Genuardi’s Family Markets, Inc.

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Genuardi’s Family Markets, Inc.

301 East Germantown Pike
Norristown, Pennsylvania 19401
U.S.A.
Telephone: (610) 277-6000
Toll Free: (800) 660-2400
Fax: (610) 277-7783
Web site: http://www.Genuardis.com

Private Company
Founded: 1920
Employees: 5,000
Sales: $650 million (1999)
NAIC: 44511 Supermarkets and Other Grocery (Except Convenience) Stores

Genuardi’s Family Markets, Inc. is a family-owned grocery store chain based in the Norristown, Pennsylvania, area. Long a family owned enterprise, Genuardi’s offers a full line of groceries and specializes in prepared foods. Some of the company’s stores feature coffee bars, pizza bars, and sandwich stations, and some stores offer delicacies such as imported pasta, polpettes, and cappuccino cake. Genuardi’s also owns Zagara’s Inc., an upscale grocery store chain in New Jersey. The company was recognized in 1999 as “Family Business of the Year” by the Wharton School of Business and the Pennsylvania Small Business Development Council. More than 7,000 Genuardi employees operate 33 stores in Pennsylvania, New Jersey, and Delaware.

The Huckster Begins a Tradition in the 1920s

Genuardi’s Family Markets, Inc. began when Gaspare Genuardi and his wife Josephine started growing vegetables on their small farm in Norristown, Pennsylvania. Gaspare began selling his home-grown produce to his neighbors out of the back of his horse-drawn wagon. He became known for his high-quality produce, integrity, and loyalty to his customers, who affectionately referred to him as “The Huckster.” While other grocers were cutting back the size of their portions, Gaspare was throwing in an extra head of lettuce now and then to show his appreciation. Gaspare eventually hired several drivers to deliver his produce, first by horse and wagon and later by Model T truck.

Gaspare and Josephine Genuardi had nine children, five of whom became involved in the business at an early age. After opening a string of small stores, their sons—Charlie, Frank, Joe, Tom, and Jim—opened the first Genuardi’s market on Main Street in Jeffersonville in 1954, the first independently owned supermarket in the area.

The first Genuardi’s market was a success and the family quickly set its sights on expansion. The Genuardis used the profits from the first store to open others in the Norristown area during the 1950s. The company was a major family affair; by the 1960s Gaspare’s grandsons also worked in the stores “pushing carts, bagging groceries, and running countless errands” according to the Philadelphia Business Journal

Postwar Expansion

In the 1960s and 1970s Genuardi’s became the largest and most respected grocery-store chain in the Greater Philadelphia area. Genuardi employees were well trained and dedicated. The Genuardis initiated a program known as the “Legacy,” in which current employees and managers mentored new employees and taught them Gaspare Genuardi’s original company philosophies, such as the importance of providing customers with outstanding service. “The Genuardi culture was always there for us and as we moved into management roles, we wanted to maintain that. We do that today by meeting regularly with both our personnel and customers,” recalled Dave Genuardi in the Philadelphia Business Journal

Genuardi’s was also committed to the communities in which its stores were located. In 1976 it established the Community Cash Back Program in which it awarded cash rebates to local nonprofit groups. Under the program, nonprofit groups collected Genuardi’s receipt tapes and exchanged them for cash rebates or credit toward the purchase of computer hardware and software. By 2000 the Community Cash Back Program had awarded more than $20 million to 3,500 nonprofit organizations. Genuardi’s also operated Genuardi’s Children’s Charities, which donated funds to organizations that benefit children.

Change in the 1990s

In the 1990s Genuardi’s was faced with stiff competition from a bevy of supermarket chains as well as indirect competitors such as Kmart, Sam’s Club, and many convenient-store chains. Genuardi’s restructured to better compete with its competitors. It eliminated unprofitable stores and remodeled others. For the first time since the company’s inception, it hired managers from outside the family to oversee its day-to-day operations. The new managers allowed the Genuardis to spend more time interacting with customers, something they considered very important.

