Mimi Song has always seen opportunity in other people’s failures.
When major grocery chains shut their doors in L.A.’s inner city, Song has been right there to pick up the lease and open a market even grander than the exiting chain’s store.
So when Vons Cos. announced last month that it was closing its six-year-old Compton store after it failed to make a profit, Song, president and chief executive of Superior Super Warehouses, snapped up the chance to add store No. 11 to her growing urban grocery empire.
“I was always interested in that site,” said the 43-year-old grocery executive, sitting inside her large office at the company’s headquarters in Lynwood, south of downtown Los Angeles. “But the city wanted a major supermarket chain to come in, and I said, ‘OK.'”
Now that Vons is pulling out, the city has apparently changed its tune; officials are eager to have Song take Vons’ place.
Song president, chief executive and controlling stakeholder of the grocery chain is planning to renovate the 42,000-square-foot former Vons store, which is about half the size of Superior’s other behemoth outlets. She plans to open the new facility in September, using the same formula that has enabled the company to more than double its revenues over the past five years.
The rapid growth of the Superior, which now generates $300 million in annual revenues, is directly related to the dearth of full-size grocery stores in L.A.’s core of middle- and lower-class neighborhoods. The major chains have largely failed to capitalize on the exploding populations there. And part of the reason for that, according to industry observers, is that successful urban-core grocery stores are a different breed than supermarkets in higher-income areas.
“Any supermarket chain or independent chain has to be tied into the unique needs of the inner city if they are going to be there,” said Dave Heylen, spokesman for the California Grocers Association, a trade group. “There are different needs there and those who are aware of them are successful.”
While Vons didn’t make it in Compton, Superior has a simple formula for success: rock-bottom prices coupled with quality produce, meat, seafood and an in-house bakery. “Our philosophy is to sell groceries lower than anyone else,” said Song, who started as a bookkeeper and cashier with Superior when it opened its first store in 1981.
A quick comparison suggests that Superior delivers on its low-price mandate.
Recently, seedless watermelons were selling for 10 cents a pound. Boneless chuck steak was on sale for $1.29 a pound and fresh whole catfish for $1.59 a pound. Over in the bakery, freshly made carrot cakes were $3.99 each, and bolillos, a small Mexican-style roll, were selling for 13 cents each.
By comparison, a Ralphs market was selling watermelon for 33 cents a pound, boneless chuck steak for $3.89 a pound, whole catfish for $2.69 a pound, carrot cakes for $8.49 each, and bolillos for 25 cents apiece.
Good, fresh produce is another attraction, particularly fruits and vegetables popular in the Latino and African-American communities. Green mountains of nopales, a cactus leaf used in Mexican cuisine, are piled next to rolling mounds of tomatilloes. Watermelons nearly tumble out of large cardboard boxes situated at the entrance to the store.
Rock-bottom prices have been achieved partially by preventing the United Food and Commercial Workers union from organizing the chain’s 1,900 employees.
While nearly 75 percent of grocery-store workers in Los Angeles County belong to the union, Superior has resisted weathering 18 years of picketing. Organizers from the union’s Local 770 are still marching in front of five of the company’s 10 stores.
“Their workers are underpaid,” asserts Jim Rodriguez, the local’s director of organizing. “Checkers at a Food4Less (who are union members) earn $12.50 an hour after two years, where checkers at Superior earn $6.50 to $7.50 an hour.”
Song doesn’t dispute that most of her employees don’t earn as much as union members, but it is their choice not to organize, she said.
Superior officials say they have proof that local residents support the chain. For one, most of Superior’s employees are residents of the very neighborhoods the stores serve. And the store’s popularity was evident after the 1992 L.A. riots, when not a single window at Superior’s three then-existing stores was broken, Song said.
“The Superior markets have definitely filled a void in the community,” said Dora Gallo, a spokeswoman for Mark Ridley-Thomas, the L.A. city councilman whose district encompasses South Central Los Angeles, where a Superior market opened two years ago. “There had been an effort to put in a supermarket in that general location (of Western and Manchester avenues) for several years.”
Superior’s markets look and feel very much like the Food4Less stores that have been sprouting up in inner-city neighborhoods since 1989. But Superior actually introduced the warehouse concept before Food4Less.
In many ways, Superior’s warehouse stores in inner-city neighborhoods were bred by accident. James Oh, the South Korean businessman who founded the chain but retired in 1997, launched his first Superior market 19 years ago in mostly middle-class West Covina, after taking over the lease of a Smith Food King market. Song, a recently arrived immigrant from South Korea who spoke little English, was one of his first employees. She was joined by her younger sister, Marie, who is now the company’s vice president of finance.
Oh closed that store two years later, due to a 50 percent decline in sales prompted by union picketers who were constantly marching outside the store.
Meanwhile, he had taken over another Smith Food King lease in South Central Los Angeles, where union picketers didn’t deter as many customers. A third store was opened in Lynwood in 1984 after another supermarket went out of business.
As more inner-city grocery stores failed, Superior Super Warehouses stepped into urban areas such as Cudahy, Montebello and Huntington Park.
Song’s goal is to grow the chain by 10 to 15 percent a year, eventually having as many as 50 stores in her inner-city lineup devoted to helping large families cut costs.