An Independent Spirit
Chuck & Don's Pet Food Outlet is a prime example of how a regional chain can stand up to big-box competitors by delivering high-quality products and customer service in a neighborhood pet shop atmosphere. That is why it has been named Pet Business' 2013 Retailer of the Year.
Chuck Anderson Bob Hartzell
Fearing the major pet retailers—or any merchant—is simply not part of the agenda at Chuck & Don’s.
In fact, the company’s top executives are so certain that their merchandising and marketing strategy works they welcome competition from any and all other retailers.
“We learned how to compete with Petco and PetSmart and any other major chain,” says Chuck Anderson, the company’s chief financial officer and one of its founders. “Actually, today we love locating one of our stores right next to one of their stores. It shows the difference between our operations, and it clearly shows the consumer the element of service and family that we offer that they just can’t get [at a big-box store].”
Chuck & Don’s employees are the key to a good partnership. They are educated and eager to help consumers and to learn about programs being offered by manufacturers. They are interested in developing programs that benefit both interests involved. Their longevity with Chuck & Don’s is a testament to their dedication and loyalty, and that is what makes a great partnership.
—Rob Wesolich, regional sales manager (Midwest), Kent Nutrition Group
That confidence may be the chief reason for the success of the 24-store pet retail chain over the past two decades. What started with just $125 in the cash register and a dream of getting a small business off and running in the early 1990s has become a robust pet operation with sales in excess of $40 million annually and a sales growth rate that hovers between 14 and 17 percent yearly. Chuck & Don’s has caught the attention of consumers and competitors in two key metropolitan areas: the Twin Cities of Minneapolis and St. Paul in Minnesota and the Denver metropolitan area.
Now, Anderson and Bob Hartzell, the CEO and president, are thinking even bigger. They hope to double the size of the chain within five years and perhaps take it to as many as 100 stores within a decade, scattering units throughout the upper Midwest from Wisconsin to Colorado. But, they will only do so, they say, if they can maintain the service and comfort that they feel separates them from the competition in the heated pet retail segment.
Chuck & Don’s made a name for itself—first in Minneapolis/St. Paul and more recently, in the Denver metropolitan area—by stressing a healthy selection of pet food and supplies and backing that up with customer service that is designed to simply knock the socks off any consumer looking for help while purchasing pet products.
The result, of course, is a winning retail pet business and a model for any regional pet retailer on how to handle a market surrounded by the major big box pet retailers, not to mention the home base of Target, one of the largest mass merchandisers in the country.
For these reasons, Pet Business has selected Chuck & Don’s as the 2013 Pet Retailer of the Year. The chain will be honored at a dinner in Las Vegas right before the start of the annual SuperZoo Expo this month.
Chuck & Don’s is a history of partnerships. The first, between Anderson and Don Tauer, got the company off and running more than two decades ago. The two men, who knew each other through their involvement in owning, training and showing dogs, started selling truckloads of pet food from a jointly owned boarding kennel. In May 1990, they decided to give retail a shot, opening their first store in Eagan, Minn.
Chuck & Don’s has been successful because they have always placed a strong emphasis on customer service, so their customers are incredibly loyal. In addition, their retail staff has extensive knowledge of all the products they sell.
— Frank Hon, vice president, global sales, CANIDAE Natural Pet Food Company
“We saw other people doing well, and Don said to me that we should open a store for some walking around money,” says Anderson. “We found a newly-built strip mall in Eagan that required no security deposit and three months of free rent for the space. We then asked American Agco [now called American Distribution], a distributor, if they could supply us and give us 90-day dating on the invoicing. Three hours later, they said yes and we were ready to go.”
Of course, it was not that easy. Store fixtures were also a concern, and Anderson said it took the help of a manufacturer’s rep to get shelving delivered within a couple of days. Three days later, the store opened for business. “We did $136 the first day. We would each work half days and split weekends. We sort of found our way through in those early days,” he adds.
Knowing that the staff is the face of their company, Chuck & Don’s continues to impress me with the quality of people they hire to carry out their mission and run their business like a well-oiled machine. The employees pride themselves in solving problems and making their customers happy; knowing that a happy customer is a returning customer.
—David Levy, president/CEO, Zeus & Co.
A second store opened in Eden Prairie, Minn., a year later, followed by a third store in Cottage Grove, Minn. By 2000, Chuck & Don’s operated 10 stores in the Twin Cities metropolitan area. At about the same time, Tauer decided to retire from the operation to devote more time to his Animal Inn Boarding Kennel.
In his place stepped Hartzell, who had joined on as a partner in 1996 after selling a family business. Hartzell brought with him some much-needed capital for growth and, perhaps more importantly, the ability to raise more capital for future expansion.
“We tried to figure out where we go from there,” says Hartzell. “Everything was changing in the pet industry. PetSmart was opening up stores all over our area and Petco purchased Petfood Warehouse. Even Iams was purchased by Procter & Gamble, and they made the decision to take the brand into every mass retailer you can imagine.”
The new strategy was to “make Chuck & Don’s to dog food what Starbucks is to coffee,” Hartzell says. That means selection and quality. Today, the chain carries more than 30 different brands of dog food at each store and is always on the lookout for new products to incorporate into the mix. “We also zeroed in on a 3,000-square-foot store format that allowed us to become a neighborhood store with a real local flavor,” he adds.
At the same time, a tech-savvy employee helped them update their POS system. “The combination of the new store formats and the updated systems really helped us gel,” Hartzell says. “The employee helped us implement a new technology strategy that allowed us to get various systems and customer services organized. It made a huge difference for us.”
Reaching consumers, of course, is a big part of the chain’s success. Keeping them as loyal customers is another very important aspect of the chain’s overall merchandising and marketing strategy. Assortment and customer service are the two variables that company management uses to differentiate the chain from the competition.
“We want customers to see right away that we have a friendly atmosphere and they can enjoy shopping our stores,” says Anderson. “With the assortment of products we carry, it is extremely important that our store personnel are trained to listen to the customer, determine their needs and make recommendations based on what they want and need. It is also important that they have a passion for animals. I think about 97 percent of our employees own an animal.”
Store managers play a big role in all of this. “They are our partners too,” says Anderson. “We empower them to work with their staffs and with consumers so that everyone is happy. We give them a lot of responsibility to set goals and objectives for their teams and realize how important they are to our team. We simply tell them to do the right thing.
“Our staff is so important to us because we know that we can’t match other [larger] retailers dollar for dollar. What we can do is win consumers over with great service and build more loyalty.”
Looking to the Future
Growth is also part of the chain’s plans, but Anderson and Hartzell says any expansion plans must be well developed. “We definitely do our homework,” Anderson notes. “We have to see what the area is like, how developed it is and how affluent it is. Then we have to look at the competition and make sure that it is not [oversaturated]. Is there room for us?”
Our industry is built on relationships and working with the Chuck & Don’s staff is like working with family. Chuck & Don’s also has an unwavering focus on running and improving their stores. They truly partner with RFG Distributing Inc., and allow us to handle distribution and logistics, giving them more time to focus on what’s important—customers and customer service.
—Steve Thoeny, president, RFG Distributing Inc.
Most of that growth will come in the current marketing territories of Minnesota and around the Denver area, where the chain entered in 2011 and now has five units. “We are looking to fill in within the areas we are already in, plus maybe expand a bit into Wisconsin,” says Hartzell. “We see lots of room for growth in these regions.
Adds Anderson: “We are very optimistic about this industry and our company. We have a lot of passion for pets, and we demonstrate that every day in every single store. I think consumers see that in our attitude. They know what to expect from a visit to our stores.”