With the big conventional grocers carrying more and more organics, and competitors including Portland-based New Seasons and now Amazon-owned Whole Foods encroaching on PCC’s traditional domain, the local consumer-owned grocery co-op is renaming itself PCC Community Markets.
The last time PCC changed its name — from Puget Consumers Co-op to PCC Natural Markets in 1998 — it was because some people didn’t know they could buy food from the co-op, and it came at a time organic and natural foods were still a rarity at most grocery stores.
On Wednesday, PCC changes its name again — to PCC Community Markets. Now even huge, conventional grocers are carrying more and more organics, e-commerce is reshaping the industry, and a host of competitors, including Portland-based New Seasons and the Whole Foods + Amazon behemoth, are all encroaching on PCC’s traditional domain. Add to that the influx of newcomers to the Seattle area who may not even know about PCC.
That prompted the retailer “to look internally and say: What is it that keeps us relevant, makes us unique and special in a grocery industry that’s changing, in a city that’s growing dramatically,” said Cate Hardy, chief executive of PCC Community Markets. “What is PCC’s position and relevance in that market?”
PCC Community Markets
Number of stores: 10 currently open. West Seattle store closed for redevelopment, reopening in 2019. Burien store scheduled to open in 2018; Madison Valley in 2020.
Sales: $277.7 million in 2016, up 10 percent from 2015
Profit: $7.6 million, up 39 percent from 2015
Members: 58,000 households
Membership: $60 for a lifetime membership. Benefits include 10 percent off one shopping trip each month, and 5 percent off on the 15th and 16th of each month. (Membership is not needed to purchase items at PCC.)
Source: PCC Community Markets
The conclusion — after a year and a half of market research — reinforced what PCC staff had already known on some level: What makes it stand out is that, “We’re from here, always have been,” Hardy said. “We’ve never expanded out of the three-county area here. Most uniquely, we’re owned by our members.”
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That means the grocer is beholden only to the community, not “a venture-capital firm in Boston or Silicon Valley or Wall Street, or a large retail behemoth that might buy companies like ours,” Hardy said. “We have a very pure sense of where our accountability lies.”
The name change is meant to emphasize that sense of community ownership, as well as the fact that PCC’s products and supply chain are largely local — important to a large swath of people in this area who care about where their food comes from, the workers who grow their food, and the environment, Hardy contends.
“There are definitely other places to buy organic bananas,” she said. “But there aren’t other places where the meat merchandiser has a personal relationship with the rancher or the produce team personally knows the growers in Stanwood.”
Indeed, it’s not enough these days for a grocer to tout that it carries organic or natural foods. Stores from Wal-Mart to Costco to Fred Meyer already do so.
Plus, the term “natural” isn’t really meaningful and has been stretched a lot over the years, Hardy said.
The name change also reflects that each store location gives, on average, $90,000 a year back to the community.
PCC is planning a marketing blitz in conjunction with its name change and logo change, which were all a result of work done with Seattle-based ad agency Wexley School for Girls.
The co-op will debut 17 billboards and several signs on walls and transit stations around town. It will also run print, radio and online ads in local media, and it plans campaigns on Facebook and Instagram focusing on ranchers, farmers and others who make up the PCC community. The co-op declined to say how much it’s spending on the campaign.
PCC is also adding some new products this fall. One is a private-label PCC yogurt that is organic, non-GMO, grass-fed and animal-welfare-certified, produced in partnership with Pure Eire Dairy in Othello. It will also offer ready-to-cook meal-kit components, a “chop shop” where employees will cut any of PCC’s fruits and vegetables to order, and a spirits shop selling local spirits.
Tom Murphy, principal and global-retail and consumer-products-industry lead at the consulting firm North Highland, said a “feeling of community” is a key driver for local shoppers.
“It’s the experience versus the product,” he said. “Everybody is carrying organic products and everybody is trying to establish an experience for the customer beyond just the product. I can buy apples anywhere. The question is: Why would I go to Trader Joe’s to buy apples as opposed to Safeway, or PCC as opposed to Fred Meyer? Personally, for the experience.”
Price and quality certainly factor into the equation, Murphy said. But the gap in prices between competitors is shrinking and “if I can get an apple and have a better experience” at one store than the other, that makes a difference.
That difference may translate into a customer who’s more loyal, and less likely to stray as often when, say, Whole Foods makes a price cut, Murphy said. It gives the grocer a little more time to react to competitors’ moves.
Still, Murphy warned, “Community stores can’t get complacent with that because it’s not a long-term deal. If quality, price, convenience and experience don’t hold up, you’ll start to lose your competitive advantage.”