Q&A: Busch's CEO on expansion plans, surviving the economic downturn
Busch's Fresh Food Market CEO John Busch, pictured inside the store on South Main Street in Ann Arbor, said there are still expansion opportunities in southeast Michigan.
Melanie Maxwell | AnnArbor.com
Competition in the Ann Arbor supermarket scene has exploded since Joe Busch and Charlie Mattis founded the chain of Busch’s Fresh Food Markets in 1975.
AnnArbor.com’s emerging from the recession series
Busch’s — which is headquartered on South Main Street and operates 15 supermarket stores in southeast Michigan — is looking at growth opportunities as the region emerges from the depths of the recession.
Busch’s Fresh Food Market CEO John Busch, who co-owns the chain with his brothers, Doug and Tim, spoke with AnnArbor.com about keeping up with grocery trends, how Busch’s weathered the recession and why the company doesn’t want to leave Michigan. Excerpts:
AnnArbor.com: Busch’s has a long history in the Ann Arbor area. How have you watched the grocery scene change since the company has been here?
Busch: We’ve had two Whole Foods added, a Hiller’s was added, Plum Market was added, Trader Joe’s came into the market, as well as Aldi.
It’s an incredible amount of competition.
AnnArbor.com: What niche do you believe Busch’s is filling and how does the company compete with other grocery stores?
Busch: First off, we’re what the industry calls a conventional supermarket; that is, you can get all your grocery needs in one place. That’s opposed to some of the higher-end, specialty-only stores where you typically have to go somewhere else to balance your shopping.
We carry household items like laundry detergent, pet foods, health and beauty needs… and also all the organic produce and organic offerings throughout the store, along with gluten-free items that are becoming much more mainstream. We also offer extensive prepared foods.
AnnArbor.com: What was Busch’s strategy as the local and national economy started to decline?
Busch: In 2008, we opened a store in West Bloomfield, and getting that thing up and running was the primary focus of the organization. But we just quit looking at new stores for a period of time, because those take a lot of resources. The economy wasn’t presenting that many opportunities, particularly as housing growth came to a screaming halt.
You also had to respond to what people wanted. As people became very, very cautious — especially in the early years of the recession — they were often trading down in what they might have purchased previously.
Busch's has corporate offices at its store on South Main Street in Ann Arbor.
File photo | AnnArbor.com
People ate out less, which brought more customers into the business, which offset the fact that people were trading down. …People were more conservative about spending habits. That has certainly started to come back in the last year or two, because people are being much more confident and treating themselves. I don’t know if (spending is) ever going to get back to the levels it was previously.”
AnnArbor.com: Can you talk about the sales trajectory at Busch’s and how it was affected by the recession?
Busch: We were quite stable during the entire period. We never had to lay anybody off, and we came through it, I think, just fine. We always were profitable through those years. It was a lot of work, but we came through very well, I believe.
AnnArbor.com: How many workers does Busch’s employ and have you hired since the downturn?
Busch: Absolutely, (we’ve hired). We have roughly 1,400 employees.
Between the two corporate offices (on South Main Street in Ann Arbor and East Michigan Avenue in Saline), there are probably about 75 employees.
AnnArbor.com: How important is renovating and remodeling stores; and how often do you try to do this?
Busch: It’s a perpetual process, and one that we’re very heavily engaged in this year. We just did a project up in Pinckney that changed that location quite a bit. We started a huge project in South Lyon, which is going to dramatically change that store. Our Saline store is also going to undergo a major renovation this year.
In addition to that, we are starting the construction process for our newest location down in Canton. We have our hands busy with construction and remodeling.
It’s about keeping up with all the changes in the industry. There is more and more focus on fresh food, and sometimes you have to reconfigure the store to accommodate those needs.
U.S. grocery industry statistics
The grocery industry remained resilient during the recession, as consumers tightened budgets and slashed restaurant spending
- Number of supermarket employees: 3.4 million
- Total annual supermarket sales: $550-$600 billion
- Number of supermarkets (with $2 million or more in annual sales): 37,053
- Amount consumers spend on food per week (average): $151
- Number of trips per week consumers make to the supermarket (average): 2.2
Busch: Certainly buying local has become a really huge issue, particularly since the recession, which started it. There is a lot more interest in food and where it comes from and how it is made, particularly in Washtenaw County. People care about those things more.
