Food Circus Super Markets, Inc.

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Food Circus Super Markets, Inc.

853 Highway 35
Middletown, New Jersey 07748-4205
U.S.A.
Telephone: (732) 671-2220
Fax: (732) 671-3016
Web site: http://www.foodcircus.com

Private Company
Incorporated: 1955
Employees: 1,400
Sales: $200 million (2006 est.)
NAIC: 445110 Supermarkets and Other Grocery (Except Convenience) Stores

A private company based in Middletown, New Jersey, Food Circus Super Markets, Inc., operates a small chain of ten supermarkets in three counties along the Jersey Shore. All but one of the stores, Foodtown of Wanamassa, operate under the Super Foodtown banner and are in the 70,000-square-foot range in size. In addition to standard grocery departments, the large-format stores offer full-service butcher shops, fresh seafood departments, expansive produce sections, floral departments, extensive bakeries, delis, pharmacies, and catering. Four of the stores also offer online shopping, allowing customers to place orders on a pick-up-only basis.

Because of the chain’s small size, the company lacks the buying power of much larger rivals and is unable to compete on price. Instead, the stores have successfully relied on their local roots—management and employees live and are active in the communities they serve—and on superior customer service to make up the difference. Their local scale makes the stores more nimble than supermarket chains that are controlled from a distance, so they are able to respond quickly to changing tastes and demands. Food Circus is owned and operated by members of the Azzolina and Scaduto families, who are related by marriage.

CHAIN GROWS FROM 1927 SHOP

Food Circus traces its heritage to John Azzolina, born in Italy in 1893. He emigrated to America along with his wife, Angelina, and settled on the Jersey Shore in Highlands, New Jersey, aptly named since it boasted the highest elevation on the entire eastern seaboard. It was primarily a fishing, clamming, and boating community until the 1920s when, as a result of Prohibition, it became a major center for rum running. John and Angelina Azzolina pursued a more respectable livelihood, however. In 1927 they opened a corner ice cream and candy store. It proved so successful that a year later it began carrying meat products and evolved into a small grocery store. It would remain that way until the couple’s son, Joseph Azzolina, steered the business in a new direction.

Born a year before his parents opened their confectionary store, Joe Azzolina grew up working in the grocery and in 1943, following high school graduation, he joined the Navy in the midst of World War II. While serving on a cruiser he kept involved with the business by reading up on the latest developments, in particular the rise of supermarkets, which he came to believe were the wave of the future. When his parents became involved in the grocery trade, customers were waited on and orders were filled by clerks. The self-service concept had been pioneered by Clarence Saunders with his Piggly Wiggly store in 1916, but it wasn’t until the 1930s that other grocers began to make the switch. Since customers were wandering the aisles, the next logical step was to build larger grocery stores, “super” markets, and it was this concept that caught Azzolina’s imagination as he whiled away the time on ship.

In addition to his interest in the grocery business, Azzolina remained involved in the Navy after his initial stint was up, and even considered making the Navy his full-time career. He joined the U.S. Naval Reserve in 1944 and enrolled at Holy Cross College where he earned a degree in naval science in 1946. He then did postgraduate work at New York University Graduate School of Business. When he was not going to school and maintaining his commitment to the reserve, Azzolina was trying to convince his father that a larger store would lead to greater profits. Finally in 1950 he achieved partial success, and the family opened a self service–superette in Highlands called Food Basket. Its 3,600 square feet was a far cry from the Super Foodtowns the family would open a generation later. Nevertheless, Food Basket was Highlands’ most modern store in its day.

Later that year, Joe Azzolina was called back into the Navy because of the Korean War, and his sister, Grace, took his place at the store. Again, the younger Azzolina did not forget the family business while away on duty. He took advantage of his time stationed on the West Coast to visit supermarkets whenever he had a chance, and he became more convinced than ever that the family had to move into the supermarket arena. After he returned home again two years later, he advocated even more strenuously for a family supermarket.

In 1953 Grace married Louis J. Scaduto, a New York City–born Army veteran who joined the Azzolina family business and eventually became chief operating officer. In 1954, her brother took the first important step in realizing his dream, purchasing six undeveloped acres of property in Middletown, New Jersey. Construction on the family’s first large store commenced and in the meantime arrangements were made to join Cooperative Twin County Grocers, the Foodtown trademark was developed, and in 1955 Food Circus Super Markets, Inc., was formed, co-owned by the Azzolina and Scaduto families.

