By catering to University of Wisconsin students, Fresh Madison Market scores an easy A.
By Richard Turcsik
In most of America mid-August signals the dog days of summer. But at Fresh Madison Market it’s the most wonderful time of the year.
“I’ve been told that our busiest week of the year will be move-in week, which is the third week of August,” says Jeff Maurer, the owner and general manager of the 19,000 square-foot upstart independent in downtown Madison, Wis. that caters to University of Wisconsin-Madison college community. “In the supermarket industry that is pretty unusual.”
Come to think of it, lots of things about Fresh Madison Market are unusual. The produce department shrinks during the summer and expands in the winter; sushi outsells beer and wine; chicken far outsells beef; energy drinks comprise 20% of the soft drink selling area; Saturday is the slowest shopping day; and over 1,100 customers follow the store on Facebook and Twitter [See sidebar, Page 26], to name a few.
“Our business is very seasonal and just the opposite of a lot of stores,” Maurer explains. “The week between Christmas and New Year’s will be a very quiet week for us. Easter week is the slowest week of the year because of spring break and all of the government holidays. Given that, we’re anticipating a 40% sales drop during the summer.”
Fresh Madison Market opened Jan. 9 on the ground floor of Lucky Apartments, a 12-story apartment high-rise on University Avenue in the heart of the massive University of Wisconsin campus and less than a mile from the state Capitol Dome. Come December, the building will also house UW’s admissions department, ensuring a steady stream of students and staffers.
“We opened up intentionally one week before the students came back from their Christmas break,” Maurer says. “It gave us a week to try and get our staff ready and prepared—we were not. We failed miserably. We were not prepared for the onslaught and the amount of business that we did.”
Traffic just went up from there. “From the first week to the second week our business more than tripled. It was overwhelming,” Maurer says. “It is really a big learning curve, especially given that none of us had ever worked in a downtown market before. I’ve always worked in suburban or rural markets and working downtown is totally different than anything I had ever imagined. I’ve learned a tremendous amount about the business in the six months that we’ve been opened.”
Rising through the years
A 35-year industry veteran, Maurer started out as a bag boy at Minneapolis-based Byerly’s, and spent the bulk of his career there, rising up the ranks to become director of operations. After that chain was sold to Lunds, he left and was eventually recruited by Pierce’s Markets, a five-store Madison area chain. He exited Pierce’s in December 2008 and started working on Fresh Madison Market in January 2009 when he was approached by the real estate broker handling leasing for Lucky Apartments, after talks with Pierce’s and Roundy’s, which operates the local Copps chain, fell through.
Maurer decided to go ahead with the store after talking to his three recent college-graduate daughters. “They thought it was a really good idea to be on a large campus like this and bring food more conveniently to the students and faculty that live and work here,” he says.
Fresh Madison Market has a built-in audience of some 25,000 students, about 80% of whom don’t have cars. Plus there are tens of thousands more office workers in the nearby Wisconsin state and Dane County government offices. Prior to Fresh Madison‘s opening students would have to shop at downtown’s other independent, the tiny Cap Centre Market, or trek three miles up the busy University Avenue to the Hilldale area, where Whole Foods, Copps and Metcalfe’s Market are located.
Although the university still offers meal plans, times have changed. Gone are the days of cramped dorms where house mothers would sniff out illegal hot pots; today most UW-Madison students live in private on-campus apartments, complete with kitchens. “What has really surprised me is the amount of cooking that the students want to do to eat healthy,” Maurer says.
Diversity in taste
Fresh Madison has already had to tailor its product assortment to meet unexpected student needs. “We have a lot of East Coast influence here,” Maurer says. “A lot of East Coast students are above us, and that is why our store has been somewhat of a challenge because we have such diversity in taste.”
Maurer also miscalculated when it came to UW-Madison’s Jewish students. “There are 8,000 Jewish students on campus and I missed that demographic when we first opened,” he says. “We get a lot of requests for kosher foods, so we try to work hard to get that base of business up again.”
Now shoppers entering the store are greeted with a wooden nesting table filled with kosher apple fritters and doughnuts from a local Jewish bakery.
The store is decorated in pleasing earth tones, with a mural created by a UW art student camouflaging each support pillar and drainage pipe. Noticeably absent is the use of red and white, the UW school colors, which Maurer intentionally eschewed. “I didn’t want to use the university’s logo or colors,” he says. “Even now I still get comments from people saying, ‘I’m not a student. Can I shop here?’ They think either the school or Lucky Apartments owns it.”
First floor: Sushi
Shoppers can enter either through the front door, placing them in produce, or through elevator from the underground parking garage—Maurer calls it Madison’s best-kept secret—placing them in front of the sushi counter, run for Maurer by AFC Sushi, based in Rancho Dominguez, Calif.
