CROWN POINT — With the Strack & Van Til grocery stores back under local ownership, the next step is to rebuild relationships with the community, customers and vendors.
Jeff Strack, president and CEO of the Indiana Grocery Group, spoke Wednesday to attendees of the Morning Business Hour hosted at the First Financial Banking Center in Crown Point. Moving forward he plans to take nothing for granted, he said.
"What my grandfather and Mr. Van Til started means the world to me and I have a lot of pride in that," Strack said. "Every day I wake up I just want to keep working hard."
Strack shared his journey through the bankruptcy process to repurchase the business his family and the Van Tils launched nearly six decades ago. He said there were times during the process when he wondered whether his bid would succeed.
Strack cleared a major hurdle after learning in late July that he and his partners, which formed IGC, had won the rights to 17 Strack & Van Til stores; two Town & Country Market stores, one in Portage and the other in Valparaiso; an Ultra Foods in Merrilville, which now is a Strack & Van Til store; the Strack & Van Til headquarters in Highland and a commissary in Valparaiso.
But he knew there still was more to do. Strack said the period between when he took over leadership of Strack & Van Til in May 2016 and conclusion of the bankruptcy sale, was a rough time for the company.
"Our company was going down a dangerous path," Strack said. "At the time, I don't think anyone realized the damage that had been down by previous leaders but really what happened, the culture of who we were changed."
Strack said over an 18-month period, the company lost 250 people in management roles, from the store level to corporate operations. He said some stores went through eight store managers in less than 18 months.
For Strack, that meant people lost faith in company leadership.
Now the focus is on rebuilding the Strack & Van Til brand and re-establishing the culture of the company created by its founders.
"That's creating a culture of excellence, giving people an excellent customer experience and creating a culture of accountability," Strack said. "We are accountable for providing shoppers with great store conditions and we have to help our people be successful, and that means helping them, coaching them every day so they want to make a difference in our stores."
Restoring employees' faith in management is key, which will resonate in good service provided to customers in stores.
"We have to be accountable to our people," Strack said. "At the end of the day what makes a difference in our stores is our people."
Competitive pricing also will become more apparent. Strack said its new supplier, Associated Wholesale Grocers out of Kansas City, Kansas, will bring a wider variety of products to Strack & Van Til.
He said the company's former private label, Centrella, offered between 750 and 800 items. AWG has nearly 4,000.
"We are going to bring variety back and will be more competitive on pricing," Strack said.
Regarding Ultra Foods, the now shuttered discount store brand, Strack said the strategy worked at a time when there were few discount grocery retailers. When Aldi and Walmart began taking larger shares of that market, Ultra Foods didn't respond quickly enough to react to the changing landscape.
"When Ultra was formed, it was branded as the low-cost price leader but the environment changed, and Ultra needed to be reinvented and we just didn't do it quick enough," Strack said.
Strack said beating discount grocers on price is a fight that can't be won, but that doesn't mean his company can't be competitive.
"Good customer service, value, quality products and clean stores and being locally owned, we have to excel on all of these fronts to balance out the (pricing) equation," he said.
Strack addressed internet giant Amazon.com's purchase of Whole Foods and what that could mean for his industry.
"If brick and mortar stores were going away, I don't think Amazon would have purchased Whole Foods," he said. Whole Foods operates 470 stores across North America and the U.K., which includes 448 in the U.S.
Strack said when it comes to buying groceries, people still want a good store experience.
"People want that instant gratification," he said. "They want to feel, touch and smell products. We can create good (store) experiences; it's what we have to get back to."