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Tops Seeks to Grow by Going Smaller

By David Robinson

March 1, 2011
 

Tops Markets is starting to think small.

The Amherst-based supermarket chain on Monday took the wraps off the first new store it has opened in the Buffalo Niagara region in eight years.

At 27,000 square feet, the new Tops in a former Jubilee store at 3870 Harlem Road, is half the size of a conventional Tops Market and uses a design that Tops executives believe could help the chain grow in the coming years.

"We think this is going to be a big part of our future," said Frank Curci, Tops' president and chief executive officer. "We think there are more opportunities for stores of this size."

With Tops and Wegmans already well-positioned in the region with full-sized supermarkets, Curci believes the smaller format Tops store could allow the chain to fill in gaps in neighborhoods and markets where a bigger store can't be justified.

"This was a nice little pocket that was underserved," Curci said.

"This community needed a store, but not a 70,000-square-foot store," Curci said of the $3 million renovation project. "As a smaller-format Tops store, this location fits perfectly."

Tops opened its first smaller store this summer, a nearly 40,000-square-foot supermarket in a former IGA store in the Rochester suburb of Spencerport.

"We've learned a heck of a lot," Curci said. "We learned: Don't treat it differently."

Tops executives learned, for instance, that shoppers expected the smaller store to have the same variety of products and specialized departments, from a full-service deli and bakery to a Butcher's Block meat counter, that the bigger stores have. The challenge, Curci said, is to pack all of that into a store that's half the size. "We have some of everything you'll find in a big store. The trick is how do you fit it all in," he said. "We didn't build this to be a convenience store."

Tops, which typically built stores in the 60,000-square-foot to 70,000-square-foot range during the 1980s and 1990s, isn't backing away from full-sized stores. In fact, the company is working on plans to remodel and expand its store on McKinley Parkway and Southwestern Boulevard in Hamburg by about 50 percent.

But the smaller stores give Tops more flexibility to move into smaller segments of the market. "It definitely is a fill-in store for us," said Kevin Darrington, Tops' chief operating officer. "We're more focused on the neighborhood."

Following Tops' acquisition of 55 Penn-Traffic stores, the supermarket chain's portfolio now is split between the bigger Tops stores and the smaller stores it acquired in the deal, which tend to be more in the 30,000-square-foot range.

Darrington said customers at the smaller stores tend to spend about as much on an average visit as shoppers at the bigger supermarkets.

"It's not so much the size of the basket that's different. It's the number of customers who come through the door that's different," Curci said.

Tops plans to spend $40 million to $50 million a year on store upgrades and renovations, with a goal of renovating each of its 134 stores stores every seven years. Darrington said that could include opening two to three new stores a year, and adding gas stations to four or five supermarkets.

The new stores, most likely, won't be in Erie County, where Tops already is well-established. Most likely they will be opened in communities where there are gaps in Tops' coverage from outside the Buffalo Niagara region to Rochester and Syracuse, stretching down into the Southern Tier, Curci said.

Mary Holtz, the Cheektowaga supervisor, said the new Tops is a bright spot for the Kensington-Harlem neighborhood. "This area really, really needed a store," she said. "It just changes the entire neighborhood."

drobinson@buffnews.com null