Big Y Foods, Inc. Business Information, Profile, and History

Company Perspectives:

Big Y is a family owned and family oriented retail food company serving peoples' at home food needs. Our goal is to exceed our customers' evolving expectations by constantly seeking better ways to create and deliver world class service and value.

History of Big Y Foods, Inc.

Big Y Foods, Inc., headquartered in Springfield, Massachusetts, owns and operates a retail supermarket chain in Massachusetts and Connecticut. With almost four dozen stores, it is the largest privately owned grocery chain in the region. Half of these are Big Y World Class Markets, which in their range of goods and services rival some of their giant, mass market rivals. Besides floral shops, bakeries, and delis, some provide banking, dry cleaning, photo processing, and even baby sitting services and propane sales. Many stores also have Big Y Food Courts, where shoppers can lunch on prepared foods. Big Y also operates a Table & Vine shop, a gourmet food, fine wine, and liquor store located in its World Class Market in Northampton, Massachusetts. Ownership of the company remains in the D'Amour family, which inherited the business from its founders, Paul and Gerald D'Amour.

A Family Business on a Small Scale: 1936-50s

Big Y Foods got its start in Chicopee, Massachusetts, in 1936, when 30-year old Paul D'Amour, a Wonder Bread Baking Company route salesman, bought the Y Cash Market, a small grocery store where hamburger meat sold for 25 cents a pound and bread for a nickel a loaf. The store was so named because it was located at an intersection in the Willimansett section of Chicopee where two streets converged to form a "Y." D'Amour opened the 900-square-foot store on December 12 and was soon joined in the business by his teenage brother, Gerald. They were thereafter joined by their two sisters, who helped out with administrative tasks, including cash handling and financial reporting. Thus, from the outset, Big Y was a family business.

By 1940, just prior to World War II, the Y Cash Market's sales had increased 20 fold, and the store had physically expanded to three times its originally size. The war slowed the store's growth somewhat, but by 1947, with the postwar boom started, the D'Amours were able to open a second store in what had previously been a bowling alley, a much larger facility than the original Y Cash Market. It was also in 1947 that the company was first incorporated.

The business was faring well, and the D'Amours made sure that it kept in step with the rapid changes in the retail food industry, accommodating, for example, the new packaging and frozen food preparation advances that were then revolutionizing the trade. The Y Cash Markets met increasing customer demands for greater variety, self-service, and one-stop-shopping convenience.

First Big Y Supermarket and Continued Growth: 1950-70

In 1952, the D'Amour family took a lease on a 10,000-square-foot store located close to the Westover Air Base in Chicopee. Because it was considerably larger than other grocery stores in the area, the D'Amours dubbed it the Big Y Supermarket. It became the first real supermarket in Chicopee. Eight years later, the company opened a much larger store in Northampton, a town in western Massachusetts. At 31,000 square feet, it was three times the size of the Big Y Supermarket in Chicopee and rivaled most any store in that area of the state. Three years later, in 1963, the D'Amours acquired a second site in Northampton, where it opened Big Y Wines & Liquors, a specialty store retailing various alcoholic beverages.

Big Y moved into what would become its operational home, Springfield, Massachusetts, in 1967, and in 1968, with six stores then it operation, it added seven more when it acquired the Jumbo Supermarket chain. About that same time, a second generation of the D'Amour family began working in the business. The company's management also moved into a whole floor of offices in a business building in Chicopee. From there, the family and its colleagues directed the further expansion of the company.

In 1972, the company acquired two Popular Supermarkets, located in Longmeadow and the Sixteen Acres section of Springfield. By then, Big Y was established as the leading privately owned grocery chain in its area of the state. And it continued to grow through the rest of the decade, despite increasing competition from the burgeoning number of giant supermarket chains sprouting in the region.

