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Martin's Landing

Critical first steps in Royal Ahold's takeover of Ukrop's Super Markets will determine its success.

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The goodwill blindsides them. On a warm weekday afternoon in Mechanicsville, three blond Girl Scouts, median age 6, prance around a card table stacked with cookies at the Kroger grocery store on Atlee Road. That's when Allen Graves, a nutrition clerk at the store, offers a check to purchase 100 boxes. The girls, all Daisies, first-year Scouts, are mild and polite, but have difficulty grasping the magnanimity.

There aren't enough cookies to complete the transaction, but a local union representative tells them not to worry. They aren't really here for the Thin Mints, Caramel deLites and peanut butter Do-si-dos. Local 400 is sending a message to the new owners of Ukrop's Super Markets, Netherlands-based Royal Ahold, which promptly banned the Girl Scouts from store sidewalks last month.

The move had less to do with Girl Scouts and more to do with keeping Martin's Food Markets union-free, says Tom McNutt, treasurer and secretary of the Food and Commercial Workers union local in Landover, Md. “That's the way to keep union representatives off the sidewalk,” he says. “If you have a consistently applied nonsolicitation policy then you can prevent any kind of solicitation on private property.”

While Martin's Food Markets begins its transition into Richmond, the Girl Scout fiasco offers a cautionary tale. The initial shock of losing Ukrop's has subsided, but the company's good reputation with customers and the community remains strong. Martin's ability to retain Ukrop's customers largely will determine its success here.

Beginning in April, Ukrop's 24 stores in Richmond will begin turning into Martin's one a time, says Jim Scanlon, regional vice president for the chain, which is part of Ahold's Giant-Carlisle division in Carlisle, Penn. Opening Sundays and selling beer and wine, long off-limits for Ukrop's, aren't the biggest obstacles. Customers and employees accept and understand the necessity to make such changes to compete in a market saturated with national competitors, Scanlon says. “When you actually have a conversation [with Ukrop's customers],” he says, “what they are really concerned about is, ‘We want the food to stay the same, the service and the community service.'” Martin's corporate culture parallels that of Ukrop's, he says, particularly “looking out for customers and associates. … It's a partnership.” Martin's retained all of Ukrop's 3,600 workers at their pay levels, for example, which are higher than average grocery wages.

Ukrop's largely has managed to keep the union off its sidewalks not with prohibitive solicitation policies but by compensating employees, Local 400's McNutt says. “Ukrop's always patterned what they did for their employees off of what Local 400 did for their employees at Food Lion and Safeway,” McNutt says. “Ukrop's understood they needed to keep pace. … They mimic our settlements, and it led to them being some of the best-paid retail workers in the Richmond area.”

Martin's says its sidewalk policy has nothing to do with keeping the union at bay. “We've listened to our customers,” Giant-Carlisle spokeswoman Tracy Pawelski says. “They prefer not to be solicited.” She says the company conducted recent customer surveys and found most preferred not to be solicited by Daisies and other vendors while entering and exiting the stores.

But the policy's not corporate-wide. Other Ahold divisions, including Giant-Landover in Landover, Md., doesn't ban sidewalk solicitation at its stores. The chain has 65 Giant Food stores in Virginia, and all are unionized, McNutt says.

Scanlon, who's overseeing the Martin's Food Markets in Richmond and Williamsburg, says the bad publicity that resulted from turning away the Girl Scouts was simply “unfortunate timing.” An affable, pleasant career grocery man who spent 11 years working at Ukrop's, most recently as vice president of store operations and human resources, Scanlon sees the Girl Scout situation as an opportunity. “What it enables us to do is open the door into what we are doing in the community,” he says.

Realistically, Martin's ability to become a force in Richmond will have less to do with charity and more to do with its ability to sell groceries. To that end, Scanlon says Martin's has a distinct advantage over Ukrop's — its immense buying power, which rivals Kroger's, and allows the chain to lower prices. Martin's also is aggressively pushing its produce, which some saw as a missed opportunity at Ukrop's. Scanlon says the company will continue its relationships with farmers in Southwest Virginia, who supply organic produce to Ukrop's, and is redesigning stores to focus on produce.

“We are going to increase our produce presence,” Scanlon says. The strategy is a smart one — in the past few years, Whole Foods, Trader Joe's and Tom Leonard's Farmers Market, not to mention a half-dozen farmers' markets across the area, have set up shop as more customers seek out organic and locally grown foods.

“There's no question there are more people eating at home because of the recession,” says Tom Leonard, who opened Tom Leonard's Farmers Market six years ago in Short Pump. “I don't really know much about Martin's other than they are coming in behind a major success story. It's kind of like coming in after Peyton Manning.”

Leonard says he doesn't worry much about the competition. When Whole Foods opened a store nearby, he says he called his father, Stew Leonard Sr., in a bit of a panic. His father founded the hugely successful four-store Stew Leonard's chain in Connecticut in 1969, which brings in $400 million a year in sales. 

“He said walk out into the parking lot, turn around and face your building and spend all of your time trying to figure out how to make your store better for your customers. Don't spend a minute worrying about Whole Foods,” Leonard recalls. “And that's exactly what I'm going to do about Martin's.”

Martin's will make a splash in the beginning, but some observers say the chain isn't likely to become a major threat in the Richmond market.

“They are experts at taking a good company and making it smaller,” David Livingston, a Milwaukee-based supermarket consultant, says of Royal Ahold. He gives Martin's five to seven years before it sells out and leaves Richmond. “I think they are going to make too many mistakes and they'll probably implode faster than normal.”

Martin's needs to be careful about alienating customers who grew up on Ukrop's, Livingston says, citing the recent Girl Scout cookie incident as a significant first misstep. “What's important is that they don't alienate the community,” he says. “Every time they do, they might as well put another lock on the door and tell people not to come here.”

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