Busch's Fresh Food Market CEO John Busch, pictured inside the store on South Main Street in Ann Arbor, said there are still expansion opportunities in southeast Michigan.
Melanie Maxwell | AnnArbor.com
Competition in the Ann Arbor supermarket scene has exploded since Joe Busch and Charlie Mattis founded the chain of Busch’s Fresh Food Markets in 1975.
AnnArbor.com’s emerging from the recession series
Busch’s — which is headquartered on South Main Street and operates 15 supermarket stores in southeast Michigan — is looking at growth opportunities as the region emerges from the depths of the recession.
Busch’s Fresh Food Market CEO John Busch, who co-owns the chain with his brothers, Doug and Tim, spoke with AnnArbor.com about keeping up with grocery trends, how Busch’s weathered the recession and why the company doesn’t want to leave Michigan. Excerpts:
AnnArbor.com: Busch’s has a long history in the Ann Arbor area. How have you watched the grocery scene change since the company has been here?
Busch: We’ve had two Whole Foods added, a Hiller’s was added, Plum Market was added, Trader Joe’s came into the market, as well as Aldi.
It’s an incredible amount of competition.
AnnArbor.com: What niche do you believe Busch’s is filling and how does the company compete with other grocery stores?
Busch: First off, we’re what the industry calls a conventional supermarket; that is, you can get all your grocery needs in one place. That’s opposed to some of the higher-end, specialty-only stores where you typically have to go somewhere else to balance your shopping.
We carry household items like laundry detergent, pet foods, health and beauty needs and also all the organic produce and organic offerings throughout the store, along with gluten-free items that are becoming much more mainstream. We also offer extensive prepared foods.
AnnArbor.com: What was Busch’s strategy as the local and national economy started to decline?
Busch: In 2008, we opened a store in West Bloomfield, and getting that thing up and running was the primary focus of the organization. But we just quit looking at new stores for a period of time, because those take a lot of resources. The economy wasn’t presenting that many opportunities, particularly as housing growth came to a screaming halt.
You also had to respond to what people wanted. As people became very, very cautious — especially in the early years of the recession — they were often trading down in what they might have purchased previously.
Busch's has corporate offices at its store on South Main Street in Ann Arbor.
File photo | AnnArbor.com
People ate out less, which brought more customers into the business, which offset the fact that people were trading down. People were more conservative about spending habits. That has certainly started to come back in the last year or two, because people are being much more confident and treating themselves. I don’t know if (spending is) ever going to get back to the levels it was previously.”
AnnArbor.com: Can you talk about the sales trajectory at Busch’s and how it was affected by the recession?
Busch: We were quite stable during the entire period. We never had to lay anybody off, and we came through it, I think, just fine. We always were profitable through those years. It was a lot of work, but we came through very well, I believe.
AnnArbor.com: How many workers does Busch’s employ and have you hired since the downturn?
Busch: Absolutely, (we’ve hired). We have roughly 1,400 employees.
Between the two corporate offices (on South Main Street in Ann Arbor and East Michigan Avenue in Saline), there are probably about 75 employees.
AnnArbor.com: How important is renovating and remodeling stores; and how often do you try to do this?
Busch: It’s a perpetual process, and one that we’re very heavily engaged in this year. We just did a project up in Pinckney that changed that location quite a bit. We started a huge project in South Lyon, which is going to dramatically change that store. Our Saline store is also going to undergo a major renovation this year.
In addition to that, we are starting the construction process for our newest location down in Canton. We have our hands busy with construction and remodeling.
It’s about keeping up with all the changes in the industry. There is more and more focus on fresh food, and sometimes you have to reconfigure the store to accommodate those needs.
U.S. grocery industry statistics
The grocery industry remained resilient during the recession, as consumers tightened budgets and slashed restaurant spending
- Number of supermarket employees: 3.4 million
- Total annual supermarket sales: $550-$600 billion
- Number of supermarkets (with $2 million or more in annual sales): 37,053
- Amount consumers spend on food per week (average): $151
- Number of trips per week consumers make to the supermarket (average): 2.2
Busch: Certainly buying local has become a really huge issue, particularly since the recession, which started it. There is a lot more interest in food and where it comes from and how it is made, particularly in Washtenaw County. People care about those things more.
Thirty, 40 years ago, there wasn’t that much concern about it. Every year, I think it’s getting stronger and stronger, and so we do a lot of work to make that shopping easier by labeling products that have been locally made, are organic, or are gluten-free.
AnnArbor.com: Do you change product lines based on customer requests?
Busch: All the time. It’s a perpetual process.
AnnArbor.com: How important are sales, daily deals and loyalty programs for Busch’s?
Busch: It’s certainly important, because it’s important to all of our customers. The industry as a whole is very promotional based. Loyalty cards are a way of life in our industry. We have (the MyWay program). We try to make it one that brings advantages to our guests as well as provides information we can use. Ours is geared around how to make shopping easier. We’ll keep track of your purchases so you can go online and make lists. It’s a way to help create focus and ease for what (customers are) looking to accomplish.
AnnArbor.com: Does Busch’s prefer to build new stores, or renovating existing buildings?
Busch: We have done both. One of the advantages, I think, of being an independent retailer is that we’re more adaptable and have more capacity to reuse existing real estate. Some of the big national chains have a corporate footprint that they want to see, and therefore, if (a building) doesn’t fit the footprint, they won't deal with it.
AnnArbor.com: Busch’s participates in a number of community-related events; can you talk about why that fits the company’s vision?
Busch: Partly, it’s important because that’s how I was raised. Being a family business, we have more traditional values. I grew up in a small town where everybody knew everybody, and that’s just how you lived. Those values that I was raised with are what drive the business today.
AnnArbor.com: What is the company’s expansion plan moving forward?
Busch: I’m expecting we’ll continue to grow. How fast and how quickly will all depend on what opportunities come before us. We don’t have to grow for growth’s sake; we grow selectively as it fits our market and the customers we want to serve.
AnnArbor.com: Would you expand outside of Michigan?
Busch: That’s not likely, just because of the fact that we’re a very family-focused and family-oriented business. I personally go to the stores on a regular basis, and I find that when you get too geographically spread out, it becomes impossible to do that. That’s not really what we’re about.
AnnArbor.com: Is there still expansion opportunity in southeast Michigan?
Busch: Oh, absolutely. There will always be opportunity here, you just have to find the right location and carve out your niche.
Lizzy Alfs is a business reporter for AnnArbor.com. Reach her at 734-623-2584 or email her at lizzyalfs@annarbor.com. Follow her on Twitter at http://twitter.com/lizzyalfs.