IGA stores thrive with help from produce supplier
by Tim Linden | March 19, 2009
After close to three decades in the corporate retail environment in a number of different executive positions, Rick Rynke was a bit frustrated and wanted to get closer to his retail roots. So 19 years ago, he and his son, Bob, bought a small retail grocery company and haven't looked back.
"The pressures are a lot different with owning your own business than working for a corporation," Mr. Rynke told The Produce News. "In the first place, with a corporation, you know you are going to get a paycheck every week. Owning your own business, your primary concern is making payroll each week. At the beginning, it was difficult; at one point we got down to $1.80 in the bank account."
But Mr. Rynke, the company's co-founder, current president and retiree-in- waiting, clearly loves what he does.
The retailer goes by the name Oblong Food Center Inc., borrowing the name from one of the four southern Illinois cities where its stores are located. The other three are Robinson, Newton and Greenup. Each of the stores belongs to the Independent Grocers Association, which is perhaps better known by its abbreviation, IGA.
The Robinson store is the company's largest at nearly 40,000 square feet. It is also the largest of the towns the retailer services with 7,000 people, and it is the only one with a competitor - a Wal-Mart Supercenter opened nearby a little more than a year ago. The company's other three stores range in size from 7,500 to 22,000 square feet and operate in one-store towns.
"Running a store in a small town is totally different," he said. "I'll tell you a story. We bought the Greenup store in a bankruptcy sale three or four years ago. We had no intention of buying it, but the price was too cheap. At the time, the store was closed and the 1,800 residents had to drive 21 miles to shop. The town response was overwhelmingly positive. In fact, they made me and my wife the Grand Marshals at their annual parade, which is a big deal here. Here's a small town with 1,800 people and they had 310 entrants in the parade. We went by the reviewing stand and were announced, and the whole town applauded. I've never seen a retailer applauded before."
These types of experiences are what Mr. Rynke thoroughly enjoys about owning a business in a small town. As the local retailer, he is truly part of the community. He buys local produce to support the local farmers and always buys some hogs, pigs and other livestock at the annual county fair.
But surviving and thriving also require good retailing techniques and a strategy. When it comes to produce, Mr. Rynke's strategy making sure quality is number one.
"We go with the variety and quality approach," he said. "I want quality, and my customers want quality. Believe me, the customer remembers the quality of what they bought long after they remember what they paid for it."
Other than the local cantaloupes, watermelons and sweet corn that the Oblong Food Center markets buy directly from the local farmers, the four stores get all their produce from W. Newell & Co., based in Champaign, IL.
"W. Newell is as good a produce supplier as we have ever had," said Mr. Rynke. "They are as concerned as we are about quality and are very responsive to our needs."
The company's top executive said that he has always believed in using a single produce supplier. "If you use two suppliers, it is only because you are trying to get a better price. I don't want my produce people spending their time trying to get a better price. I want them paying attention to the displays at the store and interacting with the customers."
Mr. Rynke said that the biggest advantage a small retailer has is the attention it can pay to the customers to make sure it is meeting their needs.
"I put a box up in the Robinson store asking our customers to put in a slip of paper telling us what they wanted that we didn't carry. We must have gotten 400 slips of paper requesting 400 different things. It took some time and some searching, but we filled those requests."
It is this ear-to-the-ground philosophy that has allowed the four stores to thrive - even in these difficult economic times.
"You have to cut your margins a little, but we're doing pretty good," he said. Mr. Rynke praised Wal-Mart and said that it does a great job of offering low prices and doing what it does better than anybody else. "But we do what we do pretty well ourselves," he added. "That's what Sam Walton said was the key in his book."
When it comes to produce, Mr. Rynke said that what he does well is offer better quality and better variety than his giant competitor. He listens to his customers and gives them what they want. "When I started at Supervalu in 1965, I was a produce specialist. I've always had a fondness for produce. Every once in a while, I'll return to my roots and work for a day in one of the stores' produce departments. It's a great way to hear what the customers want. If you like people, there is no better business in the world than the retail business."
He said that those forays into the back room of the produce department also allow him to get a first-hand look at what he is buying in order to make sure the quality is up to his standards.
"I never ask [my supplier] about price, but I always ask about quality," especially the fruit from Chile [at this time of the year]," he said. "It is going to take a lot of days to get here, so I want them to start out with the best."
Mr. Rynke expects to move more toward retirement soon and turn the firm over to his son and co-partner, who he says already runs day-to-day operations as general manager. He does not expect to expand beyond the current locations. He enjoys the give and take with the customers and believes a retailer loses that as it grows.
Each of the stores is within a half-hour of the main office in Robinson, and he said that there is not another town close enough to allow the retailer to give that special service on which it prides itself for offering.
"If there is a problem, I can be at any store within 30 minutes," he said. "I like that."