Fashion-forward Southwestern specialty retailer embraces upscale chocolate.

Call it the three Fs of merchandising: Freshness. Flexibility. Fashion. Phoenix-based AJ’s Fine Foods gets an A+ in all three categories.

Each of the 11 gourmet/specialty stores in the chain, a division of Bashas’ Supermarkets, has its own brand of retailing panache thanks to management’s flexible approach. None of the AJ’s stores are planogrammed; purchasing and merchandising decisions are made at the store level from an assortment of products and vendors approved at headquarters. And the result is a retailing environment characterized by fashion and flair.

As gourmet buyer Steve LeFevre puts it: “I approve the colors, but they go make the painting. … We try to let the stores sell the most appropriate products for their specific clients. We like to change it up so the customer gets a fresh look every couple of visits or so,” he continues. “We try to keep it dynamic.”

Dramatic, too, if a vibrantly colorful array of Joseph Schmidt confections on display in AJ’s Camelback store this spring is any indication. Hues of orange, yellow, purple and teal dominated the impossible-to-miss display of gourmet boxed confections.

“The bakery department has custody of Joseph Schmidt,” says LeFevre, “and they work a lot with that.” Table displays of upscale confectionery treats are a frequent fixture in AJ’s bakery — or make that “boulangerie” — departments.  

The AJ’s stores also tempt shoppers with expansive refrigerated case displays of upscale confections near the deli — a.k.a. “bistro” departments. To help keep chocolate top of mind among store patrons, bistro sandwich purchasers routinely reap the benefit of an upscale chocolate treat with their order.

“They put a little piece of chocolate in with every sandwich we sell,” says LeFevre. “Some might do Lindt for a few weeks and then change to Valrhona or Scharffen Berger. It’s a freebie.

“We always love sampling when we get the opportunity,” LeFevre adds.

Gourmet chocolates are a perfect fit for the specialty food lovers who populate the aisles of the boutique-like AJ’s stores. “A lot of the people who appreciate the finer food categories we sell also appreciate the fine chocolate,” says LeFevre. AJ’s shoppers tend to be ahead of the curve in their food preferences, he notes.

For example, “We’ve been doing dark chocolate all along, before everybody else caught up with it,” he says. … Our clientele likes dark chocolate more than milk chocolate.” Single-origin chocolates definitely have a following among AJ’s patrons as do higher-cacao-content products. “It’s almost like one upsmanship,” LeFevre observes. “We’ve got some 72 percent and some 99 percent.”

While LeFevre experiments with all kinds of products, including organic and fair-trade, he emphasizes that at AJ’s, nothing is more of a priority than product quality.

“Our first responsibility is to bring our consumer what is superior,” he says. “After that, if it’s natural or organic or fair trade, that’s a bonus.”

AJ’s patrons tend to be adventurous consumers, eager to try what’s new, and that allows for considerable pricing elasticity within the stores. The average price for a premium chocolate bar at AJ’s, for example, is in the vicinity of $3.99, but there are a number of brands that go beyond that, LeFevre reports.

One of the AJ’s stores just revamped its approach to chocolate bar merchandising, and LeFevre is impressed with the results. The bars are displayed vertically. A system of spring-loaded dividers means that it’s no longer necessary to use the sleeves in which the chocolate is shipped. That’s a good thing, LeFevre reflects, because, “you were starting to see more cardboard on the shelves than chocolate.

“It makes the section look faced up and presented well,” he continues, noting that he expects the new fixture approach to be implemented in additional stores very soon.

As might be expected, chocolate gift items are well represented at the stores in the chain.

“We sell Godiva and Ethel M and Bissinger’s, and they have gift items,” says LeFevre. “Some we carry all year long. You can always come in and find a box of chocolates.” He hastens to add, of course, that the boxed chocolate mix is expanded for seasonal occasions.

The boxed chocolates AJ’s sells tend to be in the $25 - $35 price range. “On occasion, someone will sell a box of Godiva for $100,” LeFevre adds. “We try to have them [very upscale gift SKUs] there, so if somebody wants that, we have it, and they need look no further.”

In keeping with AJ’s experiential approach to retailing, there are frequent sampling and other special events at the stores, including visits from local chocolatiers. “A lot of times we like to tie chocolate in with the wine department,” LeFevre says.

There’s also the occasional price promotion. For a “Springtime in Paris” promotion this past April, AJ’s offered Valrhona chocolate at a special price. “We don’t typically do that,” he says. In this case, however, “our goal was to bring more people in.”

Making new product decisions involves less quantitative analysis than with more mainstream products. “For specialty foods, there’s not great data, so we have to rely on word of mouth and buzz,” says LeFevre. “We have to stay in touch with the market more than just [reviewing] numbers on a piece of paper.”  To keep abreast, LeFevre relies on gourmet food publications and specialty food shows, among other resources.  

The chain’s approach to confectionery retailing is working well: Chocolate sales are up. LeFevre also credits the category growth to the prevailing positive mindset about chocolate.

“I think people are seeing more of the positive aspects of chocolate,” he says. “It’s fashionable once again to eat chocolate.” And what better place to give fine chocolate the fashion treatment than AJ’s?

Chocolate molten center cupcakes, dark milk chocolate pear cake and chocolate mousse were on the menu one evening this spring at a tasting event sponsored by Milwaukee-based Omanhene Cocoa Bean Company at the downtown Roundy’s Metro Market store.

Omanhene had previously sold its products primarily to specialty retailers, chefs and gift basket purveyors, so the decision by Roundy’s buyers to stock its distinctive made-in-Ghana chocolate bars, hot cocoa mix, and baking chocolate was cause for celebration for the small, but growing company. The festive sampling event drew raves from several hundred Metro Market customers who enjoyed the chocolate delicacies.  

The discriminating shoppers who patronize the Metro Market are a perfect audience for such an upscale offering, notes candy category manager Mike Overschmidt. And, he adds, he appreciates the awareness-building initiatives from the relatively small company.