Thirty, 40 years ago, there wasn’t that much concern about it. Every year, I think it’s getting stronger and stronger, and so we do a lot of work to make that shopping easier by labeling products that have been locally made, are organic, or are gluten-free.
AnnArbor.com: Do you change product lines based on customer requests?
Busch: All the time. It’s a perpetual process.
AnnArbor.com: How important are sales, daily deals and loyalty programs for Busch’s?
Busch: It’s certainly important, because it’s important to all of our customers. The industry as a whole is very promotional based. Loyalty cards are a way of life in our industry. We have (the MyWay program). …We try to make it one that brings advantages to our guests as well as provides information we can use. Ours is geared around how to make shopping easier. We’ll keep track of your purchases so you can go online and make lists. It’s a way to help create focus and ease for what (customers are) looking to accomplish.
AnnArbor.com: Does Busch’s prefer to build new stores, or renovating existing buildings?
Busch: We have done both. One of the advantages, I think, of being an independent retailer is that we’re more adaptable and have more capacity to reuse existing real estate. Some of the big national chains have a corporate footprint that they want to see, and therefore, if (a building) doesn’t fit the footprint, they won't deal with it.
AnnArbor.com: Busch’s participates in a number of community-related events; can you talk about why that fits the company’s vision?
Busch: Partly, it’s important because that’s how I was raised. Being a family business, we have more traditional values. …I grew up in a small town where everybody knew everybody, and that’s just how you lived. Those values that I was raised with are what drive the business today.
AnnArbor.com: What is the company’s expansion plan moving forward?
Busch: I’m expecting we’ll continue to grow. How fast and how quickly will all depend on what opportunities come before us. We don’t have to grow for growth’s sake; we grow selectively as it fits our market and the customers we want to serve.
AnnArbor.com: Would you expand outside of Michigan?
Busch: That’s not likely, just because of the fact that we’re a very family-focused and family-oriented business. I personally go to the stores on a regular basis, and I find that when you get too geographically spread out, it becomes impossible to do that. That’s not really what we’re about.
AnnArbor.com: Is there still expansion opportunity in southeast Michigan?
Busch: Oh, absolutely. There will always be opportunity here, you just have to find the right location and carve out your niche.
Lizzy Alfs is a business reporter for AnnArbor.com. Reach her at 734-623-2584 or email her at lizzyalfs@annarbor.com. Follow her on Twitter at http://twitter.com/lizzyalfs.
Comments
kathleen sachs
Sun, Jun 9, 2013 : 2:44 a.m.
John Busch did more than lay off people he closed the whole pharmacy department and gave everyone a mere two weeks notice. We did have CVS come in and give us an opportunity to listen to a pitch about joining their team that is true, but it is not as if "Buschs" got us any new jobs after we were let go. I think most of the pharmacy personnel felt expendable after they closed the departments., so not sure I agree with Andy Frazier on the statement that Busch's did not leave them high and dry.
Mom&3
Mon, Jun 10, 2013 : 11:44 a.m.
Busch's did not work hard to find pharmacists jobs at CVS, Andy. To my knowledge, out of the 8 pharmacies, only one pharmacist was employeed with CVS and that lasted for only 4 or 5 months. Making the statement that "We never had to lay anybody off" is not the truth. When all 8 of the pharmacies closed, more than 2 dozen people lost their jobs. Mr. Busch needs to realize that when all of the pharmacy staff was indeed laid off, that this not only affected his former employees, that the lay offs also had far reaching affects for all of the families involved. Please, let the record be set straight with the truth.
Slim Jim
Thu, Jun 6, 2013 : 1:20 a.m.
I love shopping at Busch's, and the fact that they are a locally owned business is a plus. The Saline store has a great meat and seafood department, and their produce is the best. If you want cheaper prices you can shop somewhere like Walmart or Meijer, but don't expect anyone to be able to help or answer our questions, don't look for anything other than the boring, routine staple items and then expect to wait in line so long that your frozen food will be defrosted. I'll pay a couple of bucks extra to shop at a great store like Busch's! I do miss the pharmacies, but I understand that you can't continue to run a department that isn't profitable.
