Meijer – A Midwest Giant

While its strength is in America’s Midwest, Meijer is a major player in the fiercely competitive home centre market. Bob Vereen reports…

Hardware and home centre retailers throughout America’s Midwestern region face stiff competition. No only do they compete with home centre giants such as Home Depot, Lowes and Menards and supercentres operated by Kmart and Wal*Mart, but they must also contend with the 200 supercentres operated by Meijer, the pioneer supercentre in the United States.

Each Meijer store has two entrances – one for the grocery end, the other for general merchandise

The Michigan-based giant, which continues expanding at the rate of 8-10 stores a year, opened America’s first supercentre in 1961, after beginning as a grocery store in Grand Rapids, Michigan, in 1934. What makes Meijer a player in the hardware marketplace is its heavy commitment to hardgoods in its stores, compared to the skimpy assortments to be found in Kmart and Target. Meijer’s assortment of tools, hardware, plumbing, and electrical goods is comparable to that of Wal*Mart’s supercentres and would satisfy the basic needs of most consumers. Where hardware stores would surpass Meijer’s assortments is in small fix-it items – important for consumers, but not volume-builders for the average independent retailer.

In front of each checkout are impulse and seasonal displays – in this winter scene, snow shovels

Another factor that makes Meijer a formidable competitor, is its policy of being open around the clock, 364 days a year. The only day it is not open is Christmas Day. And by blending a large grocery department – accounting for one-third of sales – with clothing, pharmacy, and other items as well as hardgoods, it means that store traffic is constantly high, so its hardlines inventory is exposed to a lot of walk-by traffic. Long hours, high traffic, and competitive prices apparently assure Meijer of satisfactory business in hardgoods.

Paint mixing facilities are offered, though staffers are not ‘on duty’ in the department

Surprisingly, however, the extensive hardgoods departments are seldom staffed with qualified people, so most sales are entirely self-serve. It seems particularly odd that even its color-matching paint department – with an end-of-aisle, high traffic location – is not staffed regularly. While the company does not staff the department as one might think it should, it does advertise its product range regularly in its weekly circulars. Such advertising promotes the full range of departments – tools, hardware, electrical, plumbing, paints and decorating products. In season, an abundance of advertising plus an extensive outside sales areas give prominence to lawn and garden lines. This department is always manned in season.

Aisle signs and gondola end caps identify the dominant hardgoods categories

Headquartered in Grand Rapids, Michigan, Meijer Inc. is family owned and operated. Although it is family owned, Meijer is one of the largest privately held retail companies in the nation. Fortune magazine recently estimated its volume at more than $12 billion – which would mean approximately a $60 million annual volume per store. The company currently operates stores in Michigan, Ohio, Illinois, Kentucky and Indiana – in 130 different cities and towns. In larger metro areas, it operates multiple stores. Today, Meijer stores range in size from 110,000 square feet to 250,000 square feet and carry over 150,000 different items. In addition to national brands, Meijer has developed as many as 200,000 private label products including fashion, hardgoods and grocery items. The company operates four distribution centres of its own, but is also supplied by some wholesalers, in addition to buying direct from manufacturers. Operating such large stores means it must be located in or near heavily populated areas. It picks out prime suburban locations, easily accessible by highways, so its customer draw is from a range of ten to fifteen miles. And due to its extensive food departments, it can locate in mid-size cities, not just major metro areas. As Wal*Mart increases its own count of supercentres by the hundreds each year, and becomes an increasingly strong competitor to Meijer in the Midwest, Meijer is taking aggressive steps to compete. It is currently remodelling its stores, and the transformation is most impressive. The refurbishment provides a distinct difference from Wal*Mart and Super Kmarts, and makes it competitive, or even superior, to the upgraded look of Super Targets.

The high gondolas have been lowered, which creates the impression of wider aisles. An improved inventory control system enables the stores to reduce inventory (permitting lower fixtures) while still meeting consumer needs. Stores have been repainted with more white walls, and soft blues and other pastels, as accent colors. In the apparel departments, especially, in the “new look” stores, these giant stores look more like department stores than mass merchants. Additionally, signage is less garish and cluttered, which further improves the stylish look of the remodelling. It clearly establishes a “difference” between these huge stores and those of its three major national competitors.

Vertical signs identify categories in the hardware, tools, plumbing, and electrical departments of Meijer stores

Readers interested in learning more about this successful retailer, which is able to compete with America’s largest chains, can learn more about the store, its management philosophy, its products, and marketing by going to: www.meijer.com

In addition to providing quality products at a low price, Meijer plays an active role within the community. With more than 450 employees per store, Meijer works very hard to promote community activities and to assist non-profit organizations through corporate and store donations. Meijer has created strong relationships and volunteer programs to join forces with such organizations as Habitat for Humanity, Junior Achievement, American Red Cross, Children’s Miracle Network, March of Dimes, and the American Cancer Society. Being active in the communities it serves, is all about being a good neighbour.

Bob Vereen, Hardware Journal’s US Correspondent.