Part warehouse grocery, part conventional supermarket. That’s what customers will experience at SmartCo Foods, a new chain that opened the first of its five Denver-area stores Tuesday.
SmartCo is pitching an all-things-to-all-shoppers approach that analysts say could prove popular — if the chain can establish its identity in Colorado’s competitive grocery industry.
Parent company Smart & Final of City of Commerce, Calif., acquired five metro-Denver sites formerly occupied by Albertsons. In addition to the newly opened store at 1442 S. Parker Road, outlets in Denver, Centennial, Littleton and Longmont will launch in July and August.
Each store will employ about 110 part- and full-time workers. Store officials said they’ve received more than 4,000 job applications.
Smart & Final has built a reputation in California and other Western states primarily as a warehouse discounter that caters to food-service customers who buy in bulk. SmartCo stores will add a conventional supermarket element with regular-size items, fresh produce, bakeries, meat departments and delis.
Shoppers can buy a 12-ounce package of Kraft American cheese singles for $2.49 or a 3-pound box for $6.99.
“We’re not just a warehouse concept,” said Scott Drew, vice president and general manager of SmartCo. “We have a complete line of regular grocery items. (That will) set us apart from the competition.”
Drew said the chain is able to fit bulk and nonbulk items into conventional-size stores by offering slightly fewer brands or styles than typical supermarkets.
But SmartCo has carefully researched the brands that customers most often buy, he said, in order to carry items that shoppers want most.
SmartCo will be challenged to differentiate itself from competitors in pricing, customer service and quality of meats and produce, said Jim Hertel, managing partner of Barrington, Ill.-based food-retail consultant Willard Bishop Inc.
“It needs to stand out in some important dimension,” Hertel said. “They’re going to have to carve out a difference aside from just the bulk purchasing.”
King Soopers spokesman Trail Daugherty said the grocer is watching SmartCo closely.
“We take all competitors seriously,” he said. “We will certainly monitor them, but we feel confident our customers will continue to shop with us.”
Safeway declined to comment on SmartCo.
Smart & Final president Dave Hirz said the chain will launch SmartCo stores this year in California and Arizona. He said he envisions up to 25 stores in Colorado if the concept proves successful.
“Denver just seems like a great market, a market where there’s been nothing new for a long time,” he said. “It’s clear that people want something new.”
