By  on March 30, 1994

CHICAGO -- Meijer Inc., which has operated supercenters in the Midwest since before the format had a name, is on an aggressive expansion track that's taking it to 85 stores and a new state.

The $5 billion chain, based in Grand Rapids, Mich., has built a solid following in Michigan and Ohio for the extraordinary breadth of merchandise and competitive prices it has offered since the Fifties, when it was called Meijer's Thrifty Acres.

Eight new stores were opened in 1993, bringing the total to 76. Another nine are planned this year, eight of them staking out new turf in Indiana.

Meijer officials declined to be interviewed for this article, but according to retail analyst Jeff Green, the stores, which average 180,000 to 220,000 square feet in size, generate annual sales of $60 million to $70 million each.

"The secret of their success is food volume," Green explained. "Food generates traffic and an excessive number of shopping trips, and general merchandise, which carries better profit margins, is cross-sold. It's a great strategy that has worked for them."

The chain has a strong price and quality image, Green added, and being open 24 hours a day adds to its convenience.

Stores are laid out with groceries at one end and hardware at the other. Apparel, cosmetics and soft goods occupy the middle area. A line of checkout counters stretches the full length of the front of the store.

While prices are competitive, this is no typical discount operation. Shoppers can accessorize their $10 pull-on polyester and cotton pants with a $100 pair of Ray Ban sunglasses, while buying all their groceries, furnishing their homes and gardens and buying enough sporting goods to equip a health club -- and they can do it under the same roof.

In addition, the mammoth stores don't have pallets of budget-price detergent or spaghetti sauce stacked around the floor but do have garlic breads and tanks of live lobsters on sale for $5.99 a pound. Aisles are spacious, and the entire store is immaculate. Staff members are pleasant and are as prominent outside the store rounding up stray shopping carts in the stadium-size parking lot as they are inside. If assistance isn't immediately visible, there are bells throughout the store with signs inviting customers to ring for service.While the grocery department would give the most upscale food emporium a run for its money, Meijer is a little further behind with its apparel assortments. But analysts say the chain's working to change that.

According to Joyce Harding, a retail consultant with Retail Directions, about 2 1/2 years ago Meijer began realigning its stores to focus more on fashion and branded apparel.

"[Meijer's] saw Target and Kohl's succeed with ready-to-wear and jumped on the bandwagon," Harding said.

Apparel was moved to the front of the stores, close to the cash registers, for greater prominence.

As Harding noted, "Even if you're only there shopping for food, you're walking through ready-to-wear while you're waiting in line."

The stores also installed better fixtures and rack systems to enhance presentation of apparel, Harding said, so the merchandise could tell more of a fashion story.

Apparel is now displayed on fixtures of varied heights, so that different items catch the shopper's eye. Traditional floor racks are reserved for pull-on pants at $9.99 and clearance merchandise.

On a recent visit, one display featured a vintage theme, with groups of coordinated vests, skirts and palazzo pants in similar tiny prints. Another display focused on tops in solids or bold black and white dots or stripes.

Meijer has a clear idea of its customer, Harding said.

"Its fashion business revolves around a casual lifestyle. They're not going after someone working in an office," she said.

Branded sportswear includes Lee, Chic, Palmetto, Gitano, Cherokee, Sasson, Fruit of the Loom and Faded Glory. Lingerie brands include Hanes Her Way, Playtex, Lovable, and Fruit of the Loom.

There are good bargains: a Fruit of the Loom hooded top at $13.97, or Lee women's jeans at $24.99. Clearance merchandise was being advertised at 60 percent off. A special on women's socks offered 10 pairs for $8.99.

While most of the apparel is basic, the stores also carry some more fashion-forward items, such as ramie/cotton hooded vests and matching shorts by No Excuses. Accessories included a trendy selection of ethnic woven backpacks at $12.99.The cosmetics area continues the comprehensive theme. Besides typical mass market brands like Maybelline, Cover Girl and Revlon -- advertised at 20 to 40 percent off -- Meijer carries a broad range of designer fragrances including Gio, Chanel No. 5, Anais Anais, Giorgio of Beverly Hills and White Shoulders.

Value is a key part of Meijer's strategy, analysts said.

According to Frederick Marx, president of Marx Layne, a marketing firm, Meijer's size gives it a lot of negotiating clout with vendors.

"If they don't get the price, they'll pass up the product," he said.

And, while Meijer has been expanding at a rapid pace, it has been hindered by a seemingly disastrous foray last year into warehouse clubs, when it opened and closed seven SourceClub units.

Meijer has said that it realized the warehouse industry wasn't what it was two years ago, having dwindled to two major companies -- Sam's Club and Price/Costco -- so it decided to focus on its full-line stores.

"It was a bold adventure that looked good on paper, but the timing was wrong," Marx said.

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