellow St. Louis-based Nestlé Purina PetCare. “As a manufacturer we find Schnucks is very focused on providing solutions and value to the customers that shop their stores.”

Schnucks also works hard to install civic pride. “They promote our St. Louis Cardinals with a program that allows customers to support the team by buying Cardinal baseball programs through Schnucks stores. Our clients buy the programs and then part of the proceeds go to the Cardinals to support the team,” says Dennis Kenkel, marketing manager at Crossmark, a sales and marketing company based in suburban Bridgeton, Mo.

Crossmark and Schnucks have a relationship stretching back some 45 years, Kenkel says. “Schnucks is a fair and honest company to deal with,” he says. “Everything is above board and on the table. It doesn’t make any difference if it is us representing them or Advantage or Acosta, it’s all about them driving business.”

Champions of charity

Hometown brewer Anheuser-Busch also has deep ties with the chain. “Anheuser-Busch has a long-standing relationship with our friends at Schnucks,” says David Peacock, president, Anheuser-Busch, Inc. “Over the years we’re served together as community leaders for charitable and sporting events in St. Louis and as business partners to execute great in-store promotional programs throughout the Schnucks marketing area.

“Their industry leadership and innovation is evidenced by their involvement with the Food Marketing Institute, as well as their Culinaria initiative, which has been a vibrant addition to the City of St. Louis.”

“One of our core values is community involvement,” says Scott Schnuck. As an example he cites the chain’s involvement with the Salvation Army. This year Schnucks worked with Fox 2 News in a day-long bell ringing campaign at its Maryland Heights store, raising almost $6,000 in one day. “The Salvation Army’s Tree of Lights originated in St. Louis many years ago. My uncle, my father, my older brother Craig and I have all chaired a Tree of Lights campaign.”

Schnucks has also done a stellar job revitalizing downtown St. Louis, observers say. A few years ago the area was desolate as stores closed and companies fled to the suburbs. Today more than 6,000 residents live downtown, and even during the midst of the recession construction is proceeding on three high-rise condo towers within sight of the Culinaria store, opened in August on the ground floor of the Ninth Street Parking Garage structure.

“What really helped jumpstart redevelopment in that area is the Old Post Office building,” says Todd Schnuck. “Our brother Mark [president and CEO of The DESCO Group, the family’s real estate company] was very involved in the redevelopment of that facility. It was owned by the Federal government and then transferred to the state government. It took a literal act of Congress to do that. When it was redeveloped it really created an anchor around that area.”

The Old Post Office is directly across the street from Culinaria. Scott Schnuck says the company looked at three different sites for a downtown store, including the Ballpark Village development, near the new Cardinals Stadium, which has yet to materialize. “Ninth Street Garage is located more in the heart of where the residents are going to be long-term, and close enough to the second market we are trying to appeal to—the daytime office population.”

Culinaria has been a hit with office workers who flood the store for lunch and order deli platters for parties and functions. Culinaria has also been a hit with downtown hotels. “That wasn’t on our radar screen, but it is a nice surprise,” Todd Schnuck says.

“Hotels have been big supporters of us, telling guests about us because of our prices,” says Scott Schnuck. “But honestly price is just part of what is driving our volume. They also like the quick in-and-out and the quality of the food.”

Quality food—and outstanding architecture—is also the hallmark at Schnucks newest flagship store in suburban Des Peres, which opened in mid-September.

“Schnucks’ development team is absolutely wonderful to work with,” raves David Rice, vice president and COO, of St. Louis-based Baero North America, which did the majority of the lighting in the fresh and prepared foods side of the Des Peres store. “They are always looking to use the latest cutting-edge technology to present products in the best possible manner, making it a very inviting and exciting shopping atmosphere for their customers.”

Dining in

With its Fresco and Bistro Grill departments, Des Peres also marks Schnucks return to in-store dining. “We had a lot of restaurants in our stores in the ‘60s, but we moved away from that,” Todd Schnuck says. With its cooking school, restaurants, walk-in temperature-controlled Wine & Cheese Room, Table Top giftware/housewares, contemporary architecture and numerous other amenities, Des Peres has been a hit with shoppers.

Through the years Schnucks has grown internally and through acquisitions. In 1970 it acquired the Bettendorf-Rapp chain, more doubling its store count overnight. That decade it also teamed with Walgreens to open Schnucks/Walgreens stores, St. Louis’ dual-banner version of a supercenter. In 1995 it acquired 57 St. Louis area stores from National Tea. It also bought the Seesels chain in Memphis from Albertsons and in 1998 it entered Rockford, Ill. with its acquisition of Logli Supermarkets.

Acquisitions are always on the company’s radar, but for now Schnuck Markets is focusing on making its existing stores even better.

“We got our hands full right here and right now,” says Scott Schnuck. “We have a great passion for the business and really making our stores the best that they can be.”

Des Peres—Des sweetest plum

With its handmade crusty artisan breads hot out of the oven; Fresco and Bistro Grill restaurant concepts; temperature-controlled walk-in Wine & Cheese Room; 1,900-SKU-and-growing wine department; Schnucks Cooks meal demo and planning station; 13-item shrimp bar; Schnucks Cooks Cooking School; Table Top upscale housewares department and drop-dead-delicious “Killer” brownies it’s easy to see why some people are willing to drive 90 miles to shop at the new Schnuck Markets Des Peres store.

Opened in mid-September in the upscale St. Louis suburb of Des Peres (pronounced da pear) the 75,000- square-foot store, replaced a 46-year-old store a quarter-mile away.

