Small grocers battle to stay alive in Sacramento area

Today the company has eight swank stores and a national reputation as an innovator offering everything from custom-ground sausage to store-made pasta and pizza. Fortune has ranked Nugget among the "100 Best Companies to Work For" the past three years.

"Independents are more nimble when it comes to new ideas," said Food King owner Valen Lee, who noted that his family's Galt store nearly 40 years ago was the first to offer Chinese takeout. "Ethnically diverse foods, gourmet groceries, sushi – those all began with independents. The chains just have more money to make it flashy."

The next chain coming to Sacramento, Fresh & Easy, is poised to make things tougher for independents. Its British-based parent company, Tesco PLC, is spending about $2 billion to open at least 200 stores in California and the Southwest. Last month it announced plans for at least 19 stores in the greater Sacramento area.

Like many independents, Fresh & Easy stores are small – about one-fifth the size of a regular 50,000-square-foot supermarket. They sport a bare-bones decor – some items sell from wood pallets, Costco-style. And they stock fewer items – about 3,400 compared with a traditional supermarket's 30,000 or more.

The company's strategy could leech off some independents' customers, said Eugene Fram, professor of marketing at the Rochester Institute of Technology in New York.

"They're going after time-pressed consumers who resent having to walk 200 feet from their car in the parking lot just get to the front door," Fram said. "That's always been a strength of the independents – smaller stores with easy access, shorter lines, quick in and quick out."

As the competition grows, some independents will fall. The survivors will know their customers intimately, connect with community organizations and events and offer top-notch service, said Kevin Stirtz, a customer loyalty consultant based in Burnsville, Minn.

"We know independents will never be able to offer the huge inventory, low prices and many other conveniences the big boxes and chains offer," Stirtz said. "They shouldn't even try to compete."

Are independents going to disappear?

"No," Stirtz said. "Local grocery stores are a part of Americana. They sit side-by-side with baseball, apple pie and station wagons."

And there will always be shoppers, like Rio Linda resident Stan Warmuth, who swear by them.

"I don't like change too much," the 67-year-old military retiree said as he recently left Bing's with eggs and a box of cereal. "And fancy stores just say, 'higher prices' to me."

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