Where your money goes the farthest but still stays home

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Article Excerpt from Progressive Grocer Magazine

There's no fancy sushi department at Chanatry's French Road Market in Utica, N.Y., but that hasn't stopped owner Bill Chanatry from learning a little Japanese. "At Chanatry's we practice kaizen," he says. "Kaizen derives from Japanese and means 'continuous improvement.' 'Kai' means 'change' and 'zen' means 'good or make better.'"

It's a philosophy that has served Chanatry's well. A Utica institution since 1912, Chanatry's recently completed a 10,000-square-foot addition, boosting the store size to 50,000 square feet and allowing for the expansion of key departments, including deli, prepared foods, ethnic and organic dry groceries, and health and beauty care.

With its new wider aisles, shopping at Chanatry's is so much fun that it's literally like a walk in the park. In an unprecedented instance of cooperation between the city and the store, the addition was built on land that had been part of the Wankel Field park next door.


"The land was actually just a grassy field, and not a playing field, but it was a quid pro quo," Chanatry says. "The city needed parking for the park, and we needed the land. They gave me the land, and we provided a big hunk of our lot for parking. We paved the lot to their specs, and we gave them an easement over by the railroad tracks. The city was extremely easy to work with, and it works out well because the park is busy during the day when the store is not."

Judging from the crowds in the store at 11:00 a.m. on a Thursday, come nightfall Chanatry's must be an absolute madhouse. Sales are up--way up--some 30 percent to $500,000 a week, or $10 per square foot, since PROGRESSIVE GROCER last profiled Chanatry's in February 2000 (see sidebar on page 59). While any sales increase of that size is impressive, it's even more remarkable given the area's current economic condition and cutthroat competition.

While Utica, the county seat of Oneida County, boasts a picturesque downtown filled with exquisite architecture, broad traffic-free boulevards, numerous parks, good schools, excellent hospitals, low crime rates, and, as an extra bonus, Thursday night beer fests at the Mart Brewery and free Monday night concerts downtown, the city continues to bleed jobs and population.

According to Spectra, during the past three years the population in a three-mile radius of the store dropped 9 percent to 58,177. Unemployment in the area edged up to 4.8 percent in June from 4.7 percent in May; as 1,200 manufacturing jobs evaporated. Jobs were growing in the service and retail sectors, but now even service-sector jobs are beginning to move overseas, with ACS Education Services taking 120 jobs to Jamaica.

In an effort to turn things around, attract industry, and spur development, Utica has adopted the slogan "Enjoy the good life." It appears on billboards downtown and just about every street sign throughout the city. Unfortunately, a Wal-Mart supercenter took the bait and last September opened one of its 180,000-square-foot behemoths on Commercial Drive in neighboring New Hartford, on the same strip as P&C Foods, Price Chopper, Hannaford, Big Kmart, and Target, and well within Chanatry's drawing distance.

A second Wal-Mart supercenter is planned a mere three miles away in North Utica, where an existing traditional Wal-Mart is about to undergo a transformation.

But Chanatry isn't fazed. "What we need to do is stay on our toes," he says. "Wal-Mart has several vulnerabilities. They are not going to touch us on service. I don't care what they say. They are not going to touch us on the quality of our produce or anything of that nature. They just ain't."

In fact, it's Wal-Mart that has taken a few pages from Chanatry's notebook. Wal-Mart started carrying jars of marinated artichokes after it saw what a good job Chanatry's did with them. Artichokes sell so well that Chanatry's carries three brands: Progresso and the local Cora and Flora brands.

Chanatry's has long promoted local products on its shelves and in its circulars. Now in the Wal-Mart freezer case, a bright-blue shelf talker starburst in front of Byrne Dairy ice cream from Syracuse screams, "Local Item!" Chanatry's uses similar tactics on its shelves and in its circular, but the difference is that at Chanatry's the interest in local business not only seems genuine, it actually is.

