Genuardi's

And then there was one. By next month, the nearly century-old story of the Genuardi’s supermarket chain will end just as it began – with a single store in southeastern Pennsylvania. If you’re not familiar with the store, you don’t need to be, in order to appreciate the tale of corporate mismanagement that ultimately led to its much-lamented demise.

First, some background. Genuardi’s traces its roots back to 1920, when Italian immigrant Gaspare Genuardi sold vegetables by horse-drawn wagon, and later by Model T. A decade later, he opened his first corner store, and in 1954, the first Genuardi’s supermarket opened. The store grew to a chain of around 40 locations in Pennsylvania, New Jersey and Delaware, as ownership of the family-owned operation transferred from one Genuardi generation to the next, to the next.

During that time, Genuardi’s earned a reputation as a quality, customer-service oriented, locally-owned alternative to the big players. Even other supermarkets expressed their admiration: “We would rather compete against an average, company-owned chain store than a well-run, independent supermarket like Genuardi’s,” a spokesman for competitor Pathmark told the Philadelphia Inquirer back in 1986. “I certainly would not want to compete against Genuardi’s,” another competitor said. “They really treat their customers right.”

And then Safeway came along.

In 2000, the third generation of Genuardi family owners decided it was time to sell. Conglomerates were taking over other local supermarket chains, and the family determined it wouldn’t be able to thrive as an independent for much longer. “We were contacted,” said Safeway chairman Steven Burd, “and we knew the reputation of Genuardi’s, and we were immediately interested.” For the reported price of around a half billion dollars, the California-based Safeway took over Genuardi’s, in a bid to expand its footprint on the East Coast. “We don’t anticipate any changes in the stores,” outgoing company chairman Charles Genuardi, grandson of Gaspare, said.

But he was wrong. Shortly after Safeway took over, loyal customers started noticing changes – and they didn’t like them. Store layouts were altered, certain brands were dropped, and the quality of the food and customer service seemed to slip. Quiet discontent slowly grew into full-fledged revolt, as once-loyal shoppers abandoned their former hometown favorite in droves. One customer described the changes as “like watching the Titanic sink.” Safeway ultimately responded with an astounding public apology. It ran ads in 2002, admitting that “not all of the changes we’ve made recently have gone smoothly, and we’re sorry if your Genuardi’s experience was affected.” Promising better quality food and the return of some discontinued brands, the ads concluded, “we’d like to invite you back.”

But the Titanic had already hit the iceberg. The damage was done, and neither the ship nor the store could be saved. “What I see is continuous fiddling,” marketing professor Patti Williams told the Philadelphia Business Journal a year after Safeway’s public mea culpa. “I think it is disconcerting to the customer,” she said of the near-constant tweaks to store layouts and offerings, “a continual reminder to the consumer that things are not the way we want them to be.”

“What they bought was a supermarket that was best-in-class,” food marketing professor John Stanton told the Philadelphia Inquirer, “and they were able to make it just good-in-class.”

It’s a familiar story to shoppers who experienced Safeway takeovers of Randall’s and Tom Thumb stores in Texas, and Dominick’s in Chicago. “Acquisitions have never been (Safeway’s) strong suit,” Food World’s Jeff Metzger writes. Safeway made similar tweaks in those stores, suffered similar backlash, and at one time considered cutting their losses and selling. Ultimately, they stuck it out.

Not so with Genuardi’s. The chain never fully recovered, and Safeway finally decided to bail in early 2012. “We’ve probably been approached every year” with requests to sell Genuardi’s, “if not several times a year,” Burd said in February. “For most of those years, we said no. This year, we said yes.” Safeway began selling off the Genuardi’s locations and exiting the Philadelphia region. One by one, stores became Giant Food stores, Weis or McCaffrey’s, or shut down altogether. Two stores in New Jersey that failed to find buyers closed down this past December; the last remaining Garden State store, in Marlton, is set to close next month. That leaves one lonely Genuardi’s in Audubon, Pennsylvania – a mere five miles away from Norristown, where the Genuardi’s story began.

The Audubon store was the subject of an oddly upbeat story recently published in the (Montgomery County, Pennsylvania) Times Herald. “The Audubon store is still going strong,” the story claimed. “We’re here and we’re not going anywhere,” the store’s manager said. “We’re here for the long run,” the district manager echoed.

Truth is, the store is still there only because it’s under a long-term lease. The property owner confirms it’s a 20-year lease, though it wouldn’t say exactly when that lease began, or ends. In keeping the store open, “we are honoring the terms and conditions of our lease in Audubon,” Safeway spokesman Greg Ten Eyck told Coupons in the News. He went on to say that “it’s safe to assume that the lease is the only reason why the store will remain open.” And when the lease expires? “Not many options beyond sold or closed,” he said.

So it’s only a matter of time before the one-store chain becomes nothing but a memory. But for Lisa Lightner of the Pennsylvania-based website SmartSpendingSpot.com, the time for mourning has passed. “We truly lost Genuardi’s several years earlier,” she tells Coupons in the News. “When it was strictly Genuardi’s, we felt like we were shopping at a store our neighbors owned. We didn’t feel that way when it was Safeway.” Her local Genuardi’s is now a Giant, “and it looks the same,” she notes. “Good luck to them, but I’ll just stick to ACME.”

ACME has had its own troubles since it was taken over by Supervalu (read: “Store Closings Bring Sadness – and Shrugs”). Many of those troubles have been documented on the website ACME Style, and site author Jim sympathizes with what’s happened to Genuardi’s as well. “Genuardi’s used to be a high-end store and existed quite peacefully with ACME,” he tells Coupons in the News. But “once Safeway took over, they ditched nearly everything that had made Genuardi’s unique.” He adds that one former Genuardi’s location acquired by Weis features “a sign across the front end that declares Weis a ‘Pennsylvania company’ – a slight jab at Safeway’s troubles managing the locally based chain.”

But not everyone points the finger of blame at Safeway. Some find fault with Genuardi’s for sealing its own fate. Genuardi’s “sold its soul to Safeway,” Philly Magazine contibutor Gene Marks wrote recently. By the time Safeway gave up on it, Genuardi’s had “relinquished its good name and what was left of its reputation.”

Safeway, incidentally, announced yesterday that Steven Burd would be retiring later this year as CEO. So if there’s one small consolation for Genuardi’s, its name – albeit on a single building, and not for very much longer – will outlast the tenure of the man who was minding the store as it slowly faded away.

“When you know in your heart you’ve made the right decision for your customers, you can sleep well,” Charles Genuardi said in 2000, upon announcing his company’s sale to Safeway. “We believe we have a very strong tradition and legacy. But how we sell our company and to whom we sell it is how we are going to be remembered.”

He was right – though, sadly, not at all in the way he expected.

Image source: Genuardis.com


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