Genuardi’s also changed the way it brought customers into its stores. While it had focused heavily on promoting its low prices, in the 1990s the company promoted its restaurant-like atmosphere and its many product line choices. “We want to give customers so many choices that they’ll have no reason to go anywhere else” Roy Taglialatela, director of perishables and merchandising, explained in Supermarket News. Genuardi’s built its new stores in middle- and upper-class family neighborhoods, wherein the average household consisted of dual incomes.

The company expanded it private label brands to include over 900 items under the “Genuardi’s,” “Up Country,” and “Fresh from the Farm” labels. Private-label items ran the gamut from canned and frozen groceries to soda, cereal, and fresh meats. The company maintained that its private label products “equaled or exceeded the quality of national brands, but were offered at substantially lower prices.”

By 1990 the original Genuardi brothers—Charlie, Frank, Joe, Tom, and Jim—had turned the company over to a new generation of Genuardis. The new family members—Larry, Skip, David, Jim Jr., Joe Jr., Tom Jr., Anthony, and Michael Genuardi—were led by Genuardi’s President Charles A. Genuardi, son of Charlie Genuardi. All of the cousins were shareholders who had worked in Genuardi’s markets nearly all of their lives. As of 2000, Charles A. remained president of the company.

In 1997 Genuardi’s launched an interactive Web site that featured an online nutritionist, live cooking classes, and interactive chat sessions. Customers could also order groceries via Genuardi’s Web site. “We entered into this new medium to help us get a better connection with our customers,” said Alan Tempest, Genuardi’s director of marketing, in Supermarket News. He added: “Using the Internet has become a way of life for people. We feel that eventually this will be an extensive medium of commerce and a strong selling tool for us.”

Upscale Focus in the late 1990s

Genuardi’s made customer convenience a top priority in its markets. In 1997 it surveyed its customers and found convenience to be extremely important. “They were adamant about it,” said Roy Taglialatela in Supermarket News. “They said it came near to being an insult to ask them to walk across a huge store to buy milk and eggs.” To make some of their markets more user-friendly, Genuardi’s placed refrigeration units stocked with milk, eggs, and other essentials near checkout lines, so customers needing only essentials could enter and exit the store quickly. The company also created a separate entrance into the fresh-and-prepared foods isle and gave this area its own cash register. It even installed a portable cash register in this area to help keep lines short during the lunch rush. The biggest change, however, was in the amount of prepared foods offered in the markets. Genuardi’s wanted to be more than just a grocery store; it hoped to take business away from the fast-food chains as well. The company quadrupled the space for self-service prepared food and increased the variety of these foods by over 20 percent. Some of Genuardi’s newer markets had coffee cafes with hanging lamps and high-backed wooden stools; these markets were equipped with espresso machines and floor-to-ceiling windows. Genuardi’s offered Italian specialties such as poplette, meat lasagna bolognese, stuffed hot peppers, colorful roasted vegetables, ricotta pie, and cappuccino cake. Imported pasta was available at a pasta station. Employees working at a pizza station could be seen tossing pizza dough in the air. Lunching customers could dine at a sandwich station or select a piece of cooked meat from a carving station.

Genuardi’s prided itself on the freshness of its foods. “While the emphasis here is on prepared foods, produce is a good messenger of ‘fresh’. Whether it’s a deli sandwich or a meal, it’s freshness the customer is buying. And it all comes back to produce,” explained Bill Chidley, the vice-president of Design Forum, a firm that helped Genuardi’s conceptualize its new stores.

Company Perspectives:

“Genuardiness” describes our philosophies, our culture, and the way we do business. Although the word is new, “Genuardiness” began in 1920, when Gaspare and Josephine Genuardi started what is now Genuardi’s Markets. There are basically twelve characteristics that set Genuardi’s apart from other supermarkets. Twelve advantages that, together, create something called “Genuardiness.” It’s these twelve points that keep customers coming back, assuring a strong, successful future for Genuardi’s Family Markets and everyone who works here. (1) Genuardi’s food is better; (2) We’re known for superior freshness; (3) We’re a value-added food store; (4) We’re fashionable, yet not upscale; (5) We offer no-hassle shopping; (6) We deliver satisfaction; (7) Our goal is “Legendary Service” that goes beyond what customers expect; (8) Customers enjoy shopping at Genuardi’s; (9) We offer “Genuardi’s Value”; (10) We’re part of the community; (11) Our “Family Pride Makes the Difference”; (12) We play to win and never forget that we’re in a tough, competitive business.