FIRST SUPERMARKET OPENS: 1956

In January 1956 Food Circus opened a 24,000-squarefoot supermarket in Middletown under the Food Circus banner. It was far larger than anything the area had seen to that point. At the entrance stood a large sign, featuring a rotating 30-foot-tall metal clown. Aside from its size, it featured what many people took to be a sinister smile. Hence, to many residents it became known as the “Evil Clown,” and became an area landmark as well as a curiosity. It was used by residents in giving directions and it served as a recognizable local meeting place. In time the wiring shorted out and it no longer turned, but the Evil Clown lost none of his quirky appeal. In 1992 when Food Circus talked about finally taking down the signs, the local community was outraged. Overwhelmed by calls from upset residents and reporters who fanned the flames, the company finally relented and agreed to keep the clown even though by this time there was no supermarket at the site. Instead, the clown advertised a liquor store, thus becoming “The Scary Liquor Clown” to many residents. It was featured in a 1996 independent film, Middletown, and Middletown native and filmmaker Kevin Smith made a short film with the clown for the Tonight Show with Jay Leno and then included it in the opening of his 2006 film, Clerks II.

COMPANY PERSPECTIVES

Food Circus Super Markets, Inc., is a family of people committed to providing friendly service, fresh food and quality products at fair prices, with creative merchandising, and clean innovative stores. Every team member is able to make this promise to customers, family, suppliers, and the community in a fair equitable and ethical manner. As one big team, we are able to achieve the commitment to serving people’s needs for today and tomorrow.

A second supermarket, Food Circus City, about half the size of the Middletown store, opened in West Long Branch in late 1957, and a third followed in Port Monmouth in 1960. Azzolina continued to meet his obligations in the Naval reserves. He became a captain and would later be called back to active service in 1983 for seven months aboard the battleship U.S.S. New Jersey, stationed off the coast of Lebanon, before retiring from the reserves in 1986 after 42 years of service. In the early 1960s he developed another consuming interest, politics, despite his father’s warning that it might cost him some customers. Unconcerned, the younger Azzolina became active in Republican politics and in 1966 was elected as a state assemblyman, serving until 1972, when he became a state senator for two years. During this period, Food Circus opened just two new stores, one in Wanamassa in 1970 and another in Wall Township in 1974. According to Progressive Grocer, Azzolina “dropped out of politics because he felt his company ‘wasn’t growing as fast as it should have. While I was in the legislature, I probably missed some opportunities.’”

Food Circus opened a new store in Red Bank in 1965 and two years later enjoyed a substantial growth spurt when the Finast (First National Stores Inc.) chain decided to exit the market. In 1977 Food Circus bought three Finast stores in Atlantic Highlands, Red Bank, and Sea Girt, and converted them to Foodtowns, opening them in just three weeks. Two years later the company acquired a Grand Union store in Oakhurst, which also became a Foodtown. In 1980, another competitor, Stop & Shop, exited the market, and Food Circus bought four of the stores. The ones in Brick, Woodbridge, and Hazlet became Foodtowns, while the store in Neptune operated under the banner Fresh Farm Super Market.

FIRST SUPER FOODTOWN OPENS: 1984

With a dozen supermarkets in the fold, Food Circus topped the $100 million mark in 1983. The company was ready to become involved in larger format stores. In June 1984 Food Circus opened its first Super Foodtown, which at 70,000 square feet became the largest supermarket in New Jersey. Azzolina, always keeping tabs on the latest developments in supermarkets in both the United States and Europe, combined many of the best features of what he saw in the new Toms Rivers Super Foodtown. It included a 4,000-square-foot produce section, a large fresh fish section, a sausage kitchen to prepare fresh homemade sausage, a kitchen to prepare hot dishes as well as to supply the deli, a European-style indoor sidewalk café, and a book, greeting card, party goods, and office and school supplies section. At the time, Food Circus indicated that if it found suitable locations it would consider opening more of the large format stores, but several years would pass before the company opened additional Super Foodtowns.

Azzolina returned to politics, winning a seat in the state Assembly in 1985. Two years later he narrowly lost a race for state Senate, and then in 1988 decided to once again make a run for elective office, this time as a member of the United States Congress. To his surprise his supermarket chain became a campaign issue. Azzolina was expected to win after his opponent, James Howard, a 12-year House veteran who appeared highly vulnerable, suddenly died. His replacement, 37-year-old Frank Pallone, had a meager record to run on, but he proved crafty. The district’s beaches were closed due to pollution in the summer of 1988, and the Pallone campaign portrayed Azzolina as a polluter, citing one of the Food Circus stores as an example of this conduct because it had an incinerator, although the incinerator was no longer in use. At a debate, Pallone held up a Foodtown plastic bag to dramatize his environmental accusations, although only one store used them and only then at customers’ request. “He ran against my business,” Azzolina told Progressive Grocer, “I ran for Congress.” Azzolina lost by 11,000 votes, but instead of souring on politics, he again ran for state assembly in 1990 and was returned to office, holding his seat until 2006.