Bill
Wed, Jun 5, 2013 : 8:56 p.m.
I was disappointed when they laid off a lady in her 60s on South Main a few years about the time they put in autoserve lanes. I went out of my way to get in her lane to say hi. With a few lanes converted like that, I think they really did lay some people off, conveniently forgotten by Mr. Busch for this article. Fewer lanes for clerks, fewer clerks needed.
Rod J
Wed, Jun 5, 2013 : 7:06 p.m.
We just did a project up in Pinckney that changed that location quite a bit. We started a huge project in South Lyon, which is going to dramatically change that store. Our Saline store is also going to undergo a major renovation this year. When are you going to update the first store you built?? I'm pretty sure that's been the same since '75.
Bubba43
Wed, Jun 5, 2013 : 6:36 p.m.
Nice, but too expensive for all of my shopping.
BhavanaJagat
Wed, Jun 5, 2013 : 6:27 p.m.
Whole Dude-Whole Retail: Having lived in Ann Arbor all these years, I have known Busch's as a friendly place to shop. I have also had an opportunity to visit or shop at several of their other locations. I would not call Plum Market as a new addition as its owners had operated The Merchant of Vino on Plymouth Road prior to selling their business to Whole Foods Market. Apart from these additions described in this story, grocery retail business has become very difficult because of the expansion of a variety of stores like Walgreens( pharmacy store) into the traditional grocery retail business. Many gas-stations have substantially expanded the grocery items they carry. It generally speaks of very poor standards of environmental sanitation and hygiene that is being expected of at retail establishments that sell groceries. I am surprised for the lack of rules and regulations and the lack of standards that is allowing the sale of food items at every kind of store. It is my impression that the problem of obesity and excessive consumption of snack foods is caused by this easy availability of food items. In my view, food items must not be retailed where a certain amount of healthy foods like fresh fruits and vegetables are not sold. I would be happy if Busch's takes a leadership role and demand high standards for retailing items that people consume as food or drink and establish a licensing process to sell food, as food poses more risks than alcohol, or tobacco if it sold without regulation.
BhavanaJagat
Wed, Jun 5, 2013 : 8:51 p.m.
Sir, I am not suggesting that humans have to be controlled. I am simply stating reasons for regulating retail establishments that sell food items. We do not really need such a huge surplus of retailers selling grocery items. Snack foods and beverages must be sold along with other regular food items which provide the nutritional punch. Otherwise, it has become too easy to buy junk food without ever getting a chance to look at colorful healthy choices. Food is getting sold in places where there is no basic cleanliness.
djacks24
Wed, Jun 5, 2013 : 8:27 p.m.
Oh nice. Another "humans are too stupid to control their urges much less themselves, therefor they must be controlled" statement.
djacks24
Wed, Jun 5, 2013 : 5:35 p.m.
It would be nice if they'd open a store in Ypsilanti township, south of I-94 to compete with Kroger. I think they would get plenty of business provided their prices weren't inflated like in the Saline location.
Tesla
Wed, Jun 5, 2013 : 5:04 p.m.
How about fixing up your Clinton store. You know....the original first store in the chain? It's an antique and is obviously not a big money maker but still. Comon Busch.
Jan
Wed, Jun 5, 2013 : 5:18 p.m.
So true! Lenawee county got this business going and now we're the forgotten customers. In recent years, half the inventory has been replaced with off-brand, cheap quality food. Do they think we don't know the difference out here in the boonies?
Ross
Wed, Jun 5, 2013 : 4:55 p.m.
Am I the only one who doesn't think their prices are all that high? I find their prices to be just fine, about what good food SHOULD cost. If you are comparing them to walmart and sams club, maybe. But those stores are disgusting, treat their employees like garbage, and shouldn't be given a dime.
Bandit733
Wed, Jun 5, 2013 : 4:28 p.m.
What a bunch of crap. Their prices are so out of line with the competition. As far as weathering the storm, it was touch and go. Let's tell it like it is....
mediaman1969
Wed, Jun 5, 2013 : 3:35 p.m.
