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Show Page twelve The National Enterprise, April 6, 1977 Even by way the crow New flies, Farmington, Mexico is more than a hop, skip and a jump away from Salt Lake City. Hops, skips and jumps, for Grand Central Inc., incidentally, are a mere 750 miles. And so it is that the intermountain discount retailer is taking its first step outside its primary market area to establish a second nerve center in the southwestern United States. Construction is underway now on a single store in Farmington and two in Albuquerque. They will open next fall just in time and a for holiday shoppers fourth in Santa Fe is slated for grand opening shortly thereafter. The step outside Utah is not a new one for the old firm. With stores radiating from Salt Lake in Idaho, and Nevada, Wyoming they're already accustomed to interstate business. But this is, explains GC president and c.e.o. Don Mackey, their first venture outside the realm of the Salt Lake distribution center. Grand Central's $141 million business strategy is built around a central distribution center designed to supply its stores within a 700-75- 0 mile radius. Under the costs incurred in the way were doing business now, says Mackey, this formula of merchandise distribution allows us to maintain uniform price structures and still remain competitive. Mackey claims the system gives them almost foolproof control. Its good for line-ugood for advertising, and its our identity, the executive explained. But yearning to scratch the itch to grow and confined with its present market. Grand Central faced two Either look alternatives: outside the 750 mile radius, or come into a different sized store. We're first going after business that will 23-sto- satisfy the original prototype, Mackey emphasized. But increased operating costs due largely to skyrocketing fuel prices have given rise to an entirely new GC prototype. Replacing the 100.000 plus sq. ft. energy squandering model is a new 82,700 sq. ft. store with lower ceilings and insulation. This, the original protois planned for all type, future development. Mackey was looking for cities of 350.000 population or more. re settled finally on the southwest with Farmington, N.M. as the axis. Having decided this is the place was only the beginning. Construction was still a long way off. First comes that mysterious process of market research. Know Thy Competition foot, expansion, planned changes in road systems, etc. But besides keeping an the eye on the Gibson's, Furrs, and even K-Mar- t's, owned locally central non-foo- d t operations, Mackey has other competicheck-ou- tion to watch. The Safeways, etc. have added a new wrinkle to his d business: mainly items intended to boost profits from the traditional low margins endured by the retail industry grocery non-foo- Like any other retailer worth his salt, Mackey is obsessed with his competition. He knows who they Grand Centrals gone south for the winter byAleneE. Bentley 30-ye- ar Market hunting outside the limit, Grand Central looked north to Butte, Mont.; east of the Rockies to Denver and its bedroom communities; west, but hot beyond Las Vegas because the West Coast is a whole different ball south to Phoenix, game; Yuma and Tuscon; and self-impos- ed are, where they are, why they're there, and how they do business. He knows their line-utheir margins, and price structures nearly as well as they do. Potential markets he knows like the back of his hand: population, age, income, disposable income, traffic, volume of retail sales, sales per square p, and less). In analyses, we've had to look very carefully at the direction of Safeway and Albertsons. They could very well set the (usually our 1 out-of-to- d criteria of what the industry will be doing in the future. When we go out of town, we have to be very concerned with what food non-foo- stores are doing in their expansion. But satisfied with the southwests demographics and convinced he could capture a major part of that market, Mackey proceeded. Planning a distribution system that could return the same 27 percent gross margin as the Salt Lake center occupied Mackey next. Its no secret, he says, to equate cost savings with means of distribution. With the GC system, Mackey owns the merchandise at less cost, hands down. But to get it to stores requires additional costs of equipment, rentals, Conlabor, trucks, etc. trolling our lineup through distribution is where we have the advantage, he said with a grin. Grand Central will build another distribution center to service the new stores, though on a smaller scale than the 400,000 sq. ft. general receiving center and 122,000 sq. ft. apparel warehouse in Salt Lake. Well start out small with the ability to grow, he said. Advertising budgets concern the executive too. p, NEW OFFICE CE 12,000 S.F. of Individual Office Space Suites available from 150 to 8,000 S.F. 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