In 1981, in a move that enhanced its image as a locally owned business, Big Y established its annual scholarship program honoring academic achievement and merit, a program that it would expand for the next several years. The company was also broadening its business horizons, and in 1984, for the first time, it expanded outside the state by purchasing a supermarket and shopping center in Stafford Springs, Connecticut. During that same year, Big Y was also expanding in its home state, where it acquired of the Adams Supermarket chain in Berkshire County, Massachusetts.

Innovations and World Class Supermarkets: 1980s-90s

By 1986, the year in which Big Y reached its 50th anniversary, it had become the top ranked private grocery chain in western Massachusetts. Although it ranked only 12th in the entire state, it had 21 stores and about 1600 employees. In order to maintain a competitive edge, it had also became a leader in the use of technology to develop efficient energy management, security, product delivery, inventory oversight, and scanning and communication systems that ranged through every aspect of its business. Its growth, which continued through the rest of the decade, dictated a need to expand its base of operations. Accordingly, in 1989, it leased new offices on Chestnut Street in Springfield, which thereafter became its corporate center.

The new decade brought many changes, one of which, sadly, was the passing of Big Y's founder, Paul D'Amour, who died at 84 in 1990. At the start of the new decade, the chain expanded into Worcester County, Massachusetts. By that time, too, Big Y began handling some of its own product distribution, thereby taking advantage of special sales and discount bulk purchasing. To facilitate this move, the company purchased a 100,000-square-foot warehouse and distribution center in Springfield. For a few years, Big Y Foods maintained a small fleet of trucks to distribute products to its various stores, but in 1994, finding it difficult to hire and retain drivers and meet training and DOT (Department of Transportation) requirements, it turned the task over to dedicated carriage-route providers, ultimately contracting with Ryder Integrated Logistics Inc. of Miami to handle this operation exclusively. Ryder operated a fleet of ten tractor-trailers to service the Big Y stores.

In the same period, Big Y put some innovative programs into effect. For example, in 1990 the company instituted its Express Saving Club. Under the new plan, which gained national recognition, Big Y stores eliminated in-store coupons in favor of giving savings to customers who received discounts when clerks scanned customer-held cards at checkout counters. In 1993, it also tied the Express Savings Club to Education Express, one of several education programs Big Y sponsored. Education Express helped fund the purchase of equipment for local schools.

Civic involvement, particularly in school projects and support, was and is a point of pride for Big Y Foods. By June 1994, through Education Express, the company had awarded almost $2 million to over 900 schools in its market area. Big Y also developed a toll-free tutoring service for students. Dubbed Big Y's Homework Helpline, it was instituted to assist grade K thru 12 students in completing their out of class assignments.

It was also in 1993 that, in Springfield, after three years of research and development, the company opened its first World Class Market. The 64,000-square-foot store stressed true single-stop shopping, featuring several amenities not usually available in most supermarkets: a food court for in-store dining, a pizza counter, rotisserie-flamed chickens and ribs, a European-style bakery, a floral shop, a full-service bank, and an array of newspapers from around the world. The next year, 1994, it also opened another such market in Monroe, in Fairfield County, Connecticut. Further expansion continued the following year, when Big Y moved its grocery and produce distribution operations into a new 185,000-square-foot warehouse in Springfield and began its facilities management operations in an adjacent building.

Growth through Acquisition and E-Commerce in the Late 1990s

The next year, 1996, Big Y marked its 60th anniversary by purchasing five additional stores. These stores were formerly Edwards Supermarkets, all located in Connecticut. Their addition increased the number of Big Y stores in that state to 14. The company also added a new customer service in 1996, its Little Y Kids Club, a supervised play area for children in the store. The initial one opened in Big Y's Manchester, Connecticut, World Class Market. It was the first of its kind in Connecticut and only the second of the sort in all of New England.

