Neither cowed by competition from the Wal-Mart Stores juggernaut nor dispirited by Michigan's sluggish economy, Grand Rapids-based retailer Meijer Inc. is pushing forward with a slow, steady expansion in the state.
Meijer will spend more than $123 million this year to build three new Michigan stores, upgrade older stores and expand its Lansing distribution center, President Mark Murray said in an interview Tuesday. And it will spend "north of $100 million" next year on further growth in the state, he added.
Expansion of its fresh produce and organic food offerings is a major reason for the larger distribution center. Last week, Meijer rolled out 140 new organic products ranging from produce to ice cream in its 176 stores in five states.
Meijer has a two-pronged strategy to compete with Wal-Mart, which this year will open its first five metro Detroit supercenters, which sell a full line of groceries:
? Maintain a wider selection of food than Wal-Mart. That includes the new organic products, hormone-free beef and an extensive wine selection. Meijer is Michigan's largest wine retailer.
? Secondly, keep prices low enough to stay in the same ballpark with industry pricing leader Wal-Mart. Murray cited prescription antibiotics as one area where Meijer not only matched an aggressive Wal-Mart price promotion, but one-upped its arch-competitor in October by filling prescriptions for free for seven generic antibiotics. Wal-Mart earlier had announced plans to sell more than 300 generic drugs for $4 per 30-day prescription.
"We're competing with the largest economic enterprise in the country," Murray said. "And we'll compete by being Meijer," he added, noting that the family-owned firm need not satisfy public shareholders with short-term results or dividends.
Murray, 52, former state treasurer and budget director under former Gov. John Engler and then president of Grand Valley State University for five years, joined Meijer as president in August. Hank Meijer is cochairman and CEO.
The Meijer retail chain has invested $463 million in Michigan since 2005 and employs about 30,000 people in the state, where it has 89 of its 176 stores. The others are in Ohio, Indiana, Kentucky and Illinois. Murray says Meijer has a solid future as a regional privately owned retailer in the Midwest, a business model that has worked well for similar firms competing against Wal-Mart around the country - Wegman's in the Northeast, Publix in Florida and H-E-B in Texas.
"We are very confident that there are lots of business opportunities in Michigan," he said.
"We're completely realistic about the challenges," he said, noting that Meijer has slashed "hundreds of millions of dollars" in costs by restructuring its operations during the past three years.
But just because growth is a tad slow and the competition is fierce is no reason to crawl into a hole. If free drugs aren't enticement enough, Murray suggested that the new organic ice cream is awesome.
Contact TOM WALSH at 313-223-4430 or twalsh@freepress.com.
Copyright © 2007 Detroit Free Press Inc.
By Tom Walsh, Detroit Free Press ColumnistIn your voice
