Founded in a food desert in Utica, N.Y., Bargain Grocery is a full-blown grocery store operation with attractive produce displays at its core.
This Just In
At store level, Bargain Grocery is innovative in serving customers. Merchandising and marketing emphasize both quality and nutrition, with consideration given to eating trends and the dietary needs of underserved consumers. For example, the store provides nutritional literature for many products. Bargain Grocery uses social media to promote products arriving in the store. Since the grocer works with various suppliers to get product at prices that allow it to serve the Utica food desert’s residents, what’s available at the store can vary. So, Bargain Grocery makes a virtue of necessity, posting Facebook videos of what’s just arrived. These videos are produced and narrated by Rachel Daughtry, who handles marketing for Bargain Grocery but, given her diverse role, has the official title of director of agency relations. The videos often emphasize newly arrived fruits and vegetables just after they’re unloaded, but include other perishable and grocery items as well. Daughtry offers pricing information, highlighting the advantages that Bargain Grocery offers, and availability, letting consumers know the quantities available and whether the store might run through a given item quickly. “People like the treasure-hunt aspect,” Servello observes. Because Bargain Grocery is able to consistently refresh Chobani products, the brand is often featured in the videos as well. In fact, Chobani, which has operations in the upstate New York city of Norwich, is a major Bargain Grocery backer. CEO Peter McGuinness visited the store and was moved enough to provide product for the operation at cost. Because of this, Bargain Grocery is able to support the wider Compassion Coalition effort, which addresses a range of community needs. For example, the charity, with its warehouse near Bargain Grocery, has a section dedicated to distributing free classroom necessities to teachers, but it also provides everyday needs for low-income Utica residents.
From Humble Beginnings
Before it started its food retailing operation in 2002, Compassion Coalition distributed $20 million a year in food, personal care and household items without any ongoing government aid, according to Servello. He came to recognize that a carefully operated lowcost food store could support the larger charitable effort, and the community in general. To get started, he visited the Walmart perishables distribution center and asked whether he could buy its salvage. He then marked it up just enough to sustain the operation, Servello recounts. The original store operated in 1,200 square feet of the Compassion Coalition warehouse before officials took notice and encouraged Servello to expand. That led to his securing funding to open the 13,000-squarefoot Bargain Grocery store in 2018. Recently, Bargain Grocery moved its storage functions out of the Compassion Coalition warehouse, as Servello had negotiated a deal on a 30,000-square-foot warehouse for $725,000. The facility now houses about $2 million in refrigerated and frozen food storage, and will provide centralized receiving and buying, he says. Local and state officials have watched Bargain Grocery forge ahead and are eager to help. Servello is working with officials and other backers to help set up an independent operation based on Bargain Grocery in Troy, N.Y., near the state capital of Albany, with projects in other New York cities such as Syracuse under consideration. As such, the Bargain Grocery model of minimizing food waste, feeding people and supporting charitable initiatives will sustain more communities in the Empire State. PROGRESSIVE GROCER July 2021
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