The final demise of a once-revered supermaket chain

Originally published Jan. 8, 2012

Before there was Wegmans, there was Genuardi's Family Markets. And that's where the tragedy of what was once one of the region's most revered supermarket chains begins and ends.

Few in the supermarket industry were surprised when Giant Food Stores L.L.C. announced Thursday that it was buying and converting 16 of the region's 27 Genuardi's locations - or that California-based Safeway Inc. was looking to unload eight others to prospective buyers, shut down three more, and leave Philadelphia entirely.

Genuardi's was a supermarket trailblazer that lost its mojo after Safeway acquired the Norristown-based chain in 2001 from its founding family. Over the last decade, it devolved from a retail pioneer to, some would argue, just another shingle hanging from a shopping center's anchor facade.

"What they bought was a supermarket that was best-in-class," said food-marketing professor John Stanton of St. Joseph's University, "and they were able to make it just good-in-class."

Safeway bought the chain for $530 million when Genuardi's had 39 stores; of the 27 left, 16 were sold to Giant for $106 million.

Genuardi's decline began almost immediately after Safeway acquired it.

Executives clumsily discarded what had made Genuardi's successful: a sense that shoppers no longer craved just Velveeta and macaroni.

Genuardi's was the region's go-to store for gourmands before the likes of Whole Foods and Wegmans swept in, offering a food-lover's smorgasbord of delicacies delivered with customer service so smothering, it could be mistaken for the affections of an Old World aunt.

Under Safeway, a premium was placed on the stores' operating efficiently - watching inventory, buying merchandise at the right prices, things like that. Genuardi's customers began to notice on sales floors less of what they had come to love.

"Genuardi's, in the pre-Wegmans era, was the luxury grocery retailer," said broker Steven H. Gartner, president of Metro Commercial Real Estate. "Safeway, whether on purpose or through neglect, moved them to a more middle-market chain.

"If I own a shopping center that had a Genuardi's and now has a Giant in it," Gartner said, "my shopping just got a little better."

Genuardi's was founded in 1920 as a horse-drawn grocery business run by Italian immigrants Gaspare and Josephine Genuardi. Their first store opened in Norristown in 1940, and their first superette in Jeffersonville in 1954. The company was in family hands for almost five decades onward.

By 2000, it had become the first mainstream supermarket chain to label foods with genetically modified ingredients. It was, in some ways, Philadelphia's homegrown version of Whole Foods, based in Austin, Texas.

When the sale of Genuardi's was announced at the end of that year, Safeway had 1,680 stores, mostly in Western, Southwestern, and Rocky Mountain states. It was, and remains, among the most successful supermarket corporations in the nation.

But within months of the sale, Genuardi's customers began complaining about changes to merchandise and customer service. The criticism reached fever pitch in November 2002, when the chain launched a media campaign that included a printed apology in the newspaper.

By Thursday's announcement of Genuardi's being discarded, only 27 stores remained - a diminished presence, considering the way Whole Foods and Wegmans, based in Rochester, N.Y., have expanded vigorously in the region over the last decade.

A spokesman for Safeway, Greg TenEyck, said the publicly traded corporation would not discuss its past or current strategy regarding Genuardi's. He said only that Safeway was leaving Philadelphia to focus on markets where it has a commanding presence.

"It's not so much what they did, it's what they didn't do," Stanton said. "Genuardi's was just famous for customer service. They had rules that if someone asked you for anything, you had to stop what you were doing and take them to that site."

The decadelong decline under Safeway stewardship was painfully evident at one Genuardi's set for closure - a store in a Royersford strip mall that has taken a particularly hard beating since, a few years ago, Wegmans opened 31/2 miles away along Route 422 in Collegeville.

At least two stores near the soon-to-be-vacant Genuardi's were empty. Inside the supermarket, the scene was a far cry from the verdant display of produce that seduces Wegmans shoppers at the front door.

There was little in the way of organic offerings - only apples, romaine hearts, russet potatoes, tofu, chicken broth. In the lettuce section: some spring mix, mixed baby greens, and baby spinach - an anemic version of the Wegmans wonderland.

Several decommissioned refrigerated cases once used for "prime meats" and seafood were instead draped in signs pointing to spots nearby offering meats and packaged salmon, shrimp, and crab.

A case featuring higher-end cheeses was half-empty, without so much as a wedge of Brie among its paltry offerings.

One woman, who did not identify herself because she is an employee, was upbeat about her job, despite its imminent disappearance: "All I can say is it's a great place to work because the people are so nice."

A shopper there for 12 years, Mike Ciocci of Royersford said he had continued to patronize the Genuardi's because the staff members seemed to be doing what they could despite the store's troubles.

"They were trying," Ciocci said.

Where would he shop now?

"Probably Wegmans."

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