KEY DATES

1926:: Azzolina family opens confectionery store in Highlands, New Jersey.
1950:: Family opens superette.
1955:: Food Circus Super Markets, Inc., is formed.
1956:: First supermarket opens in Middletown, New Jersey.
1970:: Fourth supermarket opened in Wanamassa, New Jersey.
1980:: Four Stop & Shop stores acquired and converted to Foodtown concept.
1984:: First Super Foodtown opens.
1995:: Original Middletown store closes.
2006:: Online shopping introduced.

During the 1990s Food Circus became involved in a controversy with consequences that reached further than a political race. In the middle of an afternoon in July 1991, a 79-year-old retired schoolteacher was the victim of a carjacking in the parking lot of the Red Bank Foodtown and was later found dead. Food Circus was sued by the woman’s sister, who alleged that the Red Bank Foodtown did not provide adequate security. The complaint was initially dismissed by the trial judge, who said the store did not have an obligation to provide security because it had had no previous problems. The ruling was affirmed in a split decision at the Appellate Division of Superior Court. The matter was then taken to the New Jersey Supreme Court, where the ruling was reversed in 1997. The court maintained that the focus of Foodtown’s security was limited to shoplifting within the store, but that it had a legal duty to offer some level of security in the parking lot. Although the court left it up to business owners to determine what was a reasonable amount of security, there was no doubt that the ruling was a wake-up call to all retailers.

In 1991 Food Circus opened its first store in several years, a 55,000-square-foot unit located in Bayville on Route 9. It was not the best of times for expansion, however. The country was in the grip of a recession, and unemployment was heavy in the Jersey Shore area because construction on some area retirement communities had been halted. In response to sagging sales, Food Circus cut back on the number of hours the supermarkets were open and trimmed payroll. Nevertheless, it continued to invest in the future by beginning to remodel some of the stores. Work was begun on the Red Bank store, which grew from 27,000 square feet to 50,000 square feet when it reopened as a Super Foodtown in 1992.

Other changes followed in the 1990s. In 1995 the Middletown store was sold and converted to a Spirits Unlimited Super Discount Liquor store, which inherited the famous clown sign. The Port Monmouth Store was relocated in 1998, and a year later the Woodbridge store reopened as a Super Foodtown.

Many more changes were in store for Food Circus in the new century. In 2000 the Atlantic Highland store reopened as a Super Foodtown, and an Adams Supermarket was purchased in Colonia and converted to a Super Foodtown as well. The year also brought a major reorganization to the corporate structure as the Azzolina and Scaduto families took steps to ensure a smooth transition to the next generation, all of whom were in their 30s and 40s and had carved out areas of responsibility without formal titles or job descriptions. While Azzolina remained president, CEO, and chairman, his son, Joseph, Jr., became vice president of strategic planning and development, and another son, John, was named vice president of finance and informational technologies. Louis Scaduto continued on as chief operating office and Azzolina’s sister, Grace, remained the corporation’s secretary and treasurer. Their two children also became vice presidents at the same level as their cousins: Louis Scaduto, Jr., was in charge of operations and merchandising, and Philip Scaduto headed administration and marketing. No line of succession was determined at that time, however. A nonfamily member, Robert MacNeil was also named controller. The need for such planning became apparent in 2004 when Louis Scaduto, Sr., died at the age of 76.

The Food Circus chain of supermarkets continued to evolve in the new century. In 2002 a pair of stores closed after the Bradlees department store chain declared bankruptcy. Bradlees stores served as coanchors with Food Circus supermarkets in Woodbridge and Hazlet, and with the closure of the department store, traffic to the shopping centers was adversely impacted. The Woodbridge store, partially obscured by elevated railroad tracks, was closed. In a much better location, the Hazlet store held on, but the new owner of the shopping center was no longer obligated to the terms of the lease, which still had ten years remaining. Unable to reach an agreement on new terms, Food Circus elected to close this store as well.

In the meantime, Food Circus developed a new large format concept which it put into effect in its Ocean Township store, which was enlarged from 44,000 square feet to 70,000 square feet. The move was also, in part, a response to a massive new Wegmans supermarket, 130,000 square feet in size, scheduled to open in the area. The remodeled store opened in October 2004 and served as the prototype for the next generation of Super Foodtown stores. It would become more difficult to build new stores, however. In addition to increasing costs for energy and medical insurance, supermarket operators had to contend with soaring construction costs, due largely to China’s booming economy consuming massive amounts of the world’s supply of steel and concrete. As a result, it became more advantageous to remodel acquired stores. Food Circus also looked to generate more business from the stores it already owned. In November 2006 some Super Foodtown stores began to offer online shopping. Orders had to total at least $75 and customers had to pick up their orders at the store, which also needed four hours of lead time to prepare the purchases. Although this service was not immediately embraced by traditional grocery consumers, online shopping held promise for reaching a new generation of shoppers, which was important as Food Circus attempted to remain relevant after a halfcentury of operation.

Ed Dinger