For entrepreneurs without a strong financial background, the job of capital budgeting can seem overwhelming. Capital budgeting – essentially the process of deciding how to invest excess cash within a company on items that are not regular “operational” items – covers a wide range of activities, and can include everything from purchasing a new piece of equipment to making a substantial investment in capital assets for a new location.
When Jason Sebeslav took ownership of The Peanut Mill Natural Foods Market from his mother Antje Wirth in 2009, things were already in good shape. Established in 1976 by Antje, the St. Catharines, ON store was one of the longest serving and most successful in the Niagara region.
If you were at CHFA East, you were probably hearing a lot of buzz on the show floor about #NHPsAreNotDrugs, our latest campaign in support of the natural health product industry. If you weren’t in attendance, this is a critical issue for our entire industry and we need everyone to help.
La Boîte à Grains, serving the people of Gatineau, QC for 36 years, has opened its third location in the city. The newest store – located in Gatineau’s Le Plateau district – measures 10,500 sq. ft., making it the largest of the three. The second store (opened a few years ago) measures 8,500 sq. ft., while the original store has a 5,000 sq. ft. sales floor, and fully functional 5,000 sq. ft. basement which houses administration, marketing, accounting, prep and online orders.
La Boîte à Grains owner and founder Pierre Menard says it took just over four months (including the two weeks over Christmas holidays) to get the store up and running. “We took over the building September 15. Previously, it was a sporting goods retailer. One of the downsides of taking over an existing retail space is changing it over for your own needs, and that’s what we ran into. We had to go in and tear down their backroom and re-build it to suit our needs. One thing we had to do was build an insulated room to house our rack multi-pack compressor, which was custom-built for us. It holds eight compressors, so that if one fails, the others compensate.”
Besides being bigger than its other two locations, Pierre says the new store also has a stronger focus on health and beauty products and it offers a more elaborate food selection. “While we do offer food in our other locations – sandwiches, soup, wraps, etc. – our new store is set up to prepare and offer full meals-to-go. We want to do more of this in the new store.”
Also new is an exclusive consultation room for the store’s naturopathic staff to have one-on-one sessions. “We want to give more service, more than just consulting in the aisle,” explained Pierre. “The room is for those customers who want to go deeper in improving their health. They can book a meeting with one of our professionals on staff.” •
Rachelle-Béry celebrates its 30th anniversary in 2014. The iconic Montreal retailer is one of the city’s original health food stores, born at the quiet corner where Berri Street meets Rue Rachel in the city’s east end.
Some things have changed over the years. Founder Jacques Vangennoven is no longer the owner, having sold to grocery giant Sobeys in 2005. And it’s no longer a single store: today, there are 10 large format Rachelle-Béry grocery stores and 20 natural health “boutiques” positioned in IGA grocery stores across the province of Quebec.
And yet, according to Rachelle-Béry’s managing director Daniel Dubé, there is one thing that has not changed. “The heart and soul of the store has remained the same since the beginning. The staff may have changed, but the spirit of Rachelle-Béry lives on. They still keep in mind their number one priority: to serve our loyal customers. Through the years, we have implemented new systems, introduced a flyer program, added new categories, but we have always kept in mind our mission: to provide natural and organic products, and always maintain a focus on good customer service. ”
A big reason Rachelle-Béry has been able to continue to operate as an independent health food store has been Sobeys’ “hands-off” approach, says Daniel. “Since the beginning, Sobeys has always managed this specialized business apart from its traditional administration. It has been treated as a special, unique business model. This has enabled us to do our things and develop our own image, our own mission and our own personality.”
Shortly after the purchase, he says, there was a cultural impact. “But with time and good faith, employee and customers saw that we would keep the same mission, the same objectives, carrying the same goods, natural and organic only. And of course, we would still continue to build relationships between our staff and customers.”
The real growth of Rachelle-Béry, Daniel says, began in 2008 with the opening of the first concept store, which now measures 6,000 sq. ft. Previously, the Boulevard Saint-Laurent store in Montréal had 2,000 sq.ft. We were at our next stage: a larger concept store.
“We then tested our new offering, our new image. The majority of people liked it…and we noticed we were starting to attract new customers from the traditional grocery stores. The same year, we bought Aliments Santé Laurier, in Quebec city, another icon. We kept the same name, adding: member of the Rachelle-Béry’s group.
Today, the concept stores come in two sizes: 6,000 sq. ft. and 10,000 sq. ft. “Our past four stores have been just under 10,000 sq. ft. and our flagship in Boucherville is 11,000 sq. ft.” explains Daniel. “In the future, we will base all new stores on either the 6,000 sq. ft. model or the 10,000 sq. ft. version. It will depend which we use based on location and availability.”
