Mount Royal shoppers enjoy upscale services

Scott Driskill risked more than $5 million and the loss of his customer base with his gamble that the upscale renovation of his Mount Royal Fine Foods will be so different from the competition that shoppers will seek it out.

The project, which is complete except for some finishing touches, has created a supermarket like no other in the city. The building expanded by about 65 percent, heavily borrowing ideas from Twin Cities upscale grocers such as Lund's and Byerly's.

The idea is to differentiate Mount Royal, at 1600 Woodland Ave., in a community that is dominated by discount food stores such as Supervalu's Cub Foods and locally owned Super One Foods.

Mount Royal strives for an "intimate connection with our customers," manager Steve Schadewald said. The store strives to make sure service as well as expanded choices are part of the shopping experience, he said.

In the overhaul, "we tried to give them every amenity we could think of," Driskill said.

Repeated delays

When Driskill bought the store from Sherm Quisberg, a Minneapolis businessman, in 1998, Driskill lived in the Twin Cities and owned several grocery stores in the Minneapolis area. He has since sold all except one, and he owns part interest in another that was converted to a Cub Foods store.

In 2001 the Supervalu moniker was dropped, although the grocery giant continues to supply the store. It was renamed Mount Royal Fine Foods.

The renovation got off the ground in July 2006 after repeated delays. The finishing touches are almost complete. The decor includes stone floor tiles, brown and gold colors, shadow box lighting and wide aisles.

The construction period was difficult for shoppers, Schadewald said, as shelves and construction equipment moved constantly and standard items sometimes were unavailable. Schadewald and Driskill maintain that they lost few customers during that time.

Jenni Carlson, a young mother who has been going to the store since she was an infant accompanying her own mother, said she shopped there less during the renovation but now that it's virtually complete, picks up items as often as five times a week.

Moved to Duluth

The 46,000-square-foot store's crown jewel is the deli section, which takes up a major portion of the addition.

Driskill moved to Duluth with his wife, Lisa, and family to oversee the renovation and store operations. He hired Mary Lou Long, former director of deli operations for Lund's and Byerly's in the Twin Cities, to design the deli and lead its operations.

She, in turn, tripled the size of the deli staff. Among those hired was Dale Bishop, a former executive chef in Lutsen who owned a fine dining catering business in Minneapolis called Simply Elegant. He now creates Mount Royal's deli menus.

The hot food case contains his dishes, cooked daily from scratch. They can be eaten in the nearby seating area that can accommodate about 50 people with booths, tables and leather couches. It also has a fireplace. Customers can bring their computers to use the wi-fi there or listen to the music piped to the outdoor patio area.

The deli offers an olive bar, a sushi bar, cases of cheeses, meats, salads, sandwiches and flatbread pizzas that are baked in a brick oven as customers watch.

Throughout the store, large numbers of organic and natural foods have been added. "We've made a huge commitment to organic," Schadewald said.

The bakery was retooled and a pastry shop added. The floral and gift department has been greatly expanded.

Every department has seen increases since the renovation and customers are coming from a wider area, including the North Shore and West Duluth, according to Driskill.

The payroll has grown to about 120 full- and part-time employees from about 90.

Coffee and prescriptions

Perhaps the most anticipated addition to the store, Schadewald said, was the Caribou Coffee kiosk.

The kiosk is a first-of-its-kind concept, said Patrick Campion, Caribou's marketing director. Caribou also has a presence in many Byerly's and Lund's stores with coffee shop settings or in parking lots.

Falk's Pharmacy has a store inside the grocery store where customers can drop off prescriptions before they shop and pick them up when they're finished. The immediate neighborhood has lacked a pharmacy for a long time, said Jolene Shult, retail operations director for Falk's, which has eight pharmacies throughout the city.

Being close to a community of seniors at Mount Royal Pines apartments made the location an attractive one for Falk's, she said. "It was customers that drove us to that location," she said.

Anita Pollock, who has shopped at Mount Royal since 1981 when she moved to the neighborhood, said she's pleased with the renovation and likes the expanded produce section best. "We're lucky to have all this here in our neighborhood," she said.

Some shoppers worry that the renovation will cause prices to rise, but Schadewald said that's not necessarily so. Items that the store has always carried "we haven't touched, pricewise," he said. New items, such as organic food, are costlier. "If you fill your cart with a lot of organics, you're going to see your bill is a little higher," Schadewald said.

Show they're unique

Driskill is doing what smart operators do in the grocery industry, said Jamie Pfuhl, executive director of the Minnesota Grocers Association. "I think grocers are looking for ways to differentiate themselves," she said. Shoppers' needs are changing as households become busier and consumers seek healthful food as well as convenience, she added.

Minnesota, long a stronghold for locally owned grocers, is seeing heightened competition from chains such as Wal-Mart, which have entered the grocery business in a big way, Pfuhl said. Independents have to show that they're unique and offer what consumers want, she said.

Driskill's goal is to cater to people who want the kind of store Jenni Carlson described Mount Royal to be. "It's really classy," she said.