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Rethinking the box

Not just a place to grab bread and bananas, the newest Quality Foods is a community hub complete with a café, patios, conference rooms and even a pub

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A group of thirty-somethings sit casually shooting the breeze on oversized leather couches while drinking local craft beer and B.C. wine. Nearby, a trio of students, fuelled by Starbucks coffee, are deep in animated conversation. On the other side of the room, a man sits at a high table leafing through a newspaper while sipping on a pint of beer. It’s a typical Saturday afternoon pub scene. What’s not so typical is the location of this pub—a grocery store
on Vancouver Island.

Aptly called “Upstairs,” the pub occupies part of a 10,000-sq.-ft. space above the grocery store and is roomy, comfortable and decked out with upscale, modern furnishings, soft lighting, a few big-screen TVs and a large fireplace. It’s a new concept from Quality Foods and the showpiece of the chain’s newest location, which opened in Nanaimo last September.

The concept is also part of the folks at Quality Foods’ larger strategy to create a social hub in the community. “You need more reasons for people to come into the store,” explains Noel Hayward, Quality Foods’ president and CEO and one of the founders of the 13-store chain that has been a fixture on Vancouver Island since 1982. “It can’t just be aisles of products; it can’t be a box with just groceries customers can get anywhere. With sales growth at about the rate of inflation, we have to figure out ways to create value, create an experience so customers will come to us instead of the big box.”

Pulling off the Upstairs pub was not without its challenges; it wasn’t even part of the plan for the store originally. In fact, construction was already underway when the call was made to halt building at the site. “We always wanted to do something like this,” says vice-president and CFO Justin Schley as he gives a tour of the space, adding, “So we decided, why not do it now?” The concept was put together before they even knew if they could get a liquor license. “We took a lot of risk,” admits Schley, who adds that the Jim Pattison Group, which acquired the company in 2017, was very supportive of the plan.

qualityfoods-5017-tgoehringThe risk appears to have paid off. On this afternoon the lounge is doing a steady business with a dozen or so patrons chilling out in the space. Promotions like Football Sundays and Wing Wednesdays have proven popular ways to draw customers to the pub. “We’ll continue to program as time goes on,” says Schley (whose dad, Ken, is also one of chain’s founders), adding, “We’ve already booked three private functions up here.”

When asked how they went about creating the space, Schley said the goal was that it wouldn’t look like something you’d find in a grocery store. “It had to have a feel that was totally different so you almost get lost up here.”

For inspiration, the team went on a tour of Vancouver’s craft brew pubs with a stop at Starbucks Reserve, the coffee chain’s high-end format. And just as the wine and craft beer on offer is local, the Quality Foods’ team also reached out to local firm CA Design, from nearby Qualicum Beach, to design the space.

The need to stand out from the crowd is crucial anywhere these days, and no less so in the competitive Nanaimo market. All of the big players have set up shop in the fast-growing city, just across the Strait of Georgia from Vancouver. That said, many of the big boxes (Walmart, Costco, Real Canadian Superstore) have opened at the North end of the city; Quality Foods is betting its decision to invest in a location further south in the city’s up-and-coming Harewood neighbourhood will pay off.

Quality Foods has two other stores in Nanaimo and previously operated a smaller location just up the road from the new site. Hayward says there was excitement in the community when the Harewood store opened. “There hadn’t been a new store in the area for years,” he says, adding there also wasn’t a place in the neighbourhood for people to grab a drink—not since the local Harewood Arms Pub shuttered back in 2014. “People feel comfortable coming here and having a drink.”

qualityfoods-5183-tgoehringWhile the pub is the most striking aspect of the new Quality Foods, it’s certainly not the only impressive thing about the store. It has all the typical departments (bakery, oral, a robust produce department, sushi bar, etc.) as well as unique features such as two outdoor patios, the A Step Above gift shop where housewares and higher-end kitchen gear are available for purchase, and two conference rooms that community groups can use free of charge. Downstairs, the 40,000-sq.-ft. space is home to Perk Ave. Café, which offers meals through the day and has become a popular breakfast spot for locals. In fact, this year Hayward says Quality Foods expects to serve up more than 200,000 breakfasts at the eight locations that have a Perk Ave. Café.

A commercial smoker in the deli (for the store’s rib program), as well as a pizza oven also confirm the store’s credentials as a grocerant. And the focus on providing in-store experiences is evident in the store’s investment in a full-service “Butcher Shop,” which Hayward says is inspired by the old-style meat shops popping up all over the country. “The butchers have a relationship with the shopper,” says Hayward. “If you’re just selling packaged meat in the case, Walmart and Costco will sell it cheaper.”

The team at Quality Foods has never shied away from trying new things. Back in 1991, it launched the Q-Card, the first electronic loyalty card in the country. A few years later, it started selling groceries online and it was developing mobile shopping apps much earlier than most.

Justin Schley and Noel Hayward.

Justin Schley and Noel Hayward.

But firm believers in the notion that complacency kills, the Quality Foods team has undertaken an ambitious revamp of its app, which about 50,000 of its customers currently have on their phones. Over the last year-and-a-half they have been upgrading the app to make it faster and enable the delivery of
personalized offers. The goal is to provide value to customers and help grow sales, says Hayward.

“You can walk through the produce department and you might see bananas and they’re 89 cents a pound; well, you’re a good customer [the app has identified you as such]—we’ll send you a personalized offer and you’ll get your bananas for 49 cents a pound this week,” explains Hayward, who adds that the team drew inspiration and the idea of rewarding your best customers from U.K. grocer Tesco.

The new app, which is currently being tested by Quality Foods’ employees and will launch in April, also incorporates My Daily Special: a hugely popular feature at the store where, for years, customers with Q-Cards have been able to get a discount or “special” on a product of their choosing by scanning the product at a special kiosk in-store. The new app will also include something called AD Watch, where customers can create a list of products within the app and if any of these items comes on special, the customer will receive a notification.

“We’re really excited about this and hope it’s best in class,” says Hayward. “It’s all the things the big guys are doing, but that’s what it takes nowadays. You’ve got to stay ahead.”

Photography by Tanya Goehring

This article appeared in Canadian Grocer’s March/April 2019 issue.

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