New Iowa Store, New Destination

When Doug Christner first laid eyes on the Destination True Value format, he knew he had to have it. The Cedar Rapids, Iowa, dealer was attending a training session at the co-op’s facility in Cary, Ill., but he snuck off to spend some time in the prototype store, which was being tested in different regions of the country.

Christner liked the new color scheme, a muted combination of white and bronze. Special floor coverings set off certain departments nicely. Open sight lines would allow his customers to see clear across the store. Product placements made sense, in terms of adjacencies.

What didn’t make sense to Christner was going back to Cedar Rapids and remodeling his existing store, Vernon Village True Value, into a Destination True Value. He and his wife, Karen, had been toying with the idea of opening a second store for some time. Destination True Value came with a package of tempting financial incentives, and Christner had a good management staff in place in Cedar Rapids.

On Jan. 28, Christner opened a new hardware store in North Liberty, Iowa, based on the Destination True Value format. For the site, he chose a 13,000-square-foot former grocery store that had been slightly damaged in a fire. True Value helped Christner do demographic and feasibility studies for the location. “The numbers came in off the charts,” recalled Christner. The nearest big box, Lowe’s, is a 15 minute drive. An Ace Hardware is five miles away.

North Liberty, a bed room community between Cedar Rapids and Iowa City, is expected to see its population grow 25 percent to 30 percent in the next five years. Destination True Value was designed just for a “second city” market like this, where retail opportunities exist in many categories.

At North Liberty True Value, four of these categories are automotive, sporting goods, pet supplies and housewares. With Destination True Value, these are considered “plug and play” sections that can be swapped in to meet a particular store’s market. North Liberty is near a reservoir with recreational activities, so Christner carries camping and boating supplies. Small appliances are doing surprisingly well, he said, with Wal-Mart and Target a 15-minute drive away.

Christner did not make many adjustments to Destination True Value’s racetrack design or placement of various departments. A team from True Value helped with the merchandising, and when the former accountant ran into glitches with suppliers, his retail consultant smoothed things out.

But Christner was on his own with the gas pumps, which he inherited with the store. Since they were relatively new and represented an additional revenue stream, Christner decided to give petrol a try.

“We were a little paranoid, not knowing anything about the gasoline business,” he admitted. For example, the store ignited a local price war by selling their gas two cents cheaper than everyone else.

Overall, the experiment has worked out. Fuel sales are better than expected, and the resulting foot traffic has helped incremental sales at the hardware store. Christner has brought in snack food and beverages; bread and milk are next.

Vernon Village True Value has already moved once, from one side of a mini-mall to the other, and expanded from 9,000 square feet to 16,000 square feet. Although Christner once counted out a remodel, now he looks at the 15-year-old store with a jaundiced eye. “I’d like to redo the entire store in the new format,” he said.