During this time, in 1997, Genuardi’s made its first major acquisition, purchasing Zagara’s Inc., an upscale grocery chain in New Jersey. Zagara’s was known for its deli, bakery, sea-food, and high-quality meats. The stores also carried a large variety of vitamins, herbs, and nutritional products. Analysts concluded that the Zagara acquisition demonstrated Genuardi’s plans to move into an upscale market. Genuardi’s decided against changing the Zagara name and planned to open additional Zagara markets in 2000.

The Genuardi family said it was impressed with the amount and quality of prepared foods Zagara’s offered its customers. “They do an incredible job at preparing foods, so this gives us an edge over our competitors Acme and Superfresh,” said Larry Genuardi in the Philadelphia Business Journal. “We’re following the trend in society where people are so time-sensitive; it’s driving fast foods and restaurants of all kinds all over the country. With our Zagara’s products people get fresh quality food and they get it very quickly. It’s just another way of reinventing ourselves” explained Larry Genuardi in the Philadelphia Business Journal.

At the Genuardi stores, the company opened its first glatt kosher deli department in 2000, featuring a full line of smoked fish and specialties salads, kosher meats, poultry, lunch meats and breads. The kosher deli was certified kosher by the Organized Kashruth Laboratories (OK Labs). Moreover, believing atmosphere to be very important, the company planned to remodel many of its stores in 2000. Genuardi’s newer stores boasted glass towers with sculptures of fruit and vegetables so large they could be seen from major highways. The company hoped the sculptures would remind customers of Genuardi’s commitment to freshness.

In 2000 Genuardi’s announced its position regarding genetically modified organisms (GMOs), food irradiation, and organic standards, becoming the first grocer in the United States to take a stand on the issue. Specifically, company management decided to make efforts to eliminate irradiated ingredients—food exposed to radiation to kill bacteria—from its product line. The company also stepped up efforts to inform its customers about food content through more thorough labeling. “We believe consumers have the basic right to know relevant information that will affect their personal food choices. We also recognize the significance of individual food preferences, and therefore, we want to guarantee choices for our customers to the best of our ability,” explained Charles Genuardi in a company press release. Genuardi’s had begun selling organic food in the early 1990s. In 1998 Genuardi’s was awarded the “Big O” award by the Organic Trade Association for excellence in promoting organic foods.

As they approached a new century, Genuardi’s markets were known for the integrity, quality, and low prices. The company operated 33 stores in Pennsylvania, New Jersey, and Delaware, and the Genuardi family was still closely involved in the company’s operations. Genuardi’s planned to open five additional stores in the year 2000. Genuardi’s Markets was recognized as Pennsylvania’s “Family Business of the Year” by the Wharton School of Business and the Pennsylvania Small Business Association in 1999, when it also received a “Salute to Excellence” from the Private Label Manufacturers Association for its private brand product line. In 2000 the company received the Purple Aster Award from the Sons of Italy. The Genuardis were proud of their company’s success but also careful not to take it for granted. With the supermarket business being extremely competitive and with the growing popularity of online grocery services, all players in the industry faced challenges. As Larry Genuardi explained in the Philadelphia Business Journal, one of the company’s biggest challenges was in dealing with nine distinct owners—meaning Charles A. Genuardi and his eight cousins. “We’re constantly trying to keep our unity and so far, it’s worked,” said Larry Genuardi, adding “You hear all these horror stories from other large family businesses, where it turns into people looking out for their own personal interest. Here the company comes first, the individual owners don’t. We understand our strengths and weaknesses and the leadership comes from Charles.”

Principal Subsidiaries

Zagara’s Inc.

Principal Competitors

Acme; Super Fresh; Pathmark Stores, Inc.

Key Dates:

1920:: Gaspare Genuardi earns his living selling produce by horse and wagon.
1954:: Gaspare’s sons open the first Genuardi’s market.
1976:: Genuardi’s establishes its Community Cash Back Program.
1997:: Company purchases Zagara’s Inc., and launches its Web site.
1999:: Genuardi’s Family Markets Inc. is named “Family Business of the Year.”