"We sell honey from Owens Farm," says Michael E. Gallagher, general manager. "It's a local farm in New Hartford that we do business with, and it outsells everything else in this set." Other local products proudly featured at Chanatry's include Terrell's and Jean's brands of potato chips from Syracuse, Adirondack soda from Scotia, and Dino's sausage and Cora Italian foods from Utica.

"Where we can we promote that our products are local," Chanatry says, "including our local produce and beer."

That would be Saranac and Utica Club from Matt Brewing Co. When Chanatry's advertises Matt's Premium or Utica Club for $7.88 a case, the circular touts: "Hometown Special;" "Made in Utica, N.Y.;" and "Support the Locals." "What that does is get the people who are working for a living up here to say, 'I have to support Chanatry's because he supports the local brewer, cheese guy, farmer, etc.,'" says Robert Kelly, director of trade & community relations at The Matt Brewing Co. Build it high

As a result, thousands of cases fly out the door. Depending on the week, Chanatry's is often Matt's largest customer, and no lower than its third. That's no small feat, considering Matt is the nation's 12th largest brewery.

"Chanatry's manages to give extraordinary specials--good price breaks," Kelly says. "They build it high, stack it high, and let it fly. They're not afraid to put out a 400- or 500-case display, and that just knocks people dead."

On entering Chanatry's the first thing a shopper will notice is the huge display in the vestibule of the store. For Memorial Day, floor to ceiling might be stacked with six-pack bottles of Saranac beer. In midsummer it's a Pepsi display packed with hundreds of two-liter bottles and 20-ounce multi-packs. "With this display we've been selling down half to three-quarters of it dally," Gallagher says. "On the 20-ounce we've probably already sold three 18 wheelers of it--that's 66 skids of product in a month."

Other hot specials drawing shoppers include chicken leg quarters at 38 cents a pound, or $14 for a 40-pound box; Beech-Nut ground coffee, buy one 10.5-ounce can for $1.99 and get two free; and Terrell's potato chips, buy one 5.5-ounce bag at $1.49 and get two free. The ads are designed by Mark Chanatry, v.p. and Bill's son.

"On Sunday Chanatry's runs a double truck ad in the Utica Observer-Dispatch, and a lot of people will take a look at that before they look at the editorials because he always has something to lure you into the store," Kelly says.

Once they pass the vestibule display, customers head into the produce department. Chanatry's offers a fine assortment of produce, with a heavy emphasis on locally grown product. Bins and tables are piled high with local strawberries, peaches, corn, peas, lettuce, cabbage, onions, and a local specialty, salt potatoes. Packaged in a five-pound bag, salt potatoes are 4.25 pounds of B-size No. 2 potatoes and .75 pounds of salt. Upstate residents boil the potatoes with the skins on in salt water until they're tender, drain them, and pour on the melted butter. They're so popular that Chanatry's sells two brands, Hinerwadel's of North Syracuse, the inventor of the delicacy, and G&P Fresh Pack.

Opposite produce is a Wail of Values, which was moved from its former home along the front wall. "This is our power aisle, and we find it draws more people than when we had it in the corner," Chanatry says.

Many shoppers comment that they like Chanatry's because it's easy to shop. Part of that appeal is due to its design. Over at the Wal-Mart supercenter, garish fluorescent lighting suspended from warehouse ceilings gives some shoppers headaches. At Chanatry's the mood is more subdued. Low-rise drop ceilings cover most of the store, including the new section. Over in the original middle section of the store, the ceiling reverts to a bowling alley dome over the service meat case and frozen food aisles, but the store is still not imposing. Buying offices are above the meat case, and Chanatry is known to open his sliding glass window and shout out greetings to shoppers below.

"No matter where you are in this store, you're not going to be overwhelmed by high loft ceilings," Chanatry says. "If you're in produce, it feels like you're in a small produce store. If you're in the meat department, it feels like you're in a small butcher shop, even with...