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Inserra Supermarkets

 


Address:
20 Ridge Road
Mahwah, New Jersey 07430
U.S.A.

Telephone: (201) 529-5900
Fax: (201) 529-1189


Statistics:
Private Company
Incorporated: 1961
Employees: 2,300
Sales: $492 million (1997)
SICs: 5411 Grocery Stores


Company History:

Inserra Supermarkets operates approximately two dozen grocery stores, licensed under the ShopRite name, in New Jersey and New York state. Although it consistently ranks among the 500 largest private companies in the United States, Inserra seldom makes headlines outside of its home area. Nor does it possess a site on the World Wide Web--despite the 1990s trend that led almost all businesses (and many others) to end up with a homepage--and it has no public relations campaign of any note. Thus, the company remains somewhat of a mystery to the outside world. It is apparently a family-owned business--Lawrence R. Inserra is its chairman and chief executive officer (CEO)--and a very successful one at that.

ShopRite and the Growth of Supermarkets

Aspects of Inserra's history can be inferred from a close look at that of the supermarket industry in general, and of the ShopRite network in particular. The concept of a grocery store grew out of specialty stores--such as butcher shops or bakeries--which when combined with the notion of a general store, yielded early grocery chains such as Kroger, founded in 1883. In the period that included the Great Depression, World War II, and the postwar economic boom of the 1950s, grocery stores became a widespread phenomenon in the United States.

During the 1960s, supermarkets--stores which sold at least $2 million a year, and which featured a wide range of products including non-food items--began to make their appearance. The decade also saw the growth of large chains, which helped to bring about the end of many a "mom-and-pop" grocery--that is, an old-fashioned, family-run type business.

Inserra is, according to the public statements of its executives, such a business. It came into being in 1961, during the early part of the supermarket era. But it adopted a strategy common to many independent grocery stores--that of joining a grocery association, which is a network of typically independent stores which operate under the same namesake. IGA is a good example of a well-known grocery association. From the beginning, Inserra was affiliated with Newark, New Jersey-based ShopRite.

ShopRite came into being in 1946, when a Del Monte Foods representative encouraged several Newark grocers to form a cooperative. The seven grocers each invested $1,000, and on December 5, 1946, they created Wakefern Food Corporation. "Wakefern" was an acronym formed from several of the founders' last names, but in 1951 the members of the cooperative agreed to use the name "ShopRite" on their stores.

Despite the change in store names, the cooperative remained the Wakefern Food Corporation. By 1998, it included forty-three member companies, and had become the largest retailer-owned cooperative in the United States, as well as the largest employer in the state of New Jersey. Spread throughout that state, as well as New York, Connecticut, Pennsylvania, and Delaware, were some 190 ShopRite stores. Most of these were family owned.

Inserra Becomes One of New Jersey's Largest Private Companies

As a member of Wakefern Food Corporation, Inserra Supermarkets had the advantages of belonging to a cooperative, which helped the small Inserra enterprise grow. According to ShopRite's corporate information, a cooperative "buys, warehouses and transports produce while providing other support services to ensure customer satisfaction." Wakefern had 2.5 million square feet of warehouse space in Elizabeth, New Jersey, and operated one of the largest private transportation fleets on the East Coast, with some 400 tractors and 2,000 trailers, which travelled more than 23 million miles in 1997. Thus, Inserra could rely on its "big brother" in the grocery industry to take care of the areas that the smaller company was not as well-equipped to do on its own. "'Volume' buying," ShopRite declared, "enables ShopRite stores to offer their consumers the lowest overall prices, and the greatest value, in the marketplace."

With the cooperative handling wholesale purchases and distribution, Inserra was free to grow, and grow it did. In a November 1992 piece about the seventeen New Jersey corporations that had made the Forbes list of the 400 largest private companies for that year, the Record led its story with a report on Inserra. Its purchase of a supermarket in Wayne, New Jersey in 1990 had, the newspaper noted, "helped bolster Inserra Supermarkets to the top shelf of private companies." The chain's sales, which reached $463 million in 1991, were "increasing steadily," according to company president Lawrence Inserra.

In January 1995, Supermarket News reported that Inserra--which at the time had thirteen stores in New Jersey and five in New York state--purchased five more from Singer Supermarkets, a North Bergen, New Jersey-based ShopRite licensee. At the end of that year, Forbes reported that Inserra, with approximately $500 million in annual sales, was the 388th largest privately owned corporation in the United States. Surprisingly, rather than bask in the glory of a job well-done, Inserra kept to its traditional practice of going about business and avoiding the limelight or subsequent media blitz.

But growth slackened in the mid- to late 1990s. By 1997, Forbes reported Inserra Supermarkets' sales volume as $492 million, and ranked it 444th, down from its 1996 ranking at 407th place. Forbes reported that Inserra owned seven supermarkets and sixteen superstores, all operated under the ShopRite name. The Inserra family maintained control of the company, with Lawrence R. Inserra acting as the chairman and CEO, and Teresa Inserra the company's treasurer.

