DATE: Saturday, October 4, 1997             TAG: 9710040576

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER 

                                            LENGTH:   70 lines

NO-FRILLS GROCER TO OPEN LOCAL STORES

No-frills grocer Save-A-Lot, where customers pack their own bags, plans to enter the local supermarket scene with six to eight stores, including one in Hampton and another likely in Suffolk.

Save-A-Lot doesn't feign to be in the same league as Harris Teeter, Farm Fresh and Hannaford - which offer everything from full-service banks to large bakeries.

Instead, this 655-store chain looks to cut shoppers' grocery bills by sticking to the basics.

Customers quickly will discover that Save-A-Lot stores, at 13,000 to 16,000 square feet, are much smaller than traditional supermarkets. The stores also have more of a ``warehouse'' feel. For example, boxes of canned food and drinks are simply cut open and stacked on shelves.

Save-A-Lot's stores don't carry four brands of flour or three sizes of ketchup. There's usually one of each.

And most of the products are the chain's own labels - apparently a source of amusement within the company.

The snacks, for instance, are under the ``Higgs'' label, named after Save-A-Lot executive Joe Higgs. After an employee's young child began to refer to cola drinks as ``Bubba,'' Save-A-Lot decided to offer its own line of ``Bubba'' cola drinks.

``To create some excitement in the company, we try to do things like that,'' said Steve Harris, vice president of advertising for Save-A-Lot.

With its bare-bones approach to grocery retailing, Save-A-Lot boasts that it can live up to its name. It claims that its prices are up to 40 percent lower than those at the average grocery store.

The company also points to other benefits: Its smaller ``neighborhood'' stores tend to be more convenient for the low- to mid-income shoppers it serves.

``It's definitely a niche marketer,'' said Rita Simmer, a spokeswoman for Minneapolis-based Supervalu Inc., the wholesale food distributor that owns Save-A-Lot.

Save-A-Lot has grown rapidly during the last five years. It had 300 stores in 1992, when Supervalu purchased the chain, and now has 655 locations, Simmer said.

The bulk of Save-A-Lot's stores are licensed rather than corporately owned. Franchisee Henry Nemenz of Ohio will own and operate the Hampton Roads stores.

Nemenz officials could not be reached Friday. But Larry Hecht of Harvey Lindsay Commercial Real Estate in Norfolk said the company has signed a lease for a property in Hampton off Pembroke Avenue.

The franchisee also was considering a site in Suffolk Plaza and several other locations across Hampton Roads.

Hecht said Nemenz eventually wants six to eight stores dotting the region.

Save-A-Lot is one of several grocery chains that have moved into Hampton Roads within the past two years. Hannaford Brothers Co., Harris Teeter Inc. and Winn-Dixie Stores Inc. are continuing to open supermarkets across the region.

Another chain, Norfolk-based Farm Fresh Inc., will likely open more stores under Richfood Holdings Inc., which recently announced plans to purchase the grocer.

Save-A-Lot's stores are known for being run efficiently, said Jeffrey Metzger, publisher of the industry publication Food World in Columbia, Md. He said the company profits by using previously occupied stores, rather than building from scratch, and keeping labor costs low, among others.

But while the stores may be profitable, their sales aren't big enough to have a significant impact on the Hampton Roads market, he said. Still, the chain doesn't need to be a giant to be successful in its own niche, he said.

``This is not market-driven; it's profit-driven,'' he said. ILLUSTRATION: Color photo

Sav-A-Lot says its smaller, neighborhood stores are more convenient

for low- to mid-income shoppers.

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