Stater Bros.

Customer loyalty supports 167 stores
Andrew Edwards, Staff Writer
Posted: 02/19/2011 07:07:27 AM PST

SAN BERNARDINO – Twin brothers Cleo and Leo Stater opened the first Stater Bros. store in 1936 in Yucaipa. Even in the midst of the Great Depression, the brothers managed to open another four stores by the end of the 1930s.

Seventy-five years later Stater Bros. Markets has 167 stores and more than 18,000 employees. Although the original Yucaipa store no longer exists, the San Bernardino-based firm is the largest private employer in San Bernardino and Riverside counties.

“Stater Bros., if it has lasted 75 years, which I think is incredible, has to be doing something right,” said Stanley C. Abraham, professor of strategy and entrepreneurship at Cal Poly Pomona.

Stater Bros. promotes itself as an old-fashioned company.

The grocery chain’s promotional campaign mirrors its reputation among the Inland Empire’s business observers. Stater Bros.’ longevity may be less the outcome of any single flash of brilliance or spectacular innovation, than the fruit of many years of fair prices and customer service.

“Stater Bros. is unique in itself because it has a really loyal customer base,” said Sandie Smith, senior vice president of the retail group at Grubb & Ellis’ Ontario branch.

“I think part of their success is that they expanded very conservatively and very cautiously,” she added.

But that’s not to say Stater Bros. has not been willing to make bold moves. The company acquired 43 former Albertsons and Lucky supermarkets in 1999.

“That was a tremendous amount of new business,” Stater Bros. CEO Jack Brown said. “Some would say it was a tremendous risk, but we thought it through very carefully. We planned it very carefully and we executed it to perfection.”

Stater Bros. made another big move in 2007 when the firm moved its corporate headquarters from Colton to a new office and distribution center near San Bernardino International Airport. The 2.3 million-square-foot complex includes 1.2 million square feet of dry storage and 700,000 square feet of cold storage space.

The sprawling complex has special equipment for the ripening of Stater Bros.’ biggest selling produce product – bananas – and is the supply center for every single Stater Bros. store, whether the store is as close as Ontario or as distant as the Mojave store near Highway 14 in Kern County.

“It is logistically the most efficient location in Southern California, in my opinion,” Brown said.

Brown often uses words like “efficient.” He says any move that keeps costs down can help to keep Stater Bros. prices lower than national competitors like Vons, Albertsons and Ralphs, or Wal-Mart and Target, big-box stores that are relatively new to the grocery game.

Target, for example, calls its grocery business “PFresh.” The Minneapolis-based company has about 35 Southern California stores with the PFresh format and will add four more in the region by the end of March, spokeswoman Jamie Bastian wrote in an e-mail.

Nationally, 850 Target stores are expected to offer food by year’s end.

“While Target does not release specific sales or dollar figures, we can share that we’re really pleased with the results,” Bastian wrote. “Our remodeled stores have experienced traffic and sales increases.”

Stater Bros. isn’t scared of their new rivals, said Brown, who has led Stater Bros. since 1981 and before that held executive positions with other markets. Brown began working as a 13-year-old boxboy at a San Bernardino grocer.

“In my career of 60 years, I’ve seen Sears go into food twice. I’ve seen JC Penney go into food three times. I’ve even seen Marshall Fields in Chicago go into food,” he said.

Stater Bros.’ 75 years has been enough time for the grocery business to evolve in other ways besides the new competition from big-box stores or the warehouse stores that grew in popularity during the 1980s.

The kind of small stores Stater Bros. founders Cleo and Leo Stater opened during the Great Depression evolved into to the supermarkets Stater Bros. and its competitors opened during the postwar boom years.

During more recent years, supermarkets have grown larger and fancier. Newer Stater Bros. locations like the ones in east Highland or north Fontana boast amenities like floral sections and deli departments that can be also be found inside stores belonging to national competitors’ like Ralphs or Albertsons.

Not all Stater Bros. stores have those amenities. Stores like those in north Redlands or in Ontario at Fourth Street and Vineyard Avenue are smaller and offer a no-frills shopping experience when compared to the chain’s newer locations.

Stater Bros. is considering building newer replacement stores in several locations, such as Grand Terrace, Brown said.

While individual supermarkets went upscale, the number of companies in the grocery business has shrunk.

Alpha-Beta, which had its first store in Pomona, vanished after its parent company merged with Lucky Supermarkets. Lucky later merged with Albertsons and its name has disappeared from Southern California shopping centers.

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