How HarvesTime succeeds where Dominick’s failed

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By KEITH GRIFFITH

For Sun-Times Media

Chris Dallas was skeptical about the chestnuts.

“I’d never heard of anyone growing chestnuts in Illinois,” recalls the president of HarvesTime Foods, the Lincoln Square grocery store he co-owns with his three brothers.

But when a pair of downstate chestnut growers walked into Dallas’ store in the run-up to the holidays, he heard them out, inspected a sample and struck a deal on the spot.

Spur-of-the-moment decisions like that one may turn out to be HarvesTime’s best defense in an industry notorious for stiff competition and tight margins.

Since 2011, the space occupied by independent grocers like HarvesTime has dropped 27 percent citywide, according to a recent study by Mid-America Real Estate. In the same period, gourmet grocery stores — a category that includes Whole Foods and Mariano’s Fresh Market — increased their floor space by 60 percent, the study found.

Mariano’s is leading the charge, with 16 new or acquired locations slated to open by the end of this year.

In a few months, one of them will open just a mile away from HarvesTime. And after the Safeway-owned Dominick’s chain shut down all of its stores last month, Tony’s Finer Foods is rumored to be eying the vacated location just a few blocks north.

Chris Dallas doesn’t seem worried. After a 2005 expansion that doubled HarvesTime’s space to 20,000 square feet, revenue jumped 30 percent the first year, Dallas says. He declined to provide specific figures but says growth has since averaged 5 percent a year.

Increasingly, the product mix is a significant factor in that growth.

And the assortment at HarvesTime is hard to miss. The Coke products that once dominated an entire aisle in the store now take up a few feet of shelf space, replaced by a diverse array of local and niche products.

There’s the gourmet ice cream made just a few blocks away. Searing-hot scorpion pepper sauce. (“This should be illegal,” Dallas says.) Sweets from Greece, Turkey, and Bulgaria.

“We can only be successful selling what the customer wants,” Dallas says. “But it’s like driving a big boat — we don’t change things overnight.”

The biggest trend Dallas sees is a shift toward local products. “Twenty-six years ago, everyone wanted imported. Now if it’s made next door, that’s what everyone wants.”

When a local producer approaches him in the store — a scenario that’s hard to imagine at bigger chains — Dallas is often amenable to making a deal there and then.

Jim Dallmeyer, the downstate chestnut grower, found that a breath of fresh air after getting brushed off or bullied on other sales calls.

“The grocery business is a tough business,” Dallmeyer says. “It was clear that the folks at HarvesTime were focused on long-term relationships, and as newbies we appreciated that.”

Dallmeyer’s chestnuts, which he and his wife Marti grow as part of a co-op outside of Peoria, quickly outsold the other option at HarvesTime: imported Italian chestnuts.

As deep-pocketed competitors close in, Dallas is hoping his relationships with the small-scale suppliers offer something of a moat.

“There isn’t a lot we can do to compete with a new store,” Dallas says. “Hopefully, after 19 years, we have built up some customer loyalty.”

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