615 Fifth Street
C&K Market, Inc. operates about 55 supermarkets in small to mid-sized rural communities with populations of fewer than 10,000 in southern Oregon and northern California, mostly under the name Ray's Food Place. Some stores are called Price Less Foods and Shop Smart. The chain's competitive strategy is to operate quality grocery stores in niche, underserved markets. Stores are fully equipped with grocery, meat, dairy, produce, and health and beauty aid departments and offer multiple brands at varying price points.
1956-1989: Small Community Market Becoming a Regional Chain
Raymond (Ray) L. Nidiffer came to Brookings, Oregon, from Utah in 1957 and bought a one-half share in the town's local grocery store, the Collins and Kimberly Market. Nidiffer, who replaced Kimberly, jointly operated the 3,200-square-foot store with Collins at its original location until 1963. They then moved the business to a 10,000-square-foot building close by in Brookings. In 1967, the business incorporated as C&K Market, Inc.
In 1969, Nidiffer bought out Collins, who retired. When Nidiffer took over the business, Brookings had the reputation of being a fairly insular community, run by a few families and people. Although Nidiffer was a relative newcomer, the business took off under his leadership. He built up the company's administrative and operations staff and began steadily to acquire other stores in small communities throughout southern Oregon.
Most of the stores that the C&K Market leased or operated had been owned by individuals who were retiring. The company also became a member of United Grocers, a retailer-owned wholesaler, which supplied Sentry stores, and ran most of them under the Ray's Sentry Markets banner.
Nidiffer considered each new acquisition in terms of its size, age, volume of sales, and location, concentrating mostly on small supermarkets in rural locations. The strategy proved a wise one, and, by 1988, C&K had become the 62nd largest private company in Oregon, still closely held and managed. C&K's senior management met in Brookings, Oregon, every Monday, and Nidiffer, an amateur pilot, frequently visited his 23 stores in his Beechcraft Baron twin-engine plane.
1990-1995: Increased Competition from Larger Competitors
By 1990, C&K had more than 20 stores and was generating revenues of $144 million. Nonetheless, it was feeling the pinch from its larger supermarket and "big box" competitors. To solve the problem, Nidiffer put a dedicated general manager in each of the chain's stores. The managers went through extensive training to learn about promotional programs and "schematics" to develop the ideal product mix for their location. As a result of this training, C&K eliminated some 2,000 to 9,000 store-keeping units (SKUs).
By 1993, with 27 Ray's Sentry Markets, the rapidly expanding C&K no longer had to advertise for employees, and, in fact, had a waiting list of applicants, unusual for most businesses of its sort. Nidiffer's method of attracting and motivating people was to offer a combination of tangible and intangible rewards designed to recognize and reward employees' for their worth. Although the stores were not unionized, employees' pay was comparable to that of most union shops, and benefits were also good, including a profit sharing plan, a 401K plan, life insurance, and health insurance with vision and dental coverage.
In addition, the company had "an open-door policy" on grievances. "From box boy and girl on up," Nidiffer noted in a 1993 Progressive Grocer article, "we work hard to keep employees happy." He went on to claim that "we work them hard too. We don't want them unless they are happy and work hard. If they do a lot of humping, they can be store managers by the time they're 21. ... We get employees locally, but all the top people come from other stores."
By 1994, C&K had 31 stores ranging from Veneta, Oregon, a small town near Eugene, south to Davis, California. In total, they did a volume of $150 million in sales. Twenty-six of the stores operated under the banner Ray's Food Place. Of the other five, one was a Ray's Sentry, and four were Ray's Shop Smart Warehouse stores. The stores varied in size from 5,800 to 46,000 square feet, although the C&K prototype floor plan was mostly in the 40,000-square-foot range.
During the early to mid-1990s, C&K Market became a regional force in the supermarket industry, part of a trend of developing regional chains around the country. It dropped its Sentry affiliation because it had become large enough that it no longer needed to be a part of a marketing group and also because it wanted to distance itself from Sentry's high-price image, though it continued to be a part of the United Grocers group. As C&K grew, it faced increasing competition from other chains, some of them much larger, such as Lucky in California and Safeway, Albertson's, and Fred Meyer in Oregon.
1995-2006: Building Bigger Stores and Remodeling
As part of its expansion, C&K began building bigger stores and putting more of an emphasis on cultivating its low-price image. It also mapped out its expansion into other parts of Oregon and into new areas in northern California. According to Nidiffer in a February 1995 Progressive Grocer article, there was "a lot of opportunity in northern California." As for Oregon, the chain wanted "to go further north, into Salem."