Take the Fresco hot prepared foods counter, for example. There, shoppers can get piping hot pizza made with store-made dough, pasta dishes, fresh seafood entrees, salads, St. Louis’ famous fried ravioli and daily specials. Orders can be placed to go, but many shoppers prefer to dine upstairs in the Mezzanine.

“The Fresco is an experimental concept, but it has really added a lot of personality and uniqueness to the store,” says chairman and CEO Scott Schnuck.

Schnucks’ in-house design team worked with Tampa, Fla.-based api(+) on the store design and materials. The store incorporates 31 green features, including skylights and LED lighting in the freezer cases.

“One of the goals and objectives of this store was to serve as a one-stop shop, but also as a store of destination shops,” says Ross Hutsel, director of facilities engineering.

One of the most popular of those “shops” is the Wine & Cheese Cave. The 335-square-foot room is kept at 50 degrees, explaining the complimentary coats on the racks outside. “Among our many cheeses are Beemster cheeses from Holland, which are featured in our Schnucks Cooks magazine, including their newest Goat Gouda.” says Jane Benigno, deli manager.

Arch support

Sarah Tadlock sits in her ground floor office at 777 Olive St. in the heart of downtown St. Louis watching the shoppers walking by. A couple sport bags from Macy’s (formerly Famous-Barr), downtown’s sole remaining department store, but the vast majority have their arms weighted down with bags from Culinaria, the new upscale urban grocery concept from Schnuck Markets.

For Tadlock, a broker/partner in the Downtown Living Now real estate agency, Culinaria has been a godsend. “That store is very busy,” she says. “It is a big draw and it is helping to attract people to live downtown. Downtown is becoming much more vibrant as a result.”

That’s the idea behind Culinaria, a 21,000 square-foot supermarket housed on the ground floor of the Ninth Street Garage.

“Our downtown area 10 years ago was just a mess,” concedes Schnuck Markets chairman and CEO Scott Schnuck. “There were lots of boarded up buildings and a lot of businesses had moved to the suburbs.” Tax credits have encouraged downtown residential development. “There are now about 6,000 residents living downtown in converted offices, warehouses and lofts. That’s right on the edge of their being enough people to support the store.”

Add another 100,000 or so daily office workers and that support level is easily surpassed.
In an effort to cater to the office market, customers can shop on their lunch hour and the store will hold their purchases for free, storing perishable items in the large walk-in cooler behind the service desk. “You call us when you are going home and we’ll personally walk it out to your car at the curb,” says Nathan Eikermann, co-manager.

The buzz has gotten out about Culinaria and at lunch time the store becomes a beehive of activity as office workers swarm in and place lunch orders at kiosks from Adusa, a Lombard, Ill.-based provider of self-service technology, that give them a number and the estimated time when the order will be completed.

The dining choices are many. There’s the Pizza Bar, that’s also become known for its breakfast pizza in the morning; a self-service in-store bakery; Kaldi’s Coffee, St. Louis’ homegrown version of Starbucks; the same Chef’s Express kitchen prepared foods found in Schnucks suburban stores; a Boar’s Head deli; a custom-made Bistro Salad station and The Grill, featuring steak sandwiches, burgers and the like, which is also offered in the Des Peres store.

“The Grill has been a huge, huge hit,” says Eikermann. “At Bistro Salad we make our dressings and fresh croutons in the store every day.”

Next up is a service meat and seafood counter, featuring Perdue chicken on ice, steaks, chops, burgers and pats of Maitre d’ Butter made from Schnucks butter, shallots, course black pepper and olive oil designed to be placed on a steak the last few minutes of grilling. “We sell much more meat out of the service case than we do the self-serve case,” Eikermann says.

The store contains a full-service pharmacy and HBC department—the first pharmacy department downtown in six years. Even though there are only three grocery aisles, item wise the selection is about the same as in suburban stores, except only the most popular size is offered.

“One thing customers rave about here is that our prices in center store are identical to the Metro stores,” Eikermann says. “You can buy milk here that is the same price as in the suburbs and they are thrilled.”

Culinaria’s exterior wall is made of glass, so the back row of items in that aisle face outward so passersby can see some of what the store offers, and not just the back ingredient panels of boxes. On Sundays the fire exit doors in the middle of the aisle swing open for tailgating parties for the Rams and Cardinals, both of which play at stadiums just blocks away.

“Our whole vision was to incorporate the downtown area with the store; not just to have a grocery store down here, but to have a meeting place down here,” Eikermann says. “We acquired a beer truck from our A-B provider so we sell beer out there along with hot dogs and hamburgers. We are getting huge responses not only from football fans, but people who live down here and come down for a hot dog or brat.”

Wine and liquor are merchandised on the mezzanine, which also contains customer seating. Things get so busy during the 11 a.m. to 2 p.m. lunch rush that three extra tables have to be brought out of the employee break room to accommodate the crowds.

Friday and Saturday nights a band plays at the top of the stairs, attracting a different customer base. “You can hear it throughout the whole store and the customers love it,” Eikermann says. “We have some repeat customers who will come every week, open a bottle of wine and sit and listen. We have a restaurant liquor license so they can enjoy wine with their meals.

“The City of St. Louis is thrilled to have us here,” Eikermann says. “We have really become a destination place. People meet here before going to the Cardinals and Rams games. That is exactly what we wanted. We wanted it to become a destination spot and it is becoming a destination spot. Everyone talks about Culinaria.”

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