An Expanded Array of Services

As grocery stores changed in the 1990s, so did the range of Inserra's services. Laura McCafferty of Wakefern Food Corporation told the Record in February 1995, "Probably the biggest change is that the size of our stores has gotten larger." This was in part because of what the paper called "lifestyle changes,"--specifically, the fact that more women were working, and fewer spent their days at home maintaining the household. Thus, available time for the family grocery shopping trip was slim, and stores began to carry a more diverse product line so people could get everything they needed in one stop. Also, in response to the success of large wholesalers such as Sam's Clubs and CostCo, ShopRite had begun offering "supersize" packages of such items as paper towels and toilet tissue.

Another change in grocery store operations, and one reflected at Inserra Supermarkets, was the addition of other profit centers under the store roof. The inclusion of facilities such as photo developing centers, coffee shops, banks, and video stores helped to increase profits, and made the supermarket even more of a one-stop store servicing a variety of needs. In October 1995, the Hudson Valley Business Journal reported that Poughkeepsie Savings Bank had signed an agreement with Inserra whereby it would place full-service banking centers in three Rockland County, New York Inserra ShopRite stores. The first would open in December at the Spring Valley ShopRite, to be followed with 1996 openings in West Hayerstraw and New City. "In-store banking," Lawrence Inserra told the Journal, "will provide our customers with a new array of products and services."

Supermarkets in general, and Inserra in particular, were not merely expanding their non-food offerings in the 1990s. A number of changes in the marketplace likewise dictated new developments at the core of the grocery business: food. Large grocery stores had begun to chip away at the market segments of restaurants, stand-alone delicatessens, specialty food shops, and farmers markets. Hence in December 1995, Supermarket News reported that Inserra was "rolling out a program for hearth-baked, crusty breads after successfully testing the concept in two of its units."

According to the company's bakery supervisor, Vinny Lottito, the "breads have taken off slowly, but we knew that would be the case. Now our customers are beginning to accept them." The new line of store-made breads would include walnut raisin, sourdough, rustic, farmer's rye sourdough, mill bread, forrest hill bread, jalapeno pepper-cheddar cheese bread, black forest, sun-dried tomato and black olive baguettine, whole wheat pan au levain, knusperele baguettine and muesli bread. Despite their success in some areas, however, these breads--which were partly-baked by outsourced bakers and finished in-store--would not appear at every Inserra facility: "The breads require the right demographics to sell well, because the prices could be limiting in some areas, [Lottito] said."

Inserra Supermarkets was also becoming involved in an even more ambitious food-service program: catering. "For both [grocery stores] and their customers," Mina Williams wrote in Supermarket News in October 1996, "the meaning of catering is broadening to include instances of what used to be just plain eating." Ron Hirt, Inserra's director of appetizing, told her, "We are in the catering business 365 days a year. Catering is no longer spring weddings and Christmas parties. Our customers are seeking more prepared-food items that can be picked up and reheated in the home for a variety of occasions, even in-home entertaining." Inserra Supermarkets' expanding line of catered foods, Williams wrote, included "chicken cordon bleu, chicken stuffed with wild rice or broccoli ... whole rotisserie chickens and chicken parts ... [which] complement the Buffalo-style chicken wings, fried chicken, ribs, macaroni and cheese, lasagna, stuffed shells and ziti as a standard part of the deli department's party options."

A number of Inserra stores had begun accepting custom orders for catered food, and were "aggressively using turkey and ham dinners in a box to capture more deli sales." Inserra's delis were also offering a greater variety of food platters, with smoked fish, shrimp, and sushi added to the traditional meat, cheese, vegetable, and fruit platters. "We are going about capturing catering dollars that are going to small delis and small caterers," Hirt told Williams. Inserra's approach was, as Williams noted, a "holistic" one. Hence she was told by Hirt, "We try not to treat each department as an island, but ... as one. Our customers work with the appetizing-department manager to place their order across all departments, whether it is meat, seafood, appetizing, bakery or paper goods" such as napkins.

Nearing the end of the twentieth century, Inserra was attempting to keep pace with both the changing grocery industry and the changing lives and needs of the customers that it served. Rather than resting on its laurels and allowing business to get stagnant, Inserra was proving that it was willing and able to make the changes necessary to carry the company well into the next century.





Further Reading:


Bergen, Tom, "ShopRite Parent Taken Private by Top Managers," Capital Business Review, November 9, 1987, p. 9.
"Grocery Stores: A Market Basket of Changes," Record (New Jersey), February 5, 1995, p. 4.
Harper, Roseanne, "Inserra Rolls Out Crusty Bread After Test," Supermarket News, December 4, 1995, p. 37.
"Inserra Buys 5 ShopRites," Supermarket News, January 2, 1995, p. 6.
"Inserra Buys 4 Pharmacies," Supermarket Pharmacy, February 1995, p. 7.
McGeehan, Patrick, "Worth a Fortune: N. J. Boasts 17 Companies on Famed List," Record (New Jersey), November 24, 1992.
"Poughkeepsie Savings to Open Rockland Offices," Hudson Valley Business Journal, October 30, 1995, p. 5.
"ShopRite Yesterday and Today," ShopRite, http://www.shoprite.com/ (July 7, 1998).
Williams, Mina, "Casual Affairs," Supermarket News, October 14, 1996, p. 25.

Source: International Directory of Company Histories, Vol. 25. St. James Press, 1999.




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