“I had not anticipated the elevator becoming a second entrance for us,” Maurer says. “The first thing the customer sees when they get off it is the sushi bar. I think that is one of the reasons our sushi business is so good.” Sushi accounts for 5% of total store sales, more than bakery and beer/wine combined. “The difference in the numbers between sushi and beer and wine was very shocking to me,” Maurer admits. “And my gross margin on sushi is far greater than beer and wine because of the competition.”
But with the majority of shoppers hoofing it, produce, which runs along the front window, is the first thing most see. “Until we opened, most students had to rely on friends with cars to take them to supermarkets, or they bought convenience foods from CVS or Walgreens, which isn’t the healthiest,” Maurer says. “The availability of fresh produce on campus was really hard to find. That has been our biggest draw, and we do tremendous volume on produce. It’s not only a profitable department, but I feel we are providing a service,” he says, pointing to table that’s home to a BLT display of lettuce, tomatoes, Hellmann’s mayonnaise and hometown Oscar Mayer pre-cooked bacon.
Because of its limited backroom space, Fresh Madison receives produce deliveries six times a week from suppliers Nash Finch and Indianapolis Fruit.
The majority of the second floor over the store is vacant, with the landlord hoping to land an upscale restaurant. But there’s also a mall-style food court, beauty school, and Fresh Madison’s mechanical room, deli freezer and cooler and the deli kitchen and bakery. That frees up valuable first-floor selling space.
The deli, bakery, sushi and service and self-serve seafood and meat departments are housed in a unique octagonal layout custom made by Structural Concepts of Detroit and assembled on-site. “What’s really cool is because the deli kitchen is upstairs, we can bring this department out more centered,” Maurer says, “so literally almost every customer has to walk around it at some point.”
In the bakery case, cupcakes are the best-sellers. “We make our cupcakes and cakes from scratch and sell a lot of them!” Maurer says. “They’re only two bucks and they are calorie controlled. Our best hours for cupcakes are from 10 p.m. to midnight. That’s when they get the munchies; especially when they were studying for finals the cupcakes were very popular.”
Other popular late-night sellers include pints of ice cream, popcorn, hummus and energy drinks. “Energy drinks are big on campus and are at least 20% of our soft drink floor space,” Maurer notes. “They have a high dollar ring too. The price of a four-pack of Red Bull is $10.”
In the service and self-service meat and seafood cases, just about everything is “value-added.” There’s Parmesan and coconut-crusted tilapia, beef and chicken kabobs, mushroom/Swiss and bacon/cheddar patties, chicken Cordon Bleu, Parmesan-coated chicken breast, Northlander brats and Stoddard’s cooked brats.
“We used to have steaks, but now you’ll see more of the value-added,” Maurer says. “You won’t see roasts. We opened up with them and learned very quickly that it wasn’t working.”
With the exception the self-serve meat case and a couple of produce cases, all of the frozen and refrigerated cases are doored units from Milwaukee-based Zero Zone. Singage tells consumers how much energy the doors are saving. “These cooler doors are not as convenient as an open case, so we try to educate the customer with this signage,” Maurer says. “My utility costs are 30% below budget. Granted these units are more expensive. I spent around $100,000 more than on a traditional case, but it is a very quick ROI.”
In part because its selling floor is substantially smaller than most supermarkets, Maurer elected to segregate health and natural foods from conventional grocery. “We’re the only store in the area that segregates,” he says. “I like it from a customer standpoint. If you are a gluten-free person you just have to come to one aisle.”
General merchandise and non-food items are merchandised from slat racks placed on the store’s numerous pillars. “I never worked with slat boards before and typically grocery stores don’t have them, but because of the size of our columns we really try to maximize our space,” Maurer says.
“It’s one reason our item count is so high, and it helps with variety. We had requests for housewares and kitchen items when we first opened. I discovered we had this big column sitting here empty, so we were able to add them.”
A limited assortment of over-the-counter pain medications and a rather extensive offering of condoms are available towards the front of the store. The selection is limited because of a lease clause imposed by Walgreens, which also has an outlet in the Lucky.
In the rear corner of the store, a refrigerated case is devoted to local beers, including New Glarus, Capital Brewery and Leinenkugel’s. It is followed by a walk-in cooler. In another surprising twist—given that Madison is a college town—department sales aren’t meeting expectations.
“Frankly, if I needed additional space right now I’d probably take out my beer and wine department,” Maurer admits.
“It’s a very small part of our business, and to me not a very important part of our business. If need be, I think that space could be dedicated to more food offerings.”