John Herr's

IGA labeled items, like these toaster pastries, are showing up on the shelves at John Herr's Village Market. The Millersville grocery store is among the local stores that is switching to a new wholesaler. 

Lower prices. Fresher products. Wider selection.

These are some of the improvements coming to a group of family- owned grocers here, as these independent retailers face the fiercest competition they’ve ever seen.

The changes on the store shelves, arriving while chain stores continue to make inroads, are the result of a switch to a new wholesaler to supply the nine-store Family Owned Markets consortium.

The joint marketing group — which includes Oregon Dairy in Manheim Township, Yoder’s Country Market in New Holland, Martin’s Country Market in Ephrata and John Herr’s in Millersville — believes the upgrades will strengthen their appeal.

“I think it helps us because we’ll be able to really focus more on local products and really work better with our communities and the people who shop in our stores,” said Jim Kidwell, director of marketing for Family Owned Markets.

Beginning this month, the stores will get most of their inventory from Merchant’s Distributors Inc., a grocery wholesaler based in Hickory, North Carolina.

The new supplier will allow the stores to launch their own branded bonus card — Family Owned Rewards — which will debut in March.

“We couldn’t do that before,” Kidwell said on Thursday.

The new supplier also comes with a different line of private-label products, a change that the local grocers welcome.

New supplier

While shoppers will get up close and personal with the new products, the force behind those new products will be roughly 500 miles south.

The local stores had been supplied by C& S Wholesale Grocers since 2014, when the New Hampshire-based distributor bought Associated Wholesalers Inc. out of bankruptcy.

As the Family Owned Markets’ five-year contract with C& S wound down, the consortium began looking for a new option. It found a kindred company in the familyowned MDI.

“When you’re with a big wholesaler like C& S, they kind of tie your hands,” Kidwell said. “They expect you to buy certain percentages of your products from them.”

John Yoder, founder and owner of Yoder’s, sees numerous advantages to the change in wholesalers for both store and shopper.

Consumers will see fresher products, since MDI has a busier warehouse that turns over its inventory faster. Consumers will notice more variety, too, since that warehouse is about twice the size of the C& S facility.

In addition, consumers will see lower prices — though it’s too early to quantify the change — and fewer out-of-stock items, as MDI is upgrading its inventory-tracking system in its warehouse.

Beyond the tangible changes, though, Yoder also appreciates the attention that MDI is paying to his business. “They keep asking us what they can do better for us,” he said.

Lower and better

At Martin’s, President Nevin Martin agrees with his Family Owned Markets counterparts: Replacing C& S with MDI makes his store a stronger retailer.

He’s especially enthusiastic about adding MDI’s IGA private label products, saying they’re better known, offer superior quality and come with stronger promotional support than C& S’ Best Yet line does.

Martin, like his fellow store operators, also is looking forward to MDI bringing lower prices and wider selection to Martin’s shelves, among other benefits.

“MDI doesn’t service the major chains,” Martin noted. “They cater to the independent, family-owned business.”

Jim Hensel, perishable foods manager at Oregon Dairy, is excited by how the new wholesaler will benefit shoppers.

“We anticipate having better price points, and we’re very hopeful to have new and different items. We’re pretty happy to have IGA as our private label too. They’re a tried and true private label,” he said.

Hensel believes the switch to MDI will provide his store with the tools to be “more competitive” with its aggressive and growing chain-store rivals.

“We’ve had dramatic changes (in the local supermarket industry),” he said. “It makes it a challenge. Every day’s a challenge.”

Jim Eshleman, owner of John Herr’s Village Market in Millersville, has high expectations for the change as well.

“We feel this is a better wholesaler that’s going to treat us nicer, get us better deals and give us cheaper merchandise we can sell cheaper,” he said.

New members

In addition to having a new wholesaler, Family Owned Markets is starting 2020 with some new members.

Saubel’s Markets, which has stores in Shrewsbury, Stewartstown and East York as well as Whiteford, Maryland, became a part of the marketing group this month.

“It just all seems to fit family owned because that’s what we all are,” said Betti Saubel, who owns the stores with her husband, Greg. “We see they have many of the same values and traditions that we do,” she said.

Crops Fresh Marketplace in Downingtown will be joining in mid- February, becoming the 10th member store.

“We’re like them. We’re a longtime, family-owned operation and we have a lot of history together,” said owner John Cropper.

Cropper feels a connection to the independent stores in Lancaster County.

“It’s a good opportunity for us all to get back together,” he said.

Size matters to Family Owned Markets. It translates into more marketing muscle and more purchasing power. With more stores, Family Owned Markets is better able to stretch its advertising dollars.

“It’s pretty hard for a single store or a couple stores to run television ads, billboards or radio ads. But when you can lump all the advertising and marketing together, it makes it a lot more cost effective,” Kidwell said.

Giant challenges

The changes couldn’t come at a more important time for the independent supermarkets, as they battle to compete with chains that have both bigger stores and marketing budgets.

The county’s $1.49 billion supermarket industry is in a time of unprecedented upheaval, seeing the most turbulence of any county in the mid-Atlantic region, said one expert.

In the past two years, for instance, highly regarded chains Wegmans and Whole Foods arrived, taking large bites of market share.

Giant also is gobbling more sales, by remodeling its existing stores, buying one Darrenkamp’s store, Ferguson & Hassler’s sole store and Musser’s two stores, and opening a home-delivery hub.

At the other end of the spectrum, bare-bones discounter Aldi is adding stores while its main rival, Lidl, has begun excavating work for a new store in East Hempfield Township.

With their businesses under assault from all directions, the independent stores are fighting back.

“These guys needed to do something,” said industry expert Jeff Metzger, publisher of regional weekly Food Trade News. “The last two years were really challenging.”

Kidwell says the local grocers are keenly aware of the threats to their business.

“Giant is trying very actively to get rid of independent retailers — that’s without a doubt their goal, to get rid of all the independents — so they own the market,” he said.

But Kidwell said sales at the remaining independent stores have actually increased since Giant, the market leader by far, bought the Darrenkamp’s, “Fergie’s” and Musser’s stores here.

“There’s consumers that want to shop at a family-owned type of retailer,” he said. “They don’t want to shop at a chain store.”