Jon Hauptman, senior director of analytics at Inmar Intelligence, Winston-Salem, NC, identifies two areas where Longo Brothers Fruit Market Inc. BB #:154544 Vaughan, ON, might be vulnerable going forward.
One is price.
“Longo’s has the value, but if you’re looking for the lowest price possible, you can find that at [Empire Company Limited BB #:137787 Stellarton, NS, and owner of the Sobey’s retail chain and also] FreshCo or at the dollar stores,” he contends. “Against the nationals, price-image is always a challenge.
“You have to look at how you’ll continue to provide superior quality and freshness while also convincing shoppers they can save money in your stores,” Hauptman explains. “It’s a delicate balance and requires a very focused approach.”
He acknowledges, however, that the grocer has been good at walking this tightrope to date. “Longo’s does a good job of highlighting savings inside the store, managing the price-image issue better than any of its competitors.”
The second potential challenge is location, Hauptman says. “Longo’s has fewer locations than the national chains, even within the GTA.”
Carol Spieckerman, president of Spieckerman Retail in Bentonville, AR, believes the benefits of growth must be weighed against the danger of overexpansion. “It will be tempting to scale up, yet doing so could risk upsetting the balance the company has worked so hard to achieve,” she says.
“Longo’s may not be the biggest player in terms of physical scale, but it has carved out a nice niche,” Spieckerman continues. “One of its strengths, is that despite its growth over the years, it has kept the business at a manageable level rather than over-expanding. It has hit a sweet spot of operating like a family-owned business while maintaining business discipline and fostering innovation.”
Besting the competition
Though Longo’s is no longer a private, family-owned grocer, it remains to be seen how much influence Empire Co., will have on its fundamental business operations. Of course, the region’s crowded grocery retailing landscape is another factor, regardless of its ownership.
“One of the biggest challenges is to try to survive in our very competitive market,” says Mimmo Franzone, director of produce and floral at Longo Brothers. “There probably isn’t a main crossroad in the GTA that doesn’t have a minimum of two grocery stores.”
The key, Franzone believes, is for Longo’s to continue to do what it’s good at. “It’s tough to be everything to everyone, so it’s very important to be laser-focused on your best offerings and serve your customers like they’re family.”
Most in the industry hope this won’t change much even with its new ownership.
“In my view Longo’s is a shining example of decades of generational growth and success within a privately held family business,” says John Russell, president of J.E. Russell Produce Limited BB #:115731 in Toronto. “With the new partnership, I’m sure Empire is very aware of its good fortune and will continue to be part of the amazing story that is Longo’s.”
This is an excerpt from the Toronto & Ontario supplement to the May/June 2021 issue of Produce Blueprints Magazine. Click here to read the whole issue.
