The Independents

In a suburb of Chicago last week, Grocer Marty Garofalo grossed $25,000 in his bustling, up-to-date supermarket. That was quite a way up from the $200-a-week business he was doing in a neighborhood store four years ago. The difference: Garofalo had become one of the 5,300 members of the Independent Grocers Alliance, a chain of owner-operated stores that, next to the A. & P., is the world's biggest food-retailing organization.

Last week the chain's President Donald Robert Grimes, 47, announced plans to grow much bigger. By 1963, he hopes to have 10,000 store members, doing an annual business of more than $5 billion, compared with a 1952 gross of $2.3 billion* (and A. & P.'s volume for the year ended last Feb. 28 of $3.8 billion). I.G.A. retailers are spending almost $9,000,000 this year on 125 new supermarkets and enlargement of existing stores. Next year, another $10 million will be invested in stores.

Weapon Against Chains. I.G.A. was conceived in 1926 as the answer to the big national chains, which had captured 30% of the retail food market. J. (for Joseph) Frank Grimes, father of I.G.A.'s president and a Chicago accountant who specialized in auditing the books of wholesale grocery firms, had been watching the new chains put independent retailers out of business. Why not, he asked, fight the chains with their own weapons: centralized purchasing and hard-hitting merchandising? He signed up 75 stores to try his plan, and in the first year their volume went up 20%.

When Don Grimes, a graduate of the University of Illinois, who had served an apprenticeship as an A. & P. store manager, joined I.G.A., there were 748 stores. He worked his way through several jobs, became assistant to the president after a three-year Army hitch, president when his father retired last year.

O.S.S. for O.G.G.s. To get in step with the trend towards supermarkets, Don Grimes in 1946 set about making complete food markets of I.G.A. stores. Serving what he calls "one-grocer gals" (i.e. housewives who do all their marketing in one place) required "one-stop stores" and "onesource suppliers." He got half of I.G.A.'s wholesalers to provide uniform-quality meats by ordering directly from packers. He persuaded more than half of them to stock prepackaged fresh fruits and vegetables, started putting out I.G.A. labeled products. Example: two months ago, an I.G.A. wholesaler in Champaign, Ill. made a deal with a local dairy to supply milk with a special I.G.A. label. Such mass purchasing helped I.G.A. stores to cut the price of milk 2-c- a quart to 19-c- and still make a 2-c- profit. Milk sales increased 30%.

Thinking Big. I.G.A. stores, which have expanded into Canada, run all the way from small stores, which may gross as little as $50,000 a year, to the "Foodliner," which grosses an average of $90,000 a week. To the central office, grocers pay $600,000 a year in dues ($5.75 a month per store) and special service fees. In return, they can buy at a low markup (3 1/2% to 4%) from wholesalers, get window posters, market information,and help with anything from store budgeting to personnel problems. Another $650,000 a year is paid to Food Brokers, Inc., which furnishes wholesalers with I.G.A.-brand items (accounting for 10% of store sales).

I.G.A. offers a member so many services, says Grimes, that "all the grocer has to do is unlock the front door and exercise his gifts as a salesman, a likable guy and a square businessman." Says successful Grocer Garofalo: "I've got supervision and store planning and help. I'm a happy man. I'm thinkin' big."

* I.G.A. is biggest in volume among voluntary grocer organizations, second to Red & White Corp. in number of stores (7,200 stores, less than $2 billion gross). Other big voluntary groups: Clover Farm Stores, Inc., United Buyers Corp.

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