The boutique stores – which carry only supplements and natural HABA and no food – measure 1,000 sq. ft.
The Rachelle-Béry in Boucherville on Montreal’s South Shore is the new flagship or concept store. It is 11,000 sq. ft., the larger of the two concept models being used. Daniel says a great deal of research went into the model. “We took our management team to western Canada and the US northwest and we studied the best of the best and implemented what we felt was right for us.”
Rachelle-Béry positions itself as a natural grocery store: food accounts for 70 per cent of floor space (40 per cent grocery, 30 per cent fresh), while the other 30 per cent is primarily supplements and HABA. Half of the customers that come to Rachelle-Bery are new to the health food world. “We have to make them feel comfortable,” explains Daniel, “so we have a huge focus on food. It is something that is common and familiar to them.” The Boucherville store features half its floor space dedicated to fresh food in the form of produce, cheeses, dairy and the Bistro, where you can get everything from a light snack to a full meal. The store is certified organic. “It is a lot of work and it takes a lot of discipline, but it’s worth it. I think it gives us an edge.”
There are some outstanding natural health stores in the Montreal region and other parts of the province. Plus, there is now an abundance of mass, pharmacy and grocery stores selling natural health products. What is Rachelle-Béry doing to stay competitive and ahead of its competition? “We always try to differentiate ourselves from our competitors,” explains Daniel. “We are doing a lot of work in the category of fresh and ready-to-serve products. We are Certified Organic by Ecocert Canada to indicate to customers that all our products made at store level are in fact 100 per cent organic. We try new categories, like tea and spices, in bulk. And…we always maintain a focus on good customer service. We don’t want to be caught in a price war, so we need to differentiate ourselves.”
Committing to customers
Two initiatives to further differentiate Rachelle-Béry from its competitors are its “Going Blue” commitment, and its Organics for Kids Club. “Going Blue – which is about continually improving the range of sustainably harvested fish products we offer – has been great,” offers Daniel. “Our customers are looking to find these types of commitments at store level, and tell us that it is the way to go. Our Organics for Kids Club has also been very well-received by our customers. They love it when we can influence their kids to eat better, and drink better. It then becomes a way of eating better for the entire family.”
Many natural health stores in Canada have had great success using flyers as
a promotional vehicle. Rachelle-Béry is no different, says Daniel. In fact, flyers have been vitally important to the growth of the store. “Flyers are our best form of promotion. We send them every two weeks, mailed to homes in the neighbourhoods where we have stores.” The flyers alternate in size, either four pages (food only), or a six-pager, which carries both food and supplement products.
Daniel says the flyers have been the best source for attracting new customers to Rachelle-Béry. “Many of our new customers shop on price. In the past, when they see the price of organic food, their feeling has often been, ‘Oh, it’s too expensive.’ So, we do offer good prices on our organic produce, so people can compare and hopefully try it. And the new customers we get do have lots of questions, so we have to be trained and ready to answer them.”
Rachelle-Béry has the entire training aspect in hand, says Daniel, thanks in a large part to Academy Rachelle-Béry, the in-house training program implemented in 2013. “All our people from all of our stores are invited to follow training courses on natural health,” offered Daniel. “Once a month, they have a full day of training on a medical system, given by one of our naturopaths. After a year, they receive a certification Rachelle-Béry. We currently have 35 people enrolled in the academy. It’s a place where someone currently working as a cashier can learn and prepare them for another role, perhaps as a supplement consultant or advisor. There are lots of promotion opportunities internally, thanks in large part to the course we offer, which is written by our staff naturopath. It gives people the chance to grow professionally.”
More stores to come
With 30 Rachelle-Béry stores now serving the people of Quebec, look for more to pop up in the near future, both boutiques and grocery stores. “We just opened our newest grocery store on Ste-Catherine Street in downtown Montreal,” said Daniel. “We are looking at opening another later this fall, also in Montreal. Next year, we should open three more stores. We are looking for opportunities in greater Montreal, greater Quebec City, and in the other major areas in the province.” Daniel says the goal is to open three Rachelle-Béry grocery stores and three boutiques each year for the next three years. And there is even talk about franchising the stores, starting later this year or in 2015.
With three store sizes to choose from and two distinct models, Daniel says ultimately it comes down to serving customers in the best way possible. “Being open-minded about what size store to use is all about getting as close to as many customers as possible,” says Daniel. “We would rather open good sized stores near customers, rather than build huge super-sized stores near highways and expect customers to come to us. We want to be as close to as many customers as possible.” • B.W. Cole
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News, Views and Happenings in the world of Canadian Natural Health.