In 1994, C&K purchased the largest grocery store in Sisters, Oregon. At 31,000 square feet, the Pioneer Sentry was the primary market in a small town and became C&K's easternmost store. C&K also opened three new stores in California in the mid- to late 1990s in Eureka, McKinleyville, and Clearlake, all upwards of 40,000 square feet in area.
In addition, it began upgrading its Shop Smart basic warehouse stores, putting tile on floors and including better product assortments. In one remodel in 1995, it doubled the size of a Shop Smart, added a bakery and deli and a video department, and began to offer more non-food items.
Other C&K stores, too, received remodels. As part of C&K's longtime emphasis on offering perishables as a strategy for differentiating itself from its competition, it began to devote more space in its markets to produce and full-service meat departments and added service delis and bakeries with small seating areas. It also enlarged the size of the health and beauty care departments in stores by as much as 55 percent, both increasing the variety of items and making these departments more visible. Some remodels added service departments that included ATM machines, fax transmission, photocopying, film developing, audio book rentals, money order sales, and Western Union. As part of its increased product mix, C&K also introduced its own private label program of Ray's brand for dairy products, bread, and eggs.
Sales increased by about 20 percent in C&K's 40,000- to 50,000-square-foot stores as a result of remerchandising in the 1990s. By 1997, the year in which Doug Nidiffer took over leadership of C&K from his father, the chain embarked on the last phase of its promotional program with an increased focus on seasonal merchandising.
According to Daniel Van Zant, the chain's director of general merchandise, in a 1997 Progressive Grocer article, the focus "really improved the overall image of the store at these key times of the year." Before, the stores "just didn't have the variety ... to satisfy customers and keep them from shopping our competitors." Once the stores began to put together a regular series of promotions to sell seasonal items, there was an almost immediate increase in seasonal sales of 200 percent. In response, some stores more than doubled the space allocated to seasonal items.
The following year, Oregon Business ranked C&K as the 32nd largest privately owned company in the state. The company then operated 18 stores in southwestern Oregon and another 18 in northern California. It employed more than 1,500 workers, 800 of them in Oregon. In 2000, C&K ranked 25th among Oregon's privately owned companies, and in 2002, the parent company of Ray's Food Place, Shop Smart, and PriceLess Foods was number 20.
Although a year later, it had dropped to number 21, the company still opted to follow its strategy of locating stores on the perimeter of population centers to avoid head-to-head competition with larger chains, including Wal-Mart and Costco. "When we went to Davis in 1994, the idea was to fill in down I-5 and into the central part of California. But the big boxes got so aggressive in that area that it hasn't happened. ... You get into metropolitan areas where there are bigger stores and there's serious competition," Doug Nidiffer explained in a 2003 Mail Tribune article. "We find smaller towns on the edge of big markets work the best. We ... don't have the economies of scale the 'big boxes' do."
By 2003, C&K, with 50 stores including seven in the Rogue Valley, turned its focus on Jackson County. It purchased Rick's Thriftway in Eagle Point in 2003, and Shop N Kart in White City and the Jacksonville Market in Jacksonville in 2004. Initial plans called for doubling the White City store in size, but, as was also the case at the Jacksonville location, it was "a neighborhood type of market, quite a bit smaller than most." Growth had to come through efficiency, stacking cans tighter and moving product through faster.
Between 1990 and 2005, more than half of C&K's stores had been remodeled. The family-owned chain also entered its largest market yet with its largest store, a 55,000-square-foot supermarket that it purchased in Eugene, Oregon. The new Ray's had a somewhat more upscale product line, with an emphasis on natural foods, a wide selection of produce, a large meat department, bakery, deli, and an in-store pharmacy, coffee shop, and video outlet. In an effort to reflect the architecture of the community, the building incorporated a brick-and-glass design heavy on natural light and solar features. C&K also bought three stores from the Market of Choice grocery chain in 2004, bringing its total number of stores to 55.
In 2006, Ray's Food Place in Bend took part in a pilot project with the Oregon Liquor Control Commission to locate liquor stores in supermarkets. The pilot proved successful. "We had some pretty lofty expectations for the concept," Nidiffer announced in a 2006 Knight/Ridder Tribune News article, "And it has exceeded it." With its experienced management team, dominant position in its markets, and strong local brand image and loyal customer base, C&K Market seemed likely to exceed other expectations as well.
Albertson's, Inc.; Safeway Inc.; SUPERVALU Inc.; Wal-Mart Stores, Inc.; Costco Wholesale Corporation.