I live in Pinckney and I feel Busch's prices are too high. I will drive the extra 8 miles to Kroger where I save on many items I use regularly. In the article the CEO says they were able to survive the economy downturn, well that's in part because they don't pay their employees a decent wage. I know someone who has worked for Busch's here for 10 years and isn't making more than 8.75 an hour.
Kyle Mattson
Wed, Jun 5, 2013 : 5:40 p.m.
Hi MM69, Here is a link to the BLS's employment and wage estimates for the grocery store industry: http://1.usa.gov/12sH7KB Obviously there is a wide-range of compensation numbers as you have everyone from butchers to pharmacists to stock staff working in the same building. Also, for general reference the median pay breakdown for cashiers, in all industries, not limited to grocery is as following: Percentile-Median Pay 10%-$7.89 25%-$8.41 50%-$9.12 75%-$10.61 90%-$13.20
Andy Frazier
Wed, Jun 5, 2013 : 4:41 p.m.
I know several people who work at Busch's and they make quite a decent wage - and they've each worked for Busch's for several years. I suspect either you or your friend isn't being honest.
Barb
Wed, Jun 5, 2013 : 3:16 p.m.
I am loyal Busch's customer and will continue to do based all these reasons: Great selection Able to do all my shopping in one stop Able to find things I need (Hello, Kroger? Do you hear me?) Great employees with low-turnover (must be a good employer for people to stay) Convenience. That said, they should expand into Ypsi.
mady
Wed, Jun 5, 2013 : 6:56 p.m.
Barb, as a *former* Kroger drone, er, employee, I can sum it up this way: 1) run you ragged 2) don't respect your availability 3)don't appreciate your efforts 'nuff said.
leezee
Wed, Jun 5, 2013 : 3:28 p.m.
There used to be a Busch's on Ellsworth in Ypsilanti and I shopped there often when I lived in that area. It just didn't attract shoppers who could afford the higher prices. They might be successful if they opened one near the Eagle Crest.
Barb
Wed, Jun 5, 2013 : 3:28 p.m.
Also, I notice Kroger has high-turnover in employees... I wonder why?
Elijah Shalis
Wed, Jun 5, 2013 : 3:15 p.m.
They are expensive as others have said but their quality is very high. I go there for quick trips or for when I NEED one of their colossal cupcakes.
treetowncartel
Wed, Jun 5, 2013 : 2:57 p.m.
Part of that cost so many people complain about is because they treat their employees well and have very clean stores. Also, I've noticed in their West Bloomfield store that they employee people through Michigan Rehabilitation Services, very noble effort on their part.
vintagetimes4me
Wed, Jun 5, 2013 : 2:18 p.m.
They closed the Bushes store in Pittsfield Twp., just after we moved into this area. I was so sad over it. One of the reasons I liked the location was the Bushes market on Ellsworth. Now the store sits EMPTY --- With the new housing going on right down the street I would hope that Bushes would re-consider and come back to this side of town, along with a few new stores in that area. A Hallmark store would do GREAT in that location, along with say a Nice sit down restaurant, like Red Robbin! The people will come if YOU JUST BUILD it, or in your case, just COME BACK Bushes --- please?
vintagetimes4me
Wed, Jun 5, 2013 : 6:32 p.m.
I was thinking with the new homes being built not a mile from where the old one was that it might serve more family's like my own. Its really not a bad area if some name brand stores would just move in. I will hold out hope for that area, something needs to happen to that area, or the entire space is just waisted.
Andy Frazier
Wed, Jun 5, 2013 : 4:38 p.m.
That Busch's store closed because of too much theft, which was leaving them with very little profit. I believe Sheena's, who was there before, had the same problem. It's unfortunate because it would be great to have a Busch's store there. We don't mind driving to the Saline Busch's. It's a great store!
treetowncartel
Wed, Jun 5, 2013 : 2:53 p.m.
You should try Roy's Squeeze inn, their burgers are better than Red Robin. Also, I doubt Red Robin would open a store within a mile and a half of the store on Carpenter
CLX
Wed, Jun 5, 2013 : 1:54 p.m.
