Super 88 Market Closes Half of Stores

http://www.boston.com/business/articles/2008/10/11/super_88_shifts_course_as_competition_mounts/

By Christina Pazzanese Globe Correspondent / October 11, 2008

Super 88 shifts course as competition mounts
Asian market chain to shut 3 stores, renovate others

Facing heightened competition from other Asian grocers, Super 88 Market has quietly shuttered half of the chain’s six Boston-area stores and reduced the number of products it carries.

In the past month, the Boston-based Asian food grocery chain, which specializes in Chinese, Japanese, Vietnamese, Korean, Thai, and other Southeast Asian goods, closed three small stores, in Quincy, the South End, and its original location in Chinatown, which opened in 1978. The stores performed below expectations and were too costly to justify their existence, said Glenn Frank, general counsel for Super 88 owners Peter and George Luu. Some workers have been reassigned while others were laid off, though he declined to provide specific figures.

Frank said the company will now refocus the business on its larger, remaining stores, in Allston, Dorchester, and Malden - which are all 20,000 square feet or larger. In the next two to three months, Super 88 will add new shelving and freezer and refrigeration systems and expand the food court areas. The company will also narrow the selection of products it carries while beefing up quantities of certain products.

“Super 88 is not only not going anywhere, we’re thriving,” Frank said. “We’re investing a lot of time and energy into making the other stores better.”

For years, Super 88 dominated the market, filling a niche for the fast-growing demand for Asian foods. Between 1990 and 2000, the number of Asian-Americans in Massachusetts soared 68 percent, according to the US Census Bureau. This population’s considerable buying power and loyalty to shops providing fresh produce and seafood soon made rival grocers jump into the market. At the same time, supermarket chains like Stop & Shop and Shaw’s expanded their ethnic food offerings.

The competition intensified in recent years, with rivals C Mart Supermarket opening near Chinatown and Kam Man Foods debuting in Quincy. This year, H Mart, a national chain specializing in Asian foods, unveiled plans to open a 51,000-square-foot store in Burlington.

“The fact is Asian-Americans are the fastest growing racial group in the state,” said Paul Watanabe, director of the Institute for Asian American Studies at the University of Massachusetts at Boston.

Super 88’s downsizing will likely allow the remaining stores to better compete against niche and national grocery chains. Large stores give retailers a chance to showcase a wider assortment of products and in greater quantities, ideally luring a broader customer base and keeping customers from feeling they need to visit other merchants, said David Orgel, editor in chief of Supermarket News, a weekly trade magazine.

Large stores “would be more of a destination and you can really show the range of what you can do,” Watanabe said. “Trying to do that in a small store is a challenge.”

These days, empty shelves and freezer cases are evident in Super 88’s large Allston and Dorchester stores. This week, the handful of shoppers in Dorchester barely seemed to notice that the store’s bakery and hot, prepared food display were barren and unstaffed. A sign marked “eggs” offered none below, while a tank advertising live rock crabs held only a few.

Dorchester store manager Ken Hong, said there had been some difficulty getting products from suppliers in recent weeks, but the backlog has been resolved and new stock is rolling in.

In Allston, workers painted the exterior, while inside a small group of employees put away batches of canned goods. But many freezer cases were empty with signs promising future renovations. The store appeared quiet, with only one checkout lane open around lunchtime, a stark comparison to the bustling food court down the hall.

Geoff Modest, a regular customer at the Dorchester store, said he has been worried about the store’s fate - and even asked employees yesterday what was going on because on several occasions recently the store ran out of a brand of hoisin sauce he liked as well as certain rice paper.

“When they started to get rid of housewares, I was getting concerned,” said Modest, adding that he thought it was great the larger stores are getting an upgrade.

In addition to the reorganization, Super 88 in June was ordered to pay $200,000 in restitution and fines after Attorney General Martha Coakley’s office said the company had violated the state’s wage and hour laws, failing to pay more than 300 workers at all six stores the minimum wage, overtime, Sunday, and holiday pay during early 2007.

The company is paying the sum in installments, said Harry Pierre, a spokesman for the attorney general.

© Copyright 2008 Globe Newspaper Company.

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