Fred Meyer Stores Inc. is investing $22 million to convert its four Spokane-Coeurd’Alene area stores into a new nationwide model for its parent company, Cincinnati-based Kroger Co., and Kroger’s family of superstore brands.
The biggest changes will be seen at the Spokane Valley store, near the northeast corner of Sullivan Road and Sprague Avenue, although the East Central, Wandermere, and Coeur d’Alene Fred Meyer stores also are being remodeled as part of the market test, says Melinda Merrill, Portland-based spokeswoman for Fred Meyer.
“This is the beginning of the process of figuring out how we go to market for the next 10, 15, or 20 years,” Merrill says.
Merrill says the test strategy, internally called the Spokane Project, will expand food sections significantly, with some reduction in general merchandise and elimination of a dedicated electronics department.
“We’re adding about 2,000 new items, but not reducing general merchandise by the same amount,” she says.
The stores are open during the remodeling, although Fred Meyer is planning a grand opening event on Oct. 26 for all four stores.
While Fred Meyer wants to continue to target customers who like to do all their shopping once a week, Merrill says, “People who don’t have a big family to feed are looking for options for cool, fun foods, and we want to be one of those options.”
The Spokane Valley Store will feature Cork & Tap, a place where customers will be able to sit down for a glass of beer or wine in front of two large-screen TVs.
Cork & Tap will have 10 craft beers and 16 mostly Northwest wines available at the bar. The bar will serve some food items, such as flatbread pizza for customers to snack on with the beverages, she says.
Cork & Tap will displace the electronics section with an expanded selection of of beer, wine, and spirits, for customers to purchase and take home.
“People don’t buy CDs or movies much in the store,” Merrill asserts. “They don’t even buy televisions anymore.”
The electronic departments in the other Spokane Project stores likely will be replaced with seasonal sections.
Fred Meyer will continue to offer electronic gaming products, cell phones, and certain accessories, such as headphones, although they won’t be stocked in a dedicated electronics department, Merrill says.
The other stores in the project won’t have a Cork & Tap bar, although the Wandermere and East Central stores will serve beer-to-go in growler containers as part of the Spokane Project. The Coeur d’Alene Fred Meyer has been filling growlers for about a year.
The food expansion will include additional shelf space for items people use and buy the most, Merrill says.
“We’re expanding natural and organic selections and some basics such as milk, water, and items … we sometimes have trouble keeping in stock,” she says.
Fred Meyer employs nearly 1,200 people at the four Spokane-area stores. Merrill says the Spokane Project rollout is expected to create 75 to 100 new jobs.
Merrill says Kroger, which acquired Fred Meyer Stores in 1998, hasn’t set a schedule to apply the Spokane Project to other markets.
“We’ll let it go on for a while to figure out what works, what doesn’t, and to work out the kinks,” she says. “We need to become a more digitally savvy company, and this allows us to do that. We have to compete with Amazon and home deliveries, other competitors, and third parties.”
Portland-based Fred Meyer Stores operates more than 130 stores in Washington, Idaho, Oregon, and Alaska.
Kroger Co. operates nearly 2,800 retail food centers in 35 states under a variety of names, including QFC, Dillons Foods Stores, Fry’s Food Stores, Ralphs, and Smith’s.
Merrill says the Spokane Project will include a digital shopping option called Clicklist at the Spokane Valley and Coeur d’Alene stores.
“This is our new program where customers can place their grocery order online and then pick it up at the store,” she says. “You log into your account and all your prior purchases are there, so you don’t have to recreate your shopping list each time.”
Merrill says employees at the Sullivan and Coeur d’Alene stores will have car-side service in which employees will load groceries into vehicles and customers using Clicklist can pay from their car, without having to go into the store.
“It’s particularly useful for parents with kids or the elderly or handicapped, but, of course, it’s a timesaver for all,” Merrill says.
As part of the Spokane Project, Fred Meyer will change its rewards card here into a simpler instant savings system for certain purchases.
“If you have a card, you will get the (discounted) price,” she says. “We will still have fuel points, but not rewards.”
The new system also will focus on digital and social marketing aimed toward individual cardholder buying habits.
“Coupons will be digitally and socially targeted more toward you,” Merrill says. “If you don’t have kids, you won’t get baby coupons.”
Merrill says Kroger’s research affiliate, Cincinnati-based 84.51 Degrees, developed the Spokane Project.
“We’ve done enough research to tell us what might work, and now we’re going to try it in Spokane,” she says.
Merrill says Kroger, which is ranked 17th on the 2016 Fortune 500 list of companies with annual revenue of $109 billion, could have chosen to test the model closer to its headquarters, but opted for a Pacific Northwest test market.
“The Pacific Northwest is robust, and Spokane is a great test market, because it’s contained,” she says.
Merrill says the Spokane Project gives Fred Meyer and Kroger the opportunity to test the new marketing and presentation strategy “in four different stores in different neighborhoods with different demographics.”
Spokane Project-related construction is all within-the-walls remodels, and the store exteriors won’t be altered, she says.
Fred Meyer is spending $10 million on construction at the Spokane Valley store, at 15609 E. Sprague; $3.3 million at the Wandermere store, at 12120 N. Division; $2.4 million at the East Central store, at 400 S. Thor; and $4.1 million at the Coeur d’Alene store, at 560 W. Kathleen, Merrill says.
The simultaneous construction projects have separate contractors and designers.
Deacon Construction, of Portland, is the contractor on the Spokane Valley project, and Portland-based architectural firm Mackenzie designed it.
Vandervert Construction Inc., of Spokane, is the design-build contractor on the Thor project, and Western Construction, of Vancouver, is the design-build contractor on the Wandermere project.
Engineered Structures Inc., of Meridian, Idaho, is the contractor on the Coeur d’Alene project, and Tait & Associates Inc., of Boise, designed it.
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