Century-old Woodman's expanding suburban reach
Since its humble beginnings nearly a century ago in Janesville, Wisconsin, Woodman's Food Market has been a family business.
But with the roughly 100,000 items that now fill each of its stores' shelves -- dozens of varieties of ketchup, peanut butter and potato chips alone -- you might call it a mega mom-and-pop operation.
Woodman's Kenosha location is believed to be the largest grocery store in the nation at 252,345 square feet, and the company has proposed opening two more stores in the suburbs that are nearly as big.
Stores announced this year for Buffalo Grove and Lakemoor represent the Wisconsin company's continued expansion south of the border into the Chicago-area grocery market, where they hope to compete for the increasingly coveted suburban food shopper's dollar.
"It's an operation that is designed to move a lot of product and to do it at extremely aggressive price points," said Jim Hertel, senior vice president of Willard Bishop, a Long Grove-based grocery retail consultant. "You give up some things as a shopper there -- it's not a high-frills environment -- but if what you're looking for is an opportunity to save fairly significantly on your grocery bill, it's definitely an operation you should try."
Shoppers who load up their carts at the grocer's existing suburban locations in Carpentersville and North Aurora already are familiar with the Woodman's experience: Aisles and aisles of packaged goods, refrigerated and frozen foods, and produce -- available 24 hours a day, seven days a week.
An attached liquor store is open most of the day, and on the way home, drivers can fuel up at the store's gas station, which also offers carwashes and oil changes.
Woodman's estimated weekly sales of about $1.5 million are on par with a successful Whole Foods, but nearly four times that of conventional grocers, according to Hertel.
With more than $1 billion in annual sales at 16 stores in Wisconsin and Illinois, what makes the company so successful?
For one, Woodman's saves money by refusing to accept credit cards -- thus avoiding costly processing fees. And labor costs are lower because the company's 3,000-plus employees aren't unionized. The company has been 100 percent employee-owned since 1998, with 30 percent of the company owned by Woodman family members.
Hertel says the sheer size of Woodman's stores and the amount of inventory going in and out also helps drive its profitability.
"Would you rather have a fast nickel or a slow dime? Fast nickels generally win," Hertel said. "So many different competitors have to work hard to stand out these days, but Woodman's does it. They've carved themselves a very successful niche."
Woodman's didn't start building its superstores until the late 1970s when it completed a 90,000-square-foot store in Madison, Wisconsin. Then came even bigger stores of 125,000 square feet in the 1980s.
The prototype store now is 240,000 square feet, which is the proposed size for the locations in Buffalo Grove and Lakemoor. Of that, 140,000 square feet is for the grocery store itself, while the remainder is a warehouse to store dry goods, as well as other items in freezers and coolers.
Bret Backus, Woodman's vice president of real estate, told Buffalo Grove trustees last week the company is committed to staying for the long run.
"In terms of a corporate citizen, what you're getting from us is an investment in the community," as opposed to a store where, "at the end of 15 or 20 years we could move to a different community," Backus said. "We have closed one grocery store in our almost 100-year history, and that was to move to a larger facility."
The Buffalo Grove location, on the northwest corner of Milwaukee Avenue and Deerfield Parkway, is targeted for completion during the late summer or early fall of 2018.
The Lakemoor location, on the southwest corner of Routes 120 and 12, isn't a done deal. A lawsuit filed by three taxing bodies against the village regarding the legality of a special financing district remains unsettled. And officials say there are flooding issues that make the site difficult and expensive to develop. Nonetheless, Woodman's officials say they're still interested in the location.
Buffalo Grove's village board approved a sales tax sharing agreement last week with Woodman's -- a deal that promises to rebate up to $7 million over 20 years. Woodman's is paying $4 million for off-site roadway and intersection improvements, including street widening, more turning lanes and a center median.
Sales tax incentives were also approved when Woodman's came to North Aurora in 2007 ($5.2 million over 15 years) and Carpentersville ($1 million) in 2004.
"It's something that we are earning," Backus said at last week's Buffalo Grove village board meeting. "We don't look at it as something that's being gifted to us. It's not corporate charity. It's something where we're coming in and making an investment in Buffalo Grove."
Municipalities have been content to ink the deals because of the promised sales tax revenue for their coffers -- even after rebating some of it back -- as well as the additional economic development that results when a Woodman's comes to town.
In North Aurora, Woodman's has generated an average of $900,000 worth of sales taxes in each of the last three years. Of that amount, Woodman's gets back half, per terms of its agreement with the village.
"It is a draw well outside North Aurora," said Village Administrator Steve Bosco. "The only way you can explain the amount of sales they do is consider this is a town of just under 17,000 residents."
Buffalo Grove officials estimate the Woodman's project and other expected nearby development could generate as much as $25 million in new revenue for the village in more than 20 years.
• Daily Herald staff writer Mick Zawislak contributed to this report.