Q&A: Stew Leonard Jr. discusses store brand growth during COVID-19

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Q&A: Stew Leonard Jr. discusses store brand growth during COVID-19

By Dan Ochwat - 06/25/2020

The coronavirus pandemic has been driving sales at practically all grocers — and Stew Leonard’s Grocery is no different. With schools closing, restaurants just now beginning to re-open, and shoppers cooking more at home, consumers have been pretty much forced into grocery stores, said Stew Leonard Jr., CEO of the small chain with seven supermarkets in Connecticut, New York and New Jersey.

The stores pride themselves on carrying an abundance of fresh foods and stock an assortment that is more than 60% store brand, Leonard said in an interview with Store Brands, and it’s those store brands that are excelling right now.

Private brands are up about 40% in sales right now, he said by phone. Here’s the full discussion:

Store Brands: How is business going during the pandemic?
Stew Leonard Jr.: It has been very strong. All retailers have noticed that right now. And it continues to stay strong right now. We did see a little bit of softening with the home delivery.

SB: How has the historic spike in food costs been impacting Stew Leonard’s, particularly your private brands?
SL: Everybody has been calling me about the increase in food prices, and you know, we’re real close to the market, we buy directly from the farms and the ranchers, and we have not seen any significant price increases other than your normal market variations due to weather or anything else like that.

Actually, I anticipate food prices going down in July. There’s a little softening in the cheese market and in beef prices. Produce runs its normal cycle. And right now there’s a little bit of supply issues down around Georgia where we get corn, watermelon, some vegetables, but other than that, I don’t see prices going up at all.

SB: What’s new with your private brands, anything trending, coming out for the summer?
SL: One thing we’ve noticed, anything related to the cold or flu — for instance lemon, lime, citrus — are very strong. Turmeric and ginger have been written up as big flu killers. So a lot of immunity-building type foods are doing really well. We’re also seeing a big jump in our organic foods. At Stew Leonard’s, we like to do as many Stew Leonard items as we possibly can. The only real question is can you do it better and at a lower price? We feel like we’re just doing our customers a favor giving them a lower price and better quality.

SB: A trend right now we’re seeing is that private brands are gaining steam during the pandemic because people are buying them when their preferred brands are out, is that what you’re seeing too?
SL: Absolutely. And that’s what we’re hoping will stick after COVID-19. Every retailer I talk to is wondering where all this will settle out post-COVID-19, and I feel it has been a great opportunity for our customers to try some of our brands that they never did.

Even though we can’t do any in-store sampling right now, we look at it as a benefit to our customers that they’re able to taste a lot of our products.

SB: Any broad results you can share as far as how private brands have been doing?
SL: Of course during the frenzy, it was triple and now we’re up about 40% on them. And a lot of the times, it’s forced us to go out and find alternate products. If you were selling a major brand in the store, and all of a sudden you couldn’t get it anymore, because who ever planned for a pandemic like that, so we had to buy alternate items. We even bought a lot of items from the restaurant industry. There’s a 5 lb. bag of French fries that we have in the store for five bucks and we tried that and it’s selling like crazy right now. We’re doing $5,000 a week on these French fries.

It didn’t even have a label on it, came from the restaurant. We put a label on it and it’s selling really, really well.

You’re also seeing people cooking at home more and exploring different recipes and foods. I think people started appreciating what they’re doing at home and dug out a lot of old recipes. We’ve seen a big explosion in baking-related products. We never considered selling yeast at the store but it was a big seller during the pandemic.

SB: Lastly, how has the store been keeping shoppers and staff safe, as this pandemic evolves?
SL: First of all, even with some of the reopening happening, having motivated team members is a key, and we’ve been able to do that. We supply them with masks, gloves, gave them thermometers to take their own temperature, doing the forehead checks when they come into work. We’re doing triple-cleaning at night. First it’s a detergent, then a bleach, then a spray sanitizer. We’ve been saying during the pandemic, the cleanest place you can be is Stew Leonard’s, cleaner than your house, your car, so we want to maintain that.

Stew Leonard Jr. (photo by Steve Hockstein)

We have put up a tremendous amount of Plexiglas barriers. We took our cafeterias and made library-like cubicles there out of the tables so team members can sit together. That’s a very contagious area when you have eating.

But also with our customers, wipes and sanitizers are around every corner. We’re constantly wiping down the stores.

We just need to monitor all of this. Phase One and Phase Two start coming into effect, and people are going to be eating out at restaurants and drinking wine at restaurants. So we’re monitoring this daily. We have a COVID-19 team that meets every morning. You need to pivot and make new decisions every day. For example, there’s a new 14-day quarantine rule in New York, New Jersey and Connecticut, anybody traveling into those states from a hot zone are required to quarantine for 14 days before traveling. We’ve managed through the biggest hot spot in the world, the New York metro area. — at one point we were half the country’s cases — so I feel blessed that we were able to take care of our people and made sure that the customers felt clean.