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Saturday, Mar 2, 2024

Here’s The Beef

It’s like Hughes Family Markets, redux, circa 1965. The name HOWS is an acronym of executives from that chain, swallowed up by Ralphs in 1997, who took their experience and relationship and parlayed them into being founding partners for this chain. The “H” is Roger Hughes, former chairman of Hughes Family Markets; “O” is Mark Oerum, former vice president of operations of Hughes Family Markets; “W” is Dave Wolff, former group vice president of Hughes Family Markets; and “S” is Steve Strickler, former vice president and corporate treasurer of Hughes Family Markets. As Oerum described it, “Roger is kind of our mentor and brings a bit of the history. Myself, I’ve always been operations and not a big one for sitting here working on the deals. Dave likes dealing with the sales people — his analytical skills are great. Steve Strickler is our finance guy. Four distinctly different personalities, we distinctly love our little section of what we do. And we get along. So it works.” He went to work at Hughes at the age of15 as a box boy. He was the only executive who moved over to Ralphs. He said “It’s a lot different than the Hughes culture. Like what happened with the old Dales chain, Hughes Markets personality was gone.” They started HOWS in ’99, and Oerum said it was key to get “people we had known at Hughes. They had grown up with what we had believed was the right way to sell groceries.” The chain now has five stores, the newest in the NoHo Commons. Oerum calls it their “dream store” that took a road trip to create. “Everybody, directors and above, flew into San Francisco and we rented a van and drove through Sacramento and into Reno and stopped at every market we saw,” he said. They each noted the ideas they liked from a handful of regional markets throughout Northern California. “We pooled them all together and went through them and that’s how we came up with the North Hollywood store,” he said tracing the ideas’ DNA from Molly Stone, Dragon’s, Whole Foods, and Nugget. “We’re quite proud of that store. It’s got a certain ambience flat screen TVs with CNN on one and the Food Channel on the other, and a fireplace. What’s nice with us, unlike with a big corporation you can have ideas that may take 10 years to implement. Here we just do it and if it doesn’t work we try something else.” Oerum’s office is punctuated with a few models of cars and motorcycles. “I’m just a car guy; I’ve always been.” He drives a Chrysler 300 SRT8, and “his love” is a Ford Shelby GT 500. “I’ve got it up to about 600HP. It’s lowered, blue with white stripes,” he said. Sometimes he drives it in on Saturdays, he said, when “it’s more casual.” Question: How’s HOWS different from other stores in the eyes of the customer coming through the door? Answer: It’s a bit more like coming into a supermarket from the ’60s or ’70s. Our checkers learn the customers’ names. We really hang our hat on our perishables: meat, seafood, produce. Our meat is really second to none. We only sell choice and prime; we have real butchers in every store and a service meat counter in every store. Meat is a huge, huge thing for us and finding really good meat is tough these days at a reasonable price. Q. Is that a loss leader to bring people in? A. No. We buy them right. Sometimes our size is to our advantage. There’s only so much prime available. Think about a major supermarket chain. When they run an ad they have to service 100, maybe 200 stores. You can’t get enough prime, so they can’t focus on it. We turn that into our advantage We’re five stores, we buy enough so it comes out well for our customers. We hang our hat every year on prime rib; we sell prime rib for Christmas. We start buying it up in June and July the longer it’s aged the better it is quite honestly. We start collecting that up and sell it at a price nobody can beat in town. And we literally sell tons of it. Q. You then create your own market? A. Instead of going the way of our competition, ‘Hey, we have this great frozen turkey buy one, get one,’ we focus on the prime rib. We still have the frozen turkey at a reasonable price, but that’s not what we feature. We focus a lot on wines; we have very competitive wine pricing. We’ve got quite a wine market business going. In the North Hollywood store we fought to get the first full-scale wine tasting going in a supermarket. We got turned down and we had to appeal it. The city went to bat for us. We had the mayor’s support and the city councilman’s support. We really thought it was unique and ideal for the redevelopment area in NoHo. They’re creating a wonderful neighborhood and what a mix of people down there. Q. What is the mission of management? A. I want to be a great employer. Right now we have 315+ employees at the five stores. We have very little turnover. It’s the quality of the people. Q. How does that get communicated to employees? A. By being accessible, being available and around all time. I have an open door. Everybody knows everybody. Q. How does that help? A. Our stores all communicate everyday. We have a big semi that makes a big circle of all our stores. All the stores all contact each other and we move product around everyday to be sure we’re not out of anything. That’s the quickest way to lose a customer in my opinion. Q. What are some of the missteps that have been made? A. Hey, we’re not perfect. We make mistakes and we try to learn from them. We opened a couple of stores we shouldn’t have opened. It was cheap rent and thought ‘Hey, this is great deal.’ But there was a reason it was cheap rent. We had to close a couple. That hurts. I was able to do it without laying people off. It was hard because everybody’s hours get cut. That was the biggest (misstep). We’re gonna be a lot more careful going in the future. We have to go for the right demographic. We’re aimed at middle class. You have to earn the business these days. There’s a lot of competition, a lot of people are doing things right, the Whole Foods of the world, the Gelsons, the Ralphs and the Vons and a lot of them sell the exact same things we do. Q. The grocery strike was major news in 2003 and 2004 — what impact did it have on HOWS? A. That really put us on the map. We’re a union employer; we get along with the union very well. They even helped us get a few of the locations. It’s not an adversarial relationship. We were union from the beginning. So then this great grocery strike happens and the union who we get along with let me sign a sweetheart contract where we’d agree to negotiate after. I really believe they know we take care of our people. I have a store in Torrance doing $200,000 a week and overnight when the strike came it does a million dollars. A lot of new customers came in, you can’t buy that advertising and we’ve able to hold on to a chunk of that business afterwards. We, as a store, have been whole since the strike. We put the money we made in the strike away and put it in the bank and saved it. And when we had enough, that’s how we were able to build North Hollywood. But the strike was good thing. I was really hoping this last time they wouldn’t settle. Maybe we could have opened another store down the road. SPOTLIGHT: Mark Oerum TITLE: Partner, HOWS Markets (responsible for operations and resources) AGE, BIRTHPLACE: 52, Van Nuys EDUCATION: High school, some college MOST ADMIRED PERSON: Mike Solen, mentor from Hughes Markets PERSONAL: Divorced, 3 boys CAREER TURNING POINT: Always wanted to be a police officer, got the opportunity to do it at age 21, took that opportunity in Oregon and returned to beg for his grocery job back.

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