Associated Food Stores: Thousands of miles fresher.

• Author: Stewart, Heather
• Position: Company Profile

In 1999, after nearly 60 years in business, Associated Food Stores took a big leap into a new business venture: owning and operating local grocery stores.

Associated Food Stores was founded in 1940 by independent retailers who banded together to transport and warehouse merchandise for their grocery stores. "Back in those days, grocers were having to drive their pickups to California every week to get products," says Steve Reich of Associated Food Stores.

Those grocers first purchased a big truck to share, then invested in a warehouse. The cooperative model worked amazingly well, helping to keep local grocers in business as larger chain stores moved into the region. Now, the Salt Lake-based Associated Food Stores supplies nearly 600 independent retailers in an eight-state area.

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And, according to Reich, 60 percent of the market is now made up of independent grocers--a market share that has actually strengthened over time.

Even so, operating a successful, independent grocery store is a constant challenge.

"In 1999, some of our store owners decided they were ready to get out of the business, but they didn't want their stores to fall into the hands of chains," says Reich. The owners of Maceys and Lin's grocery stores and Associated Food Stores came up with a plan: Associated would purchase the stores and continue operating them under their same name and business model.

Associated soon purchased Dan's Foods and Dick's Market stores as well, for a grand total of 22 grocery store locations. The company created a subsidiary, Associated Retail Stores, to oversee and manage the new retail operations.

The four store "brands" are operated as unique businesses in order to adhere to the original intentions of their founders, says Reich, who is the vice president of marketing for Associated Retail Stores. This approach may seem inefficient, but Reich says that grouping them all together with one look and feel--and identical product offerings--would alienate the loyal customers who have supported each store for many years.

Associated...