When Busch's got rid of all of the carts that had baby seats, I asked in the suggestion box whether they would replace them or keep just a couple. We used the carts, we explained, because we did not have the type of car seat where the baby carrier could be detached. The letter we got back stated that since everyone else did use such baby carriers, we could "come back when your baby is big enough to sit in the basket on her own." It was signed by the manager. Needless to say, we never returned. I'm still pretty shocked by that today and that's really all I can think of when I think of Busch's.
mady
Wed, Jun 5, 2013 : 6:51 p.m.
wow. just wow. I have to wonder how many parents with small children will adopt the same mindset?
Andy Frazier
Wed, Jun 5, 2013 : 4:42 p.m.
If you have problems or concerns, you should contact Busch's customer service. They send a reply within a day's time and they've always been there for us. It's on their website under "About Busch's" and then "Contact Us". I promise you'll get a speedy reply.
vintagetimes4me
Wed, Jun 5, 2013 : 2:20 p.m.
That was very rude of the manager to do that. I too would of not liked that. Is that manager still at that store? Which location was it, you might want to contact the managers boss to let them know what she/he is doing. That's terrible.
KIKIPIE
Wed, Jun 5, 2013 : 1:26 p.m.
I didn't know Busch's was a family owned company. Love the store..........now I love it even more!
HeimerBoodle
Wed, Jun 5, 2013 : 12:57 p.m.
Very nice write up. Many thanks to the Busch family for continuing to provide an inviting, friendly, high quality, locally owned store that fills the gap between "utility" retailers like Meijer and Kroger (paper towels, cheap cheese) and more specialty markets like Plum and Whole Foods (bison, premium fish). I shop at different stores around town depending on need, but find I can generally complete most of my shopping at Busch's. They've been my go-to store for almost 20 years.
leezee
Wed, Jun 5, 2013 : 12:54 p.m.
I was a Kroger shopper until I moved to the North side of town. The Kroger on Plymouth is just too big and the parking is a nightmare, so I switched to the Busch's on Green Road. I like the size and selection and I really like the staff there. It has more of a small town feel. The staff remember us and chat with us. I'd rather pay a bit more for a good experience. I have only had one bad experience there and it was with a woman I believe is a manager or supervisor there. She became practically homicidal over a bottle return misunderstanding. Honestly, it was frightening. I've never had another human being treat me like that. Ever. Even after I apologized several times, she would not calm down. She's still there, so I just steer clear of her. If she's on a register and she's the only one open, I'll wait in another line.
bluetonguedlizard
Wed, Jun 5, 2013 : 1:16 p.m.
I hear ya on the Kroger on Plymouth, since their remodel it seems like they are actually carrying less selection but you have to walk further to get around the store. I don't mind walking, infact I love it but the noise level now in there is obnoxious.
a2roots
Wed, Jun 5, 2013 : 12:52 p.m.
@music...great thing about this country is you can choose where you shop. The grocery business is very competitive and the Busch's have done a fantastic job with their stores and in supporting the communities they are in. So, if their prices are to high I would guess Hiller's, Whole Foods, Trader Joe's and Plum are all stores you avoid. Outside of maybe Hiller's none of these other stores do much, at least that is visible, in the way of supporting the community.
mermaid72
Wed, Jun 5, 2013 : 12:11 p.m.
Wish Chelsea could have a small Busch's, we just have Polly's Country Market & they are rather ho-hum....... same old-same old. Busch's has a very nice selection of food, a delicious & fresh salad bar & bakery, their produce is pretty good and the deli can't be beat. But...... those prices!!!!!
music to my ear
Wed, Jun 5, 2013 : 12:32 p.m.
little miss mermaid pollys are rather "hohum" I wish we had a pollys, we have to go all the way to Chelsea to get those great prices dexter is not far they have a buschs. yes buschs has a great selection but it cost you.
music to my ear
Wed, Jun 5, 2013 : 11:53 a.m.
it is a nice store, but the rich get richer, just how much more money do the Busch family need. lower the prices,A lot of people cannot afford this store. but obvious they are still turning a profit.I feel sorry for the people who live in Tecumseh ,where all they have is a Buschs grocery store ,they bought a building that used to house a competitor grocery store , so as another store cannot dip into their profits leaving the people to shop outside their community, as far as I know the building sets empty. and I am acknowledging they do provide jobs and are very generous in donations and yes I shop their sales only after all lol
TB
Wed, Jun 5, 2013 : 3:33 p.m.