Two years later, in 1998, Big Y opened a web site, offering to Internet browsers a range of data, including information on the individual stores in the Big Y chain, such as the various services that each of them offered to customers. That year, too, the company moved into its new corporate headquarters, a 133,000-square-foot building in Springfield. Designed by Wrenn and Pepin Associates, the structure began as just a shell office building, but over the year in which it was built it developed into a complete corporate center dubbed the Store Support Center. In addition to executive office suites, it housed a conference center, cafeteria, physical fitness training center, and a museum dedicated to the company's history. The year 1998 also saw the conversion of Big Y's Wines & Liquors into Table & Vine, a separate, 14,000-square-foot gourmet food, wine, and liquor shop in Northampton, Massachusetts.

A second round of Big Y's Education Express ended early in 1999. It awarded another $2.5 million to schools for funding the purchase of essential equipment, bringing the total of Big Y's first two rounds to $4.5 million. Altogether, 1,800 schools participated in the program.

Expanded Services and Upgraded Support Systems: 2000 and Beyond

Big Y ventured into another service area when, in August 2001, it opened its first in-store pharmacy at its newly remodeled supermarket in Longmeadow, Massachusetts. Although small, occupying just 400 square feet, the pharmacy was designed to accommodate two pharmacists and a technical assistant. Although the company had resisted installing pharmacies in its super stores through the 1990s, once it did decide to incorporate them it set about the task at a fair clip. Its plans called for placing pharmacies in ten additional supermarkets by June 2002.

In both 2001 and 2002, Big Y again illustrated why it could boast a reputation for quick adjustments to new technology, particularly systems that improved information retrieval and both effective routing and display. First, in June 2001, Big Y entered into an agreement with Retalix Ltd. to employ that firm's Storeline POS (point of sales) application for its promotional activities. The system displayed purchases on a screen visible to store customers during scanning along with a running, item-by-item total as well as savings. Next, in February 2002, it partnered with Cognos Finance to help fill its need to provide up-to-the-minute financial information to its department and district decision makers. Cognos allowed Big Y's IT (Information Technology) department to centralize financial information in one system and automate roll ups and roll downs in pricing.

Because of its adaptability to both technology and marketplace trends, as well as its community services, Big Y Foods earned a solid reputation in its market area. It continued to compete with national super chains in range of goods and services, which, with the advantages it enjoyed as a regional company, gave it a solid footing for future growth and longevity.

Principal Competitors: Cumberland Farms, Inc.; DeMoulas Super Markets Inc.; The Golub Corporation; Hannaford Bros. Co.; Shaw's Supermarkets, Inc.; The Stop & Shop Companies, Inc.; SUPERVALU INC.; Wal-Mart Stores, Inc.

Chronology

• Key Dates:
• 1936: Paul D'Amour buys Y Cash Market in Chicopee, Massachusetts.
• 1947: Big Y Foods, Inc. is incorporated, and the D'Amour family opens a second Y Cash Market in Chicopee.
• 1952: The company opens Big Y Supermarket in leased store near Westover Air Force Base in Chicpoee.
• 1960: Big Y opens a supermarket in Northampton, Massachusetts.
• 1963: The company buys a second Northampton location and opens Big Y Wines & Liquors.
• 1967: Big Y opens a store in Springfield, Massachusetts.
• 1968: The company acquires seven-store Jumbo Supermarket chain.
• 1984: The company extends its operations into Connecticut with the acquisition of a supermarket in Stafford Springs; Big Y also purchases Adams Supermarket chain.
• 1989: Corporate headquarters are moved to Chestnut Street in Springfield.
• 1990: Big Y initiates its Express Savings Club; company founder Paul D'Amour dies at age 84.
• 1993: The company introduces new community-service programs: Education Express, Educating Kids, and the Big Y Homework Helpline; Big Y also opens its first World Class Market in Springfield.
• 1998: Big Y moves into new corporate headquarters and goes online with bigy.com; Big Y Wines & Liquors is refashioned as Table & Vine, a gourmet food and fine wine and liquor store.
• 2001: The company rolls out its new interactive, computerized register system.