Firsthand Insights From Raley’s
Keith Knopf, a 25-year veteran retailer with senior leadership roles at Kohl’s, Victoria Secret and Macy’s, is Raley’s president & CEO.
And it just so happened that three new store openings in California were scheduled pre-pandemic. Two of the stores, the Bel Air banner in Rancho Murieta and the Raley’s in Land Park, opened on May 20 and April 15, respectively—during the turmoil of Covid-19. A new format Raley’s O-N-E Market opened June 27.
Every store opening adds a lot of pressure to a supermarket chain, but during these times the pressure was even more intense—certainly because of the CDC and state and local restrictions. But for Knopf there was even a more intense pressure: There wasn’t a full-line grocery store in Rancho Murieta. Raley’s prides itself on serving and helping to build its communities and has done so since 1935.
Social distancing and queuing people outside, metering how many people could enter, shields, masks, sanitation standards wiping down surfaces every 30 minutes or less, team members in the store making sure standards were followed, cart washing, temp check team members, social distance at all intersection points including point of sale with decals on the floor, foodservice had operations shut down (self-serve); their Café on the mezzanine was closed and is still limited.
The Raley’s in Land Park was even under more pressure because the newly built store was right next to their old location, one of the company’s highest volume stores. Right about the time Covid-19 was spreading, that store was nearly finished and starting to be stocked.
Raley’s was operating the old store (which is now closed and has become a dark store servicing delivery orders only) and the new one concurrently and some of the challenges were to incorporate the sanitization and safety measures in both the old and new stores. Typically supermarkets would open a new store and shut the old store. But because of the pandemic, Kopf says, they didn’t want to put needed inventory behind a closed door. Raley’s, a purpose-driven, community-centric organization, approached the situation from the needs of the community.
They had inventory, Kopf told me, and people had needs. “So we made a unique decision to keep both stores open and deep discount the old store for 7 days to sell the inventory instead of pulling it off shelves and redirecting it. We did that because we wanted the inventory to be available to people.”
It might have been more profitable not to do it this way, Knopf points out, but they wanted to meet the community’s needs and Raley’s “could serve them and in the long run, that would be smart and generous for us to do.”
And then there was the grand openings, usually a big deal for both the store and the brands they carry. Knopf said they had to think this differently—without the fanfare—but once things get back to normal he expects to have terrific grand reopening events. He said their suppliers understood, but for him, under these circumstances, he thought it more important to get the stores open, get people to work, than it was to postpone the store openings and have a big celebration so they could have a moment in the sun.
On the online side, Raley’s e-commerce amplified 3-4X before Covid-19 and that has exploded. According to Knopf, they hired 2,000 people in 10 days to support the demand. Ninety percent is on Raley’s proprietary platform and 10% on Instacart. He expects eventually for e-commerce to be 6%-10% of the business, or about 2-3 times of where it was pre-COVID.
When I asked him what has he learned from these Covid-19 openings that could help navigate future disasters, he said, “We validated that our organization is resilient and agile. Despite ambiguity and uncertainty, we can move forward. People need to see that resiliency and hope and stability. It gives us confidence that our purpose driven mission and vision and our confidence in our team members and customers is well placed. We, as a company, and as an economy, we will get through it. And I think that’s what we reaffirmed over these last 100 days. The other thing we learned is to act quickly and be deliberate. And always prioritize the team member and the customer safety experience ahead of profit or any other objectives.”