If their prices are too high, a competitor can offer a lower price solution. A town with only one grocery store in it will likely have higher prices than others regardless of which company it is, and their costs are likely higher due to it being inconvenient for suppliers to travel to Tecumseh for only one store. What do you want them to do, run an unprofitable store just so you can have cheaper groceries since they're soooo rich? Why would they waste their time rather than just sell the store and let someone else sell groceries in Tecumseh at market prices? If the competitor grocery store that left failed, I'd assume it was because Busch's was better and not due to any sort of predatory pricing (since Busch's prices are so high! Amirite?)
Watcher
Wed, Jun 5, 2013 : 11:32 a.m.
How about a grocery store downtown on the library lot? We once had two A&Ps and the Broadway Market downtown. You didn't have to get into a car to get your groceries. Now we will have people in all the high rises who will need groceries.
Kyle Mattson
Wed, Jun 5, 2013 : 5:51 p.m.
A little more background on Watcher's comment. One of the A&P locations was at the 413 Huron site where demolition started yesterday to clear way for a new apartment tower: http://bit.ly/aadc-413deh the other was on State Street at Liberty here's an old Ann Arbor News clipping announcing its closure in 1968: http://bit.ly/19J3GLx
a2roots
Wed, Jun 5, 2013 : 1:30 p.m.
@watcher...I am not sure of the numbers needed to support a full line grocery store or even a downsized version. But, even with downtown density increasing in the future it would take some serious number crunching to make a grocery store a viable investment in downtown.
Meggie53
Wed, Jun 5, 2013 : 12:24 p.m.
I agree totally. We live downtown. I would love to take my cart and get all my grocerys at a walkable distance. Someone is really missing the boat because the audiance is captive and waiting for grocerys downtown!!!!!
Michelle
Wed, Jun 5, 2013 : 11:06 a.m.
They laid off all their pharmacists with weeks notice... Not sure why he indicates there were no lay offs.
Andy Frazier
Wed, Jun 5, 2013 : 4:44 p.m.
Michelle - Busch's worked hard to find placement for those pharmacists when they closed several pharmacies. Several of them found jobs at CVS locations. Busch's did not leave them high and dry.
Kyle Mattson
Wed, Jun 5, 2013 : 2:11 p.m.
For reader reference, Busch's closed the pharmacies in all of their locations in the fall of 2012. More info: http://bit.ly/aadc-bcpclose
A2comments
Wed, Jun 5, 2013 : 10:36 a.m.
Nice stores, but their prices are too high for us to go there except for meat on sale.
mibadger
Sat, Jun 8, 2013 : 9:27 p.m.
I agree. I only buy sale items at Busch's because they are more expensive than Kroger or Target.
Lizzy Alfs
Wed, Jun 5, 2013 : 6:24 p.m.
@Kyle Mattson: Interesting point because I think a lot of consumers have become "multi-store" shoppers. Going to many places for different things. I wonder if that trend increased during the recession as people were looking for deals.
Kyle Mattson
Wed, Jun 5, 2013 : 3:04 p.m.
Hi A2c- I think that is one of those odd things about the grocery industry, I have no direct experience in it but have some family friends that own a few stores out of state and one of the things I recall discussing with them is that they can't 'win' in every area vs their competitors. With so many variables (eg price, quality, convenience, selection, etc.) and just a large number of products there is no way for a grocer to meet the needs/expectations of every shopper. That is probably why things like rewards programs like the ones Lizzy questions John about are an valuable tool for grocers. As he put it: "It's a way to help create focus and ease for what (customers are) looking to accomplish."In short, it enables them to see what their regular shoppers want the most. As a shopper I have my routine of stores that I visit for 'groups' of items as needed (meat, dairy, produce) and then use the store that is walking distance from my apartment to fill in the gaps. One of these is Busch's, which I've found to have a good selection of Michigan Beers and